Exhibit 4.1
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VALEANT PHARMACEUTICALS INTERNATIONAL
AND
RIBAPHARM INC.
7.0% SENIOR NOTES DUE 2011
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INDENTURE
DATED AS OF DECEMBER 12, 2003
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THE BANK OF NEW YORK,
AS TRUSTEE
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CROSS-REFERENCE TABLE*
TIA INDENTURE
SECTION SECTION
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Section 310(a)(1)............................................ 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N.A.**
(a)(4)............................................... N.A.
(a)(5)............................................... 7.10
(b).................................................. 7.8; 7.10
(c).................................................. N.A.
Section 311(a).............................................. 7.11
(b).................................................. 7.11
(c).................................................. N.A.
Section 312(a)............................................... 2.5
(b).................................................. 11.3
(c).................................................. 11.3
Section 313(a)............................................... 7.6
(b)(1)............................................... N.A.
(b)(2)............................................... 7.6
(c).................................................. 7.6; 11.2
(d).................................................. 7.6
Section 314(a)............................................... 4.3; 4.5; 11.2
(b).................................................. N.A.
(c)(1)............................................... 11.4(a)
(c)(2)............................................... 11.4(a)
(c)(3)............................................... N.A.
(d).................................................. N.A.
(e).................................................. 11.4(b)
(f).................................................. N.A.
Section 315(a)............................................... 7.1(b)
(b).................................................. 7.5; 11.2
(c).................................................. 7.1(a)
(d).................................................. 7.1(c)
(e).................................................. 8.11
Section 316(a)(last sentence)................................ 2.9
(a)(1)(A)............................................ 8.5
(a)(1)(B)............................................ 8.4
(a)(2)............................................... N.A.
(b).................................................. 8.7
(c).................................................. 11.5
Section 317(a)(1)............................................ 8.8
(a)(2)............................................... 8.9
(b).................................................. 2.4
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* This Cross-Reference Table shall not, for any purpose, be deemed a part of
this Indenture.
** N.A. means Not Applicable.
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TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE..............................................1
Section 1.1 Definitions....................................................................1
Section 1.2 Other Definitions.............................................................22
Section 1.3 Trust Indenture Act Provisions................................................23
Section 1.4 Rules of Construction.........................................................23
ARTICLE 2 THE SECURITIES.........................................................................24
Section 2.1 Form and Dating...............................................................24
Section 2.2 Execution and Authentication..................................................26
Section 2.3 Registrar and Paying Agent....................................................26
Section 2.4 Paying Agent to Hold Money in Trust...........................................27
Section 2.5 Securityholder Lists..........................................................27
Section 2.6 Transfer and Exchange.........................................................28
Section 2.7 Replacement Securities........................................................28
Section 2.8 Outstanding Securities........................................................29
Section 2.9 Treasury Securities...........................................................29
Section 2.10 Temporary Securities..........................................................30
Section 2.11 Cancellation..................................................................30
Section 2.12 Legend; Additional Transfer and Exchange Requirements.........................30
Section 2.13 CUSIP and ISIN Numbers........................................................34
ARTICLE 3 REDEMPTION AND PURCHASES...............................................................34
Section 3.1 Right to Redeem...............................................................34
Section 3.2 Selection of Securities to be Redeemed........................................34
Section 3.3 Notice of Redemption..........................................................35
Section 3.4 Effect of Notice of Redemption................................................36
Section 3.5 Deposit of Redemption Price...................................................36
Section 3.6 Securities Redeemed in Part...................................................36
Section 3.7 Optional Redemption...........................................................36
Section 3.8 Purchase of Securities at Option of the Holder Upon Change of Control.........37
Section 3.9 Effect of Change of Control Purchase Notice...................................39
Section 3.10 Deposit of Change of Control Purchase Price...................................40
Section 3.11 Securities Purchased in Part..................................................40
Section 3.12 Compliance With Securities Laws Upon Purchase of Securities...................40
Section 3.13 Repayment to the Obligors.....................................................40
Section 3.14 Offer to Purchase by Application of Excess Proceeds...........................41
ARTICLE 4 COVENANTS..............................................................................43
Section 4.1 Payment of Securities.........................................................43
Section 4.2 Maintenance of Office or Agency...............................................43
Section 4.3 Reports.......................................................................44
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Section 4.4 Compliance Certificates.......................................................45
Section 4.5 Further Instruments and Acts..................................................45
Section 4.6 Maintenance of Corporate Existence............................................45
Section 4.7 Changes in Covenants when Securities Rated Investment Grade...................45
Section 4.8 Restricted Payments...........................................................46
Section 4.9 Incurrence of Indebtedness and Issuance of Preferred Stock....................48
Section 4.10 Sale and Leaseback Transactions...............................................51
Section 4.11 Liens.........................................................................52
Section 4.12 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.....52
Section 4.13 Transactions with Affiliates..................................................53
Section 4.14 Asset Sales...................................................................55
Section 4.15 Designation of Restricted and Unrestricted Subsidiaries.......................56
Section 4.16 Business Activities...........................................................56
Section 4.17 Payments for Consent..........................................................57
Section 4.18 Stay, Extension and Usury Laws................................................57
Section 4.19 Payment of Additional Interest................................................57
Section 4.20 Notice of Default.............................................................57
ARTICLE 5 MERGER, CONSOLIDATION OR SALE OF ASSETS................................................57
Section 5.1 Merger, Consolidation or Sale of Assets.......................................57
Section 5.2 Successor Substituted.........................................................58
ARTICLE 6 DEFAULT AND REMEDIES...................................................................59
Section 6.1 Events of Default.............................................................59
Section 6.2 Acceleration..................................................................61
Section 6.3 Other Remedies................................................................62
Section 6.4 Waiver of Defaults and Events of Default......................................62
Section 6.5 Control by Majority...........................................................62
Section 6.6 Limitations on Suits..........................................................62
Section 6.7 Rights of Holders to Receive Payment..........................................63
Section 6.8 Collection Suit by Trustee....................................................63
Section 6.9 Trustee May File Proofs of Claim..............................................63
Section 6.10 Priorities....................................................................64
Section 6.11 Undertaking for Costs.........................................................64
ARTICLE 7 TRUSTEE................................................................................64
Section 7.1 Duties of Trustee.............................................................64
Section 7.2 Rights of Trustee.............................................................65
Section 7.3 Individual Rights of Trustee..................................................66
Section 7.4 Trustee's Disclaimer..........................................................67
Section 7.5 Notice of Default or Events of Default........................................67
Section 7.6 Reports by Trustee to Holders.................................................67
Section 7.7 Compensation and Indemnity....................................................67
Section 7.8 Replacement of Trustee........................................................68
Section 7.9 Successor Trustee by Merger, Etc..............................................69
Section 7.10 Eligibility; Disqualification.................................................69
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Section 7.11 Preferential Collection of Claims Against Obligors............................69
ARTICLE 8 DEFEASANCE; SATISFACTION AND DISCHARGE OF INDENTURE; RELEASE OF RIBAPHARM..............70
Section 8.1 Satisfaction and Discharge of Indenture.......................................70
Section 8.2 Legal Defeasance..............................................................70
Section 8.3 Covenant Defeasance...........................................................72
Section 8.4 Application of Trust Money....................................................73
Section 8.5 Repayment to Obligors.........................................................74
Section 8.6 Reinstatement.................................................................74
Section 8.7 Release of Ribapharm as Obligor...............................................74
Section 8.8 Reinstatement of Ribapharm as Obligor.........................................74
ARTICLE 9 AMENDMENTS, SUPPLEMENTS AND WAIVERS....................................................75
Section 9.1 Without Consent of Holders....................................................75
Section 9.2 With Consent of Holders.......................................................75
Section 9.3 Compliance With Trust Indenture Act...........................................77
Section 9.4 Revocation and Effect of Consents.............................................77
Section 9.5 Notation On or Exchange of Securities.........................................77
Section 9.6 Trustee to Sign Amendments, Etc...............................................77
Section 9.7 Effect of Supplemental Indentures.............................................77
ARTICLE 10 SUBSIDIARY GUARANTEES.................................................................78
Section 10.1 Future Guarantees.............................................................78
Section 10.2 Terms of Guarantees...........................................................78
Section 10.3 Limitation on Guarantor Liability.............................................80
Section 10.4 Merger and Consolidation of Guarantors........................................80
Section 10.5 Release.......................................................................81
ARTICLE 11 MISCELLANEOUS.........................................................................81
Section 11.1 Trust Indenture Act Controls..................................................81
Section 11.2 Notices.......................................................................82
Section 11.3 Communications by Holders With Other Holders..................................83
Section 11.4 Certificate and Opinion of Counsel as to Conditions Precedent.................83
Section 11.5 Record Date for Vote or Consent of Holders....................................83
Section 11.6 Rules by Trustee, Paying Agent and Registrar..................................84
Section 11.7 Legal Holidays................................................................84
Section 11.8 Governing Law; Submission to Jurisdiction.....................................84
Section 11.9 No Adverse Interpretation of Other Agreements.................................84
Section 11.10 No Recourse Against Others....................................................84
Section 11.11 Successors....................................................................85
Section 11.12 Multiple Counterparts.........................................................85
Section 11.13 Separability..................................................................85
Section 11.14 Table of Contents, Headings, etc..............................................85
Section 11.15 Calculations in Respect of the Securities.....................................85
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EXECUTION COPY
THIS INDENTURE dated as of December 12, 2003 is among Valeant
Pharmaceuticals International, a corporation duly organized under the laws of
the State of Delaware (the "Company"), Ribapharm Inc., a corporation duly
organized under the laws of the State of Delaware ("Ribapharm"), and The Bank of
New York, a banking corporation duly organized under the laws of the State of
New York, as Trustee (the "Trustee").
In consideration of the premises and the purchase of the Securities by the
Holders thereof, all parties agree as follows for the benefit of the other and
for the equal and ratable benefit of the registered Holders of the Company's, as
issuer, and Ribapharm's, as co-obligor, 7.0% Senior Notes due 2011.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging
with or into, or becoming a Subsidiary of, such specified Person;
and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Additional Interest" means "liquidated damages" as defined in Section 5
of the Registration Rights Agreement. All references herein to interest accrued
or payable as of any date shall include any Additional Interest accrued or
payable as of such date as provided in the Registration Rights Agreement.
"Additional Securities" means any additional 7.0% Senior Notes due 2011
that the Obligors may issue from time to time under this Indenture in accordance
with Section 2.1(c) of this Indenture as part of the same series of Securities
issued on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided, that beneficial ownership of 10% or more of
the Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Agent" means any Registrar or Paying Agent.
"Applicable Procedures" means, with respect to any transfer or exchange of
beneficial ownership interests in the Global Securities, the rules and
procedures of the Depositary, to the extent applicable to such transfer or
exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights; provided, that the sale, conveyance or other disposition of
all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by Section
3.8 and/or Section 5.1 hereof and not by the provisions of Section
4.14; and
(2) the issuance of Equity Interests by any of the Company's Restricted
Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed
to be an Asset Sale:
(1) any single transaction or series of related transactions that
involves assets having a Fair Market Value of less than $2.5
million;
(2) a transfer of assets between or among the Company and its Restricted
Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary;
(4) the sale or lease of equipment, inventory or accounts receivable in
the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is permitted by
Section 4.8 hereof
(7) the license of intellectual property to third persons on customary
terms in the ordinary course of business as determined by the Board
of Directors of the Company in good faith;
(8) the sale, exchange or other disposition of obsolete assets not
integral to any Permitted Business;
(9) sales, transfers or other dispositions of assets for consideration
at least equal to the Fair Market Value of the assets sold or
disposed of, but only if the consideration received consists of
property or assets (other than cash, except to the extent used as a
bona fide means of equalizing the value of the property or assets
involved in the swap transaction; provided, however, that cash does
not exceed 10% of the sum of the amount of the cash and the Fair
Market Value of the assets received or given) of a nature or type
that are used in, a business having property or assets of
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a nature or type or engaged in a Permitted Business (or Capital
Stock of a Person whose assets consist of assets of the type
described in this clause (9)); and
(10) the sale, transfer or disposition of any investment in, or any
assets of ICN Czech and ICN Hungary, in each case existing on the
date of this Indenture, or any Investment in any other entity that
holds such investments or assets as its only assets.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11 of the United States Code (or any
successor thereto) or any similar federal or state law for the relief of
debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have corresponding meanings.
"Board of Directors" means:
(1) with respect to a company or corporation, the board of directors of
the company or corporation or any committee thereof duly authorized
to act on behalf of such board;
(2) with respect to a partnership, the Board of Directors of the general
partner of the partnership or any committee thereof duly authorized
to act on behalf of such board; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
"Borrowing Base" means, as of any date, an amount equal to:
(1) 85% of the face amount of all accounts receivable owned by the
Company and its Restricted Subsidiaries as of the end of the most
recent fiscal quarter preceding such date that were not more than 90
days past due; plus
(2) 60% of the book value of all inventory, net of reserves, owned by
the Company and its Restricted Subsidiaries as of the end of the
most recent fiscal quarter preceding such date; minus
3
(3) the aggregate amount of trade payables of the Company and its
Restricted Subsidiaries outstanding as of the end of the most recent
fiscal quarter preceding such date, all calculated on a consolidated
basis and in accordance with GAAP.
"Business Day" means each day that is not a Legal Holiday.
"Capital Lease Obligations" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited);
and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) securities issued or directly and fully guaranteed or insured by the
U.S. government or any agency or instrumentality thereof (provided,
that the full faith and credit of the U.S. is pledged in support
thereof) having repricings or maturities of not more than one year
from the date of acquisition;
(2) certificates of deposit and time deposits with maturities of one
year or less from the date of acquisition, bankers' acceptances with
maturities not exceeding one year and overnight bank deposits, in
each case, with any domestic commercial bank having capital and
surplus in excess of $500.0 million and a Thomson Bank Watch Rating
of "B" or better;
(3) repurchase obligations with a term of not more than 14 days for
underlying securities of the types described in clauses (1) and (2)
above entered into with any financial institution meeting the
qualifications specified in clause (2) above;
(4) commercial paper having a rating of at least "P-2" or better from
Xxxxx'x or at least "A-2" or better from S&P, or carrying an
equivalent rating by an internationally recognized rating agency
and, in each case, maturing within one year after the date of
acquisition;
(5) Auction-rate, corporate and municipal securities, in each case (x)
having either short-term debt ratings of at least "P-2" or better
from Xxxxx'x or at least "A-2" or better from S&P or long-term
senior debt ratings of "A2" or better from
4
Xxxxx'x or at least "A" or better from S&P, or carrying an
equivalent rating by an internationally recognized rating agency,
(y) having repricings or maturities of not more than one year from
the date of acquisition and (z) which are classifiable as cash and
cash equivalents under GAAP;
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (5)
of this definition;
(7) in the case of any Foreign Subsidiary:
(a) direct obligations of the sovereign nation, or any agency
thereof, in which such Foreign Subsidiary is organized and is
conducting business or in obligations fully and
unconditionally guaranteed by such sovereign nation, or any
agency thereof; provided, that such obligations are acquired
and held by such Foreign Subsidiary in the ordinary course of
business and have repricings or maturities of not more than
one year from the date of acquisition; or
(b) investments of the type and maturity described in clauses (1)
through (5) above of foreign obligors, which investments or
obligors have ratings described in such clauses or equivalent
ratings from internationally recognized rating agencies;
provided, that such investments are acquired and held by such
Foreign Subsidiary in the ordinary course of business.
"Change of Control" means the occurrence of any of the following:
(1) any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) becomes the Beneficial Owner of shares of the
Company's Voting Stock representing (i) 50% or more of the total
voting power of all of the Company's outstanding Voting Stock or
(ii) the power, directly or indirectly, or elect a majority of the
members of the Company's Board of Directors;
(2) the Company consolidates with, or merges with or into, another
Person, or the Company, directly or indirectly, sells, assigns,
conveys, transfers, leases or otherwise disposes of all or
substantially all of the properties or assets of the Company and its
Restricted Subsidiaries, taken as a whole (other than by way of
merger or consolidation), in one or a series of related
transactions, or any Person consolidates with, or merges with or
into, the Company, in any such event other than pursuant to a
transaction in which the Persons that Beneficially Owned the shares
of the Company's Voting Stock immediately prior to such transaction
Beneficially Own at least a majority of the total voting power of
all outstanding Voting Stock (other than Disqualified Stock) of the
surviving or transferee Person;
(3) the holders of the Company's Capital Stock approve any plan or
proposal for the liquidation or dissolution of the Company (whether
or not otherwise in compliance with this Indenture); or
5
(4) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such
Board of Directors or whose nomination for election by the
shareholders of the Company has been approved by a majority of the
directors then still in office who either were directors at the
beginning of such period or whose election or recommendation for
election was previously so approved) cease to constitute a majority
of the Board of Directors of the Company.
"Clearstream" means Clearstream Banking, societe anonyme, Luxembourg.
"Common Stock" means the common stock of the Company, $.01 par value per
share, as it exists on the date of this Indenture and any shares of any class or
classes of capital stock of the Company resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to redemption
by the Company.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such successor Company.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss realized
by such Person or any of its Restricted Subsidiaries in connection
with an Asset Sale, to the extent such losses were deducted in
computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Interest Rate Hedging Obligations), to the
extent that any such expense was deducted in computing such
Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of intangibles
but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or
6
amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net
Income; minus
(5) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business,
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a Restricted Subsidiary of the Company will be added to Consolidated Net
Income to compute Consolidated Cash Flow of the Company only to the extent that
a corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of
dividends or distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is
not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or
its stockholders;
(3) the cumulative effect of a change in accounting principles will be
excluded;
(4) any extraordinary or nonrecurring gain or loss and any expense or
charge in connection with acquired in-process research and
development will be excluded;
(5) any extraordinary or nonrecurring gain or loss and any expense or
charge attributable to the disposition of discontinued operations
will be excluded;
(6) charges incurred in connection with the retirement or redemption of
the 6-1/2% Notes will be excluded; and
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(7) the Net Income (but not loss) of any Unrestricted Subsidiary will be
excluded, whether or not distributed to the specified Person or one
of its Subsidiaries.
"Co-Obligor" means Ribapharm, for so long as Ribapharm has outstanding
obligations under the 6-1/2% Notes, originally issued under an indenture among
the Company, Ribapharm and the trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at the date of the execution of this Indenture is located at 000
Xxxxxxx Xxxxxx - 0X, Xxx Xxxx, XX 00000, Attention: Corporate Trust
Administration or at any other time at such other address as the Trustee may
designate from time to time by notice to the Obligors.
"Credit Facilities" means, one or more debt facilities or commercial paper
facilities, in each case with banks or other institutional lenders providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit or other
borrowings, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced (including by means of sales of debt securities to
institutional investors) in whole or in part from time to time.
"Current Dividend" means a quarterly dividend on the Common Stock in an
amount not to exceed $0.33 per share per annum, which amount will be reduced to
reflect any subdivision of the Common Stock by means of a stock split, stock
dividend or otherwise.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Securities" means Securities that are in substantially the
form attached hereto as Exhibit A and that do not include the information to
which footnotes 1, 6 and 7 thereof apply.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Securities mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
will not constitute Disqualified Stock if the terms of such Capital Stock
provide that the Company may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
Section 4.8 hereof
8
"Domestic Subsidiary" means any Restricted Subsidiary that was formed
under the laws of the United States or any state thereof or the District of
Columbia or that guarantees or otherwise provides direct credit support for any
Indebtedness of the Company or the Co-Obligor.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means a public or private offering of Equity Interests
(other than Disqualified Stock).
"Euroclear" means Xxxxxx Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, as in effect from time to
time.
"Exchange Securities" means the 7.0% Senior Notes due 2011 to be issued by
the Company and Ribapharm pursuant to this Indenture in the Exchange Offer.
"Exchange Offer" means the exchange and issuance by the Company and
Ribapharm of a principal amount of Exchange Securities (which shall be
registered pursuant to the Exchange Offer Registration Statement) equal to the
outstanding principal amount of Securities that are properly tendered and not
subsequently withdrawn by such Holders in connection with such exchange and
issuance.
"Exchange Offer Registration Statement" means the Registration Statement
relating to the Exchange Offer, including the related Prospectus.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness, if any, under Credit
Facilities incurred under Section 4.9(b)(i) hereof) in existence on the date of
this Indenture, until such amounts are repaid.
"Fair Market Value" means the price that could be negotiated in an
arm's-length transaction, for cash, between a willing seller and a willing and
able buyer, neither of whom is under undue pressure or compulsion to complete
the transaction, determined in good faith by the Board of Directors of the
Company (unless otherwise provided in this Indenture).
"Final Maturity Date," means December 15, 2011.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"CALCULATION DATE"), then the
9
Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such
incurrence, assumption, Guarantee, repayment, repurchase or redemption of
Indebtedness, or such issuance, repurchase or redemption of preferred stock, and
the use of the proceeds therefrom as if the same had occurred at the beginning
of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through consolidations or
mergers and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date will be given pro forma
effect as if they had occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference
period will be calculated on a pro forma basis in accordance with
Regulation S-X under the Securities Act;
(2) the Consolidated Cash Flow attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded, but
only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the specified Person or any of
its Restricted Subsidiaries following the Calculation Date.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Interest Rate Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon;
plus
10
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such
Person or any of its Restricted Subsidiaries, other than dividends
on Equity Interests payable solely in Equity Interests of the
Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus
the then current combined federal, state and local statutory tax
rate of such Person, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Securities" means Securities that are substantially in the form
attached hereto as Exhibit A and that include the information called for by
footnotes 1, 6 and 7 thereof, and which are deposited with the Depositary or its
custodian and registered in the name of the Depositary or its nominee.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means any Subsidiary that executes a Guarantee in accordance
with the provisions of this Indenture and its successors and assigns.
"Hedging Obligations" means, with respect to any specified Person
(1) Interest Rate Hedging Obligations; and
(2) the obligations of such Person under agreements or arrangements
designed to protect such Person against fluctuations in currency
exchange rates.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Primary Registrar's books.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
11
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations or Attributable Debt in
respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the purchase price
of any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any interest
on the Indebtedness that is more than 30 days past due, in the case
of any other Indebtedness.
"Indenture" means this Indenture as amended or supplemented from time to
time pursuant to the terms of this Indenture.
"Interest" on any Security shall refer to interest and Additional Interest
thereon, unless the context otherwise requires.
"Interest Rate Hedging Obligations" means, with respect to any specified
Person, the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise
12
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
will be deemed to have made an Investment on the date of any such sale or
disposition equal to the Fair Market Value of the Company's Investments in such
Subsidiary that were not sold or disposed of in an amount determined as provided
in Section 4.8(c) hereof. The acquisition by the Company or any Restricted
Subsidiary of the Company of a Person that holds an Investment in a third Person
will be deemed to be an Investment by the Company or such Restricted Subsidiary
in such third Person in an amount equal to the Fair Market Value of the
Investments held by the acquired Person in such third Person in an amount
determined as provided in Section 4.8(c) hereof. For the avoidance of doubt,
acquisitions of or licenses for products or assets used or useful in a Permitted
Business do not constitute Investments.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge (fixed and/or floating), security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or otherwise perfected
under applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor to the
rating agency business thereof.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with: (a)
any Asset Sale; or (b) the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the extinguishment
of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, taxes paid or payable as a result of the
Asset Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, and amounts required to be applied
to the repayment of Indebtedness, other than Indebtedness under a Credit
Facility, secured by a Lien on the asset or assets that were the subject of such
Asset Sale and any reserve for adjustment in respect of the sale price of such
asset or assets established in accordance with GAAP.
13
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable as a guarantor
or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action
against an Unrestricted Subsidiary) would permit upon notice, lapse
of time or both any holder of any other Indebtedness (other than the
Securities) of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment of
the Indebtedness to be accelerated or payable prior to its stated
maturity; and
(3) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of the Company or any
of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Obligors" means the Company and Ribapharm; provided that at such time as
Ribapharm is no longer the Co-Obligor pursuant to the applicable provisions of
this Indenture, and thereafter "Obligors" shall mean the Company.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Chief Financial Officer, the Controller,
Treasurer, the Secretary or any Assistant Controller, Assistant Treasurer or
Assistant Secretary of each of the Obligors.
"Officers' Certificate" means a certificate signed by two Officers;
provided, however, that for purposes of Section 4.4 hereof, "Officers'
Certificate" means a certificate signed by the principal executive officer,
principal financial officer or principal accounting officer of each of the
Obligors and by one other Officer.
"Opinion of Counsel" means a written opinion from legal counsel. The
counsel may be an employee of or counsel to each of the Obligors or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a person who has an account with the Depositary, Euroclear or
Clearstream, respectively, and, with respect to the Depository Trust Company,
shall include Euroclear and Clearstream.
"Permitted Business" means any business conducted by the Company and its
Restricted Subsidiaries on the date of this Indenture and any business
reasonably related, ancillary or
14
complimentary to the business of the Company and its Restricted Subsidiaries on
the date of this Indenture.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of the
Company;
(2) any Investment in cash and Cash Equivalents;
(3) any Investment by the Company or any Subsidiary of the Company in a
Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Company; or
(b) such Person is merged or consolidated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the
Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.14 hereof;
(5) any Investments made solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;
(6) any Investments received in compromise of obligations of such
persons incurred in the ordinary course of trade creditors or
customers that were incurred in the ordinary course of business,
including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor
or customer;
(7) Investments represented by Hedging Obligations;
(8) Investments in existence on the date of this Indenture;
(9) Investments in a Permitted Joint Venture, when taken together with
all other Investments made pursuant to this clause (9) that are at
the time outstanding not to exceed $25.0 million; and
(10) other Investments in any Person having an aggregate Fair Market
Value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause
(10) that are at the time outstanding not to exceed $25.0 million.
"Permitted Joint Venture" means any joint venture (which may be in the
form of a limited liability company, partnership, corporation or other entity)
in which the Company or any of its Restricted Subsidiaries is a joint venturer;
provided, however, that (a) the joint venture is engaged solely in a Permitted
Business and (b) the governing documents of the joint venture
15
require the consent of the Company or such Restricted Subsidiary with respect to
any material decisions relating to the activities of the joint venture.
"Permitted Liens" means:
(1) Liens securing Indebtedness and other Obligations under Credit
Facilities that were permitted by the terms of this Indenture to be
incurred under Section 4.9(b)(i) hereof;
(2) Liens in favor of the Company;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with or is acquired by the
Company or any Subsidiary of the Company; provided, that such Liens
were not incurred in contemplation of such merger, consolidation or
acquisition and do not extend to any assets other than those of the
Person merged into, consolidated with or acquired by the Company or
the Subsidiary;
(4) Liens on property existing at the time of acquisition of the
property by the Company or any Subsidiary of the Company, provided,
that such Liens were not incurred in contemplation of such
acquisition;
(5) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like
nature incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by Section 4.9(b)(iv) hereof, covering only the assets
acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently
concluded, provided, that any reserve or other appropriate provision
as is required in conformity with GAAP has been made therefor;
(9) Liens securing Hedging Obligations;
(10) Liens arising by reason of deposits necessary to obtain standby
letters of credit in the ordinary course of business (including
deposits necessary to obtain standby letters of credit);
(11) Liens to secure any Permitted Refinancing Indebtedness permitted to
be incurred under the Indenture; provided, however, that:
16
(a) the new Lien shall be limited to all or part of the same
property and assets that secured or, under the written
agreements pursuant to which the original Lien arose, could
secure the original Lien (plus improvements and accessions to,
such property or proceeds or distributions thereof); and
(b) the Indebtedness secured by the new Lien is not increased to
any amount greater than the sum of (x) the outstanding
principal amount or, if greater, committed amount, of the
Permitted Refinancing Indebtedness and (y) an amount necessary
to pay any fees and expenses, including premiums, related to
such refinancings, refunding, extension, renewal or
replacement;
(12) Liens incurred in the ordinary course of business of the Company or
any Restricted Subsidiary of the Company with respect to obligations
that do not exceed $25.0 million at any one time outstanding;
(13) survey title exceptions, title defects, encumbrances, easements,
reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph or telephone lines and other similar
purposes or zoning or other restrictions as to the use of real
property not materially interfering with the ordinary conduct of the
business of the Company and its Subsidiaries taken as a whole;
(14) Liens arising by operation of law in favor of landlords, mechanics,
carriers, warehousemen, materialmen, laborers, employees, suppliers
or the like, incurred in the ordinary course of business for sums
which are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the
collection thereof; and
(15) Liens arising out of judgments, decrees, orders or awards in respect
of which the Company shall in good faith be prosecuting an appeal or
proceedings for review which appeal or proceedings shall not have
been finally terminated, or if the period within which such appeal
or proceedings may be initiated shall not have expired.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided, that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness
extended, refinanced, renewed, replaced, defeased or refunded (plus
all accrued interest on the Indebtedness and the amount of all
expenses and premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life
to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
17
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the
Securities, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is
subordinated in right of payment to, the Securities on terms at
least as favorable to the Holders of Securities as those contained
in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principal" or "principal" of a debt security, including the Securities,
means the principal of the security plus, when appropriate, the premium, if any,
on the security.
"Prospectus" means the prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
"Purchase Agreement" means the Purchase Agreement, dated December 9, 2003,
among the Company, Ribapharm and Bear, Xxxxxxx & Co., Inc., as representative of
the initial purchasers named in Schedule I thereto.
"Redemption Date" or "redemption date" means the date specified for
redemption of the Securities in accordance with the terms thereof and this
Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of December 12, 2003, among the Company, Ribapharm and Bear, Xxxxxxx &
Co., Inc., as representative of the initial purchasers referred to therein.
"Registration Statement" means any registration statement of the Company
and Ribapharm (if Ribapharm is, at the time of the filing of such registration
statement, a co-obligor on the Securities) under the Securities Act relating to
an offering of Exchange Securities pursuant to the Exchange Offer, including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
"Regulation S" means Regulation S under the Securities Act or any
successor to such regulation.
"Regulation S Global Security" means a Regulation S Temporary Global
Security or Regulation S Permanent Global Security, as appropriate.
18
"Regulation S Permanent Global Security" means a permanent Global Security
in substantially the form of Exhibit A hereto that includes the information
called for by footnotes 1, 6 and 7 thereof and that is deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in
a denomination equal to the outstanding principal amount of the Regulation S
Temporary Global Security upon expiration of the Restricted Period.
"Regulation S Temporary Global Security" means a temporary Global Security
in substantially the form of Exhibit A hereto that includes the information
called for by footnotes 1, 5, 6 and 7 thereof and that is deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in
a denomination equal to the outstanding principal amount of the Securities
initially sold in reliance on Rule 903 of Regulation S.
"Restricted Global Security" means a permanent Global Security in
substantially the form of Exhibit A attached hereto that bears the Global
Security Legend and that has the "Schedule of Exchanges of Interests in the
Global Security" attached thereto, and that is deposited with or on behalf of
and registered in the name of the Depositary or a nominee of the Depositary,
representing Securities that bear the Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
"Restricted Definitive Security" means a Definitive Security that is a
Restricted Security.
"Restricted Global Security" means a Global Security that is a Restricted
Security.
"Restricted Security" means a Security required to bear the restricted
legend set forth in the form of Securities set forth in Exhibit A of this
Indenture.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Ribapharm" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to the applicable provisions of
this Indenture, and thereafter "Ribapharm" shall mean such successor.
"Rule 144" means Rule 144 promulgated under the Securities Act or any
successor to such rule.
"Rule 144A" means Rule 144A promulgated under the Securities Act or any
successor to such rule.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
19
"S&P" means Standard & Poor's Ratings Group, Inc., or any successor to the
rating agency business thereof.
"SEC" means the Securities and Exchange Commission.
"Securities" means any of the 7.0% Senior Notes due 2011 (each, a
"Security"), as amended or supplemented from time to time, that are issued under
this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"Securities Custodian" means the Trustee, as custodian with respect to the
Securities in global form, or any successor thereto.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such regulation is in effect on the date
hereof.
"6 1/2% Indenture" means the indenture, dated July 18, 2001, among the
Company, Ribapharm and The Bank of New York under which the 6 1/2% Notes were
originally issued.
"6 1/2% Notes" means any of the 6 1/2% Convertible Subordinated Notes due
July 15, 2008, originally issued under the 6 -1/2% Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time
owned or controlled, directly or indirectly, by that Person or one
or more of the other Subsidiaries of that Person (or a combination
thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or
more Subsidiaries of that Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939, as amended, and the rules and
regulations thereunder as in effect on the date of this Indenture, except as
provided in Section 9.3 hereof, and except to the extent any amendment to the
Trust Indenture Act expressly provides for application of the Trust Indenture
Act as in effect on another date.
20
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
this Indenture, and thereafter means the successor.
"Trust Officer" means, with respect to the Trustee, any officer assigned
to the Corporate Trust Office, and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Unrestricted Definitive Security" means a Definitive Security that is not
a Restricted Security.
"Unrestricted Global Security" means a Global Security that is not a
Restricted Security.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that is designated by the Board of
Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, and
(2) ICN Yugoslavia DD (formerly ICN Galenika),
in each case only to the extent that such Subsidiary:
(a) has no Indebtedness other than Non-Recourse Debt;
(b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or
such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company;
(c) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or
preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; and
(d) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary (other than the foregoing designation of ICN Yugoslavia DD as an
Unrestricted Subsidiary) will be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 4.8 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it will thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date, and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.9 hereof, the Company will be in
default of such
21
covenant. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such Indebtedness
is permitted under Section 4.9 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence following
such designation.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Vice President" when used with respect to either of the Obligors or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final
maturity, in respect of the Indebtedness, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
Section 1.2 Other Definitions.
TERM DEFINED IN SECTION
------------------------------------------------------------------------------------- ------------------------
"Affiliate Transaction".............................................................. 4.13(a)
"Agent Members"...................................................................... 2.1(b)
"Asset Sale Offer"................................................................... 4.14(c)/3.14
"Benefited Party".................................................................... 10.2(b)
"Change of Control Offer ............................................................ 3.8(b)
"Change of Control Purchase Date".................................................... 3.8(b)
"Change of Control Purchase Notice".................................................. 3.8(c)
"Change of Control Purchase Price"................................................... 3.8(a)
"Covenant Defeasance"................................................................ 8.3
"DTC"................................................................................ 2.1(a)
"Depositary"......................................................................... 2.1(a)
"Event of Default"................................................................... 6.1
"Excess Proceeds".................................................................... 4.14(c)
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TERM DEFINED IN SECTION
------------------------------------------------------------------------------------- ------------------------
"incur".............................................................................. 4.9(a)
"Legal Defeasance"................................................................... 8.2
"Legal Holiday"...................................................................... 11.7
"Legend" ............................................................................ 2.12(a)
"Notice of Default".................................................................. 6.1
"Obligors Notice".................................................................... 3.8(b)
"Obligors Order"..................................................................... 2.2
"Offer Amount"....................................................................... 3.14
"Offer Period"....................................................................... 3.14
"Parity Indebtedness"................................................................ 3.14
"Paying Agent"....................................................................... 2.3
"Payment Default".................................................................... 6.1(e)
"Permitted Debt"..................................................................... 4.9(b)
"Primary Registrar".................................................................. 2.3
"Purchase Date"...................................................................... 3.14
"QIB"................................................................................ 2.1
"Registrar".......................................................................... 2.3
"Restricted Payments"................................................................ 4.8(a)
Section 1.3 Trust Indenture Act Provisions.
Whenever this Indenture refers to a provision of the TIA, that provision
is incorporated by reference in and made a part of this Indenture. The Indenture
shall also include those provisions of the TIA required to be included herein by
the provisions of the Trust Indenture Reform Act of 1990. The following TIA
terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the indenture securities means the Obligors or any other
obligor on the Securities.
All other terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by any SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
Section 1.4 Rules of Construction.
Unless the context otherwise requires:
(A) a term has the meaning assigned to it;
23
(B) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(C) words in the singular include the plural, and words in the
plural include the singular;
(D) provisions apply to successive events and transactions;
(E) the term "merger" includes a statutory share exchange and the
term "merged" has a correlative meaning;
(F) the masculine gender includes the feminine and the neuter;
(G) references to agreements and other instruments include
subsequent amendments thereto;
(H) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(I) references to ratings by Moody's or S&P shall include any
successor equivalent ratings if either Moody's or S&P changes its ratings scale
subsequent to the date of this Indenture.
ARTICLE 2
THE SECURITIES
Section 2.1 Form and Dating.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form set forth in Exhibit A, which is incorporated in and
made part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Obligors shall
provide any such notations, legends or endorsements to the Trustee in writing.
The Securities shall be in denominations of $1,000 and integral multiples
thereof. Each Security shall be dated the date of its authentication. The
Securities are being offered and sold by the Obligors pursuant to the Purchase
Agreement, in transactions exempt from, or not subject to, the registration
requirements of the Securities Act.
(a) Restricted Global Securities. All of the Securities are
initially being offered and sold to (i) qualified institutional buyers as
defined in Rule 144A (collectively, "QIBS" or individually, each a "QIB") in
reliance on Rule 144A under the Securities Act or (ii) outside the United States
to persons other than U.S. persons in reliance upon Regulation S under the
Securities Act, and shall be issued initially in the form of one or more
Restricted Global Securities, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Trustee, as custodian
for the depositary, The Depository Trust Company ("DTC") (such depositary, or
any successor thereto, being hereinafter referred to as the "DEPOSITARY"), and
registered in the name of its nominee, Cede & Co., duly executed by the
24
Obligors and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Restricted Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Securities
Custodian as hereinafter provided, subject in each case to compliance with the
Applicable Procedures.
(b) Form of Securities. Global Securities shall be substantially
in the form of Exhibit A attached hereto (including the Global Security Legend
thereon and the "Schedule of Exchanges of Interests in the Global Security"
attached thereto). Definitive Securities shall be substantially in the form of
Exhibit A attached hereto (but without the Global Security Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Security" attached
thereto). Each Global Security shall represent such of the outstanding
Securities as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Securities from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Securities represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Security to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Securities represented thereby shall be made by
the Trustee or the Securities Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.12 hereof and shall be made on the records of the Trustee and the Depositary.
Members of, or participants in, the Depositary ("AGENT MEMBERS")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary or under the Global Security, and the
Depositary (including, for this purpose, its nominee) may be treated by the
Obligors, the Trustee and any agent of the Obligors or the Trustee as the
absolute owner and Holder of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall (A) prevent the Obligors,
the Trustee or any agent of the Obligors or the Trustee from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary or (B) impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(c) Additional Securities. Subject to compliance with the
provisions of Section 4.9 hereof, the Obligors may issue Additional Securities
in an unlimited amount under this Indenture.
(d) Temporary Global Securities. Securities offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Security, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Trustee, at its New
York office, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Clearstream, duly executed by the
Obligors and authenticated by the Trustee as hereinafter provided. Following the
termination of the Restricted Period, beneficial interests in the Regulation S
Temporary Global Security shall be exchanged for beneficial interests in
Regulation S Permanent Global Securities pursuant to the Applicable Procedures.
Simultaneously with the authentication of Regulation S Permanent Global
Securities, the Trustee shall cancel the Regulation S Temporary Global Security.
The aggregate principal amount of the
25
Regulation S Temporary Global Security and the Regulation S Permanent Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
(e) Book Entry Provisions. The Obligors shall execute and the
Trustee shall, in accordance with this Section 2.1(e), authenticate and deliver
initially one or more Global Securities that (i) shall be registered in the name
of the Depositary or its nominee, (ii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instructions and (iii) shall bear
legends substantially in the form of the first paragraph of Exhibit A hereto.
Section 2.2 Execution and Authentication.
An Officer of each of the Obligors shall sign the Securities for the
Obligors by manual or facsimile signature. Typographic and other minor errors or
defects in any such facsimile signature shall not affect the validity or
enforceability of any Security which has been authenticated and delivered by the
Trustee.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate and make available for delivery Securities
for original issue in an initial aggregate principal amount of $300,000,000 upon
receipt of a written order or orders of the Obligors signed by an Officer of the
Obligors (an "OBLIGORS ORDER"). The Obligors Order shall specify the amount of
Securities to be authenticated and shall provide that all such Securities will
be represented by a Restricted Global Security and the date on which each
original issue of Securities is to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed the amounts in the
foregoing sentence, except as provided in Sections 2.1(c), 2.1(d) and 2.7
hereof.
The Trustee shall act as the initial authenticating agent. Thereafter, the
Trustee may appoint an authenticating agent acceptable to the Obligors to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent shall have the same rights as an Agent to deal with the
Obligors or an Affiliate of the Obligors.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 principal amount and any integral multiple
thereof.
Section 2.3 Registrar and Paying Agent.
The Obligors shall maintain one or more offices or agencies where
Securities may be presented for registration of transfer or for exchange (each,
a "REGISTRAR"), one or more offices
26
or agencies where Securities may be presented for payment (each, a "PAYING
AGENT") and one or more offices or agencies where notices and demands to or upon
the Obligors in respect of the Securities and this Indenture may be served. The
Obligors will at all times maintain a Paying Agent, Registrar and an office or
agency where notices and demands to or upon the Obligors in respect of the
Securities and this Indenture may be served in the Borough of Manhattan, The
City of New York. One of the Registrars (the "PRIMARY REGISTRAR") shall keep a
register of the Securities and of their transfer and exchange.
The Obligors shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Obligors shall
notify the Trustee of the name and address of any Agent not a party to this
Indenture. If the Obligors fail to maintain a Registrar, Paying Agent or agent
for service of notices and demands in any place required by this Indenture, or
fail to give the foregoing notice, the Trustee shall act as such. The Obligors
or any Affiliate of the Obligors may act as Paying Agent (except for the
purposes of Section 4.1 and Article 8).
The Obligors hereby initially designate the Trustee as Paying Agent,
Registrar and Securities Custodian, and the office or agency of the Trustee in
the Borough of Manhattan, The City of New York (which shall initially be the
office of the Trustee located at 000 Xxxxxxx Xxxxxx - 0X, Xxx Xxxx, XX 00000) as
one such office or agency of the Obligors for each of the aforesaid purposes.
Section 2.4 Paying Agent to Hold Money in Trust.
Prior to 11:00 a.m., New York City time, on each due date of the principal
of, interest or Additional Interest, if any, on any Securities, the Obligors
shall deposit with a Paying Agent a sum sufficient to pay such principal,
interest or Additional Interest, if any, so becoming due. A Paying Agent shall
hold in trust for the benefit of Securityholders or the Trustee all money held
by the Paying Agent for the payment of principal of, interest or Additional
Interest, if any, on the Securities, and shall notify the Trustee of any default
by the Obligors (or any other obligor on the Securities) in making any such
payment. If the Obligors or an Affiliate of the Obligors act as Paying Agent,
the Obligors or such Affiliate shall, before 11:00 a.m., New York City time, on
each due date of the principal of, interest or Additional Interest, if any, on
any Securities, segregate the money and hold it as a separate trust fund. The
Obligors at any time may require a Paying Agent to pay all money held by it to
the Trustee, and the Trustee may at any time during the continuance of any
default, upon written request to a Paying Agent, require such Paying Agent to
pay forthwith to the Trustee all sums so held in trust by such Paying Agent.
Upon doing so, the Paying Agent (other than the Obligors) shall have no further
liability for the money.
Section 2.5 Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Primary Registrar, the Obligors shall
furnish to the Trustee on or before each interest payment date, and at such
other times as the Trustee may request in writing, a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
Securityholders.
27
Section 2.6 Transfer and Exchange.
(a) Subject to compliance with any applicable additional
requirements contained in Section 2.12 hereof, when a Security is presented to a
Registrar with a request to register a transfer thereof or to exchange such
Security for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested; provided, however, that every Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by an
assignment form and, if applicable, a transfer certificate in the form(s)
included in Exhibit A and Exhibit B, as applicable, and in form satisfactory to
the Registrar, duly executed by the Holder thereof or its attorney duly
authorized in writing. To permit registration of transfers and exchanges, upon
surrender of any Security for registration of transfer or exchange at an office
or agency maintained pursuant to Section 2.3 hereof, the Obligors shall execute
and the Trustee shall authenticate Securities of a like aggregate principal
amount at the Registrar's request. Any exchange or transfer shall be without
charge, except that the Obligors or the Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto, and provided, that this sentence shall not apply to any
exchange pursuant to Section 2.10, 2.12(a), 3.6, 3.11 or 9.5 hereof.
Neither the Obligors, any Registrar nor the Trustee shall be required to
exchange or register a transfer of any Securities or portions thereof in respect
of which a Change of Control Purchase Notice or a notice in connection with an
Asset Sale Offer has been delivered and not withdrawn by the Holder thereof
(except, in the case of the purchase of a Security in part, the portion thereof
not to be purchased).
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Obligors, evidencing the same debt and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
(b) Any Registrar appointed pursuant to Section 2.3 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(c) Each Holder of a Security agrees to indemnify the Obligors and
the Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States federal or state securities law.
Section 2.7 Replacement Securities.
If any mutilated Security is surrendered to the Obligors, a Registrar or
the Trustee, or the Obligors, a Registrar and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Security, and there
is delivered to the Obligors, the applicable Registrar and the Trustee such
security or indemnity as will be required by them to save each of them harmless,
then, in the absence of notice to the Obligors, such Registrar or the Trustee
that such Security has been acquired by a bona fide purchaser, the Obligors
shall execute, and upon its written request the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu
28
of any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Obligors pursuant to Article 3, the Obligors in their discretion may, instead of
issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.7, the
Obligors may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the reasonable fees and expenses of the Trustee
or the Registrar) in connection therewith.
Every new Security issued pursuant to this Section 2.7 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Obligors, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section 2.7 are (to the extent lawful) exclusive
and shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
Section 2.8 Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by the
Trustee, except for those canceled by it, those delivered to it for cancellation
or surrendered for transfer or exchange and those described in this Section 2.8
as not outstanding.
If a Security is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Obligors receive proof satisfactory to them that the
replaced Security is held by a bona fide purchaser.
If a Paying Agent (other than the Obligors or an Affiliate of the
Obligors) holds on a Redemption Date, Change of Control Purchase Date or the
Final Maturity Date money sufficient to pay the principal of (including premium,
if any), interest and Additional Interest, if any, on Securities (or portions
thereof) payable on that date, then on and after such Redemption Date, Change of
Control Purchase Date or the Final Maturity Date, as the case may be, such
Securities (or portions thereof, as the case may be) shall cease to be
outstanding and interest and Additional Interest, if any, on them shall cease to
accrue.
Subject to the restrictions contained in Section 2.9 hereof, a Security
does not cease to be outstanding because the Obligors or an Affiliate of the
Obligors hold the Security.
Section 2.9 Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any notice, direction, waiver or consent,
Securities owned by the Obligors or any
29
other obligor on the Securities or by any Affiliate of the Obligors or of such
other obligor shall be disregarded, except that, for purposes of determining
whether the Trustee shall be protected in relying on any such notice, direction,
waiver or consent, only Securities which a Trust Officer of the Trustee actually
knows are so owned shall be so disregarded. Securities so owned which have been
pledged in good faith shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to the
Securities and that the pledgee is not the either of Obligors or any other
obligor on the Securities or any Affiliate of the Obligors or of such other
obligor.
Section 2.10 Temporary Securities.
Until Definitive Securities are ready for delivery, the Obligors may
prepare and execute, and, upon receipt of a Obligors Order, the Trustee shall
authenticate and deliver, temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Obligors with the consent of the Trustee considers appropriate for temporary
Securities. Without unreasonable delay, the Obligors shall prepare and the
Trustee shall authenticate and deliver definitive Securities in exchange for
temporary Securities.
Section 2.11 Cancellation.
The Obligors at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee or
its agent any Securities surrendered to them for transfer, exchange, payment or
conversion. The Trustee and no one else shall cancel, in accordance with its
standard procedures, all Securities surrendered for transfer, exchange, payment,
conversion or cancellation and shall deliver the canceled Securities to the
Obligors. All Securities which are purchased or otherwise acquired by the
Obligors or any of their Subsidiaries prior to the Final Maturity Date may be
delivered to the Trustee for cancellation or, if permitted by the Purchase
Agreement, be resold. The Obligors may not hold or resell such Securities or
issue any new Securities to replace any Securities delivered for cancellation
Section 2.12 Legend; Additional Transfer and Exchange Requirements.
(a) If Securities are issued upon the transfer, exchange or
replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the form of Securities attached hereto as Exhibit A
(collectively, the "LEGEND"), or if a request is made to remove the Legend on a
Security, the Securities so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Obligors
and the Registrar such satisfactory evidence, which shall include an opinion of
counsel if requested by the Obligors or such Registrar, as may be reasonably
required by the Obligors and the Registrar, that neither the Legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144 under the Securities Act or that
such Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act; provided that no such evidence need be supplied in connection
with the sale of such Security pursuant to a registration statement that is
effective at the time of such sale. Upon (i) provision of such satisfactory
evidence if requested, or (ii) notification by the Obligors to the Trustee and
Registrar of the sale of such Security pursuant to a registration statement that
is effective at the time of
30
such sale, the Trustee, at the written direction of the Obligors, shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently held by
an Affiliate of the Obligors, the Legend shall be reinstated.
(b) A Global Security may not be transferred, in whole or in part,
to any Person other than the Depositary or a nominee or any successor thereof,
and no such transfer to any such other Person may be registered; provided that
the foregoing shall not prohibit any transfer of a Security that is issued in
exchange for a Global Security but is not itself a Global Security; provided
further that in no event shall (x) the Regulation S Temporary Global Security be
exchanged by the Obligors for a Regulation S Permanent Global Security or (y) a
beneficial interest in a Regulation S Global Security be transferred to a U.S.
Person, prior to (A) the expiration of the Restricted Period and (B) the receipt
by the Registrar of any certificates required pursuant to Regulation S, as
determined by the Obligors. No transfer of a Security to any Person shall be
effective under this Indenture or the Securities unless and until such Security
has been registered in the name of such Person. Notwithstanding any other
provisions of this Indenture or the Securities, transfers of a Global Security,
in whole or in part, shall be made only in accordance with this Section 2.12.
(c) Subject to the succeeding paragraph, every Security shall be
subject to the restrictions on transfer provided in the Legend. Whenever any
Restricted Security is presented or surrendered for registration of transfer or
for exchange for a Security registered in a name other than that of the Holder,
such Security must be accompanied by a certificate in substantially the form set
forth in Exhibit A, dated the date of such surrender and signed by the Holder of
such Security, as to compliance with such restrictions on transfer. The
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.
(d) The restrictions imposed by the Legend upon the
transferability of any Security shall cease and terminate when such Security has
been exchanged for an Exchange Security in the Exchange Offer, sold pursuant to
an effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by, if requested by the Obligors or
the Registrar, an opinion of counsel reasonably acceptable to the Obligors and
addressed to the Obligors to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged
for a new Security, of like tenor and aggregate principal amount, which shall
not bear the restrictive Legend. The Obligors shall inform the Trustee of the
consummation of the Exchange Offer and the effective date of any registration
statement registering the Securities under the Securities Act. The Trustee shall
not be liable for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned opinion of counsel or registration statement.
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(e) As used in this Section 2.12, the term "transfer" encompasses
any sale, pledge, transfer, hypothecation or other disposition of any Security.
(f) The provisions of clauses (iii), (iv) and (v) below shall
apply only to Global Securities:
(i) Notwithstanding any other provisions of this Indenture
or the Securities, a Global Security shall not be exchanged in whole or in
part for a Security registered in the name of any Person other than the
Depositary or one or more nominees thereof, provided that a Global
Security may be exchanged for Securities registered in the names of any
person designated by the Depositary in the event that (A) the Depositary
(x) has notified the Obligors that it is unwilling or unable to continue
as Depositary for such Global Security or (y) such Depositary has ceased
to be a "clearing agency" registered under the Exchange Act and, in either
case, a successor Depositary is not appointed by the Obligors within 90
days after receipt of such notice or the Obligors become aware of such
failure of registration, (B) the Obligors have provided the Depositary
with written notice that they have elected to cause the issuance of the
Definitive Securities or (C) an Event of Default has occurred and is
continuing with respect to the Securities. Any Global Security exchanged
pursuant to clause (A) above shall be so exchanged in whole and not in
part, and any Global Security exchanged pursuant to clause (B) or (C)
above may be exchanged in whole or from time to time in part as directed
by the Depositary. Any Security issued in exchange for a Global Security
or any portion thereof shall be a Global Security; provided that any such
Security so issued that is registered in the name of a Person other than
the Depositary or a nominee thereof shall not be a Global Security.
(ii) Securities issued in exchange for a Global Security or
any portion thereof shall be issued in definitive, fully registered form,
without interest coupons, shall have an aggregate principal amount equal
to that of such Global Security or portion thereof to be so exchanged,
shall be registered in such names and be in such authorized denominations
as the Depositary shall designate and shall bear the applicable legends
provided for herein. Any Global Security to be exchanged in whole shall be
surrendered by the Depositary to the Trustee, as Registrar. With regard to
any Global Security to be exchanged in part, either such Global Security
shall be so surrendered for exchange or, if the Trustee is acting as
custodian for the Depositary or its nominee with respect to such Global
Security, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon any such
surrender or adjustment, the Trustee shall authenticate and deliver the
Security issuable on such exchange to or upon the order of the Depositary
or an authorized representative thereof.
(iii) Subject to the provisions of clause (v) below, the
registered Holder may grant proxies and otherwise authorize any Person,
including Agent Members and persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(iv) In the event of the occurrence of any of the events
specified in clause (i) above, the Obligors will promptly make available
to the Trustee a reasonable
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supply of Definitive Securities in definitive, fully registered form,
without interest coupons.
(v) Neither Agent Members nor any other Persons on whose
behalf Agent Members may act shall have any rights under this Indenture
with respect to any Global Security registered in the name of the
Depositary or any nominee thereof, or under any such Global Security, and
the Depositary or such nominee, as the case may be, may be treated by the
Obligors, the Trustee and any agent of the Obligors or the Trustee as the
absolute owner and holder of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Obligors, the Trustee or any agent of the Obligors or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or such nominee, as the case may be, or
impair, as between the Depositary, its Agent Members and any other Person
on whose behalf an Agent Member may act, the operation of customary
practices of such Persons governing the exercise of the rights of a holder
of any Security.
(vi) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Agent Members or beneficial owners in any Global Security) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so as and when expressly
required by, the terms or this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
(g) Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the equivalent procedures of
Clearstream shall be applicable to transfers of beneficial interests in Global
Securities that are held by Participants through Euroclear or Clearstream.
(h) Exchange Offer. Upon the consummation of the Exchange Offer in
accordance with the Registration Rights Agreement, the Obligors shall issue and,
upon receipt of an Obligors Order, and any documents required by Section 11.4
hereof, the Trustee shall authenticate (i) one or more Unrestricted Global
Securities in an aggregate principal amount equal to the principal amount of the
beneficial interests in the Restricted Global Securities accepted for exchange
in the Exchange Offer and (ii) Unrestricted Definitive Securities in an
aggregate principal amount equal to the principal amount of the applicable
Restricted Definitive Securities accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Securities, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Securities to be
canceled or reduced accordingly, and the Trustee shall deliver to the Persons
designated by the Holders of the Definitive Securities so accepted Unrestricted
Definitive Securities in the appropriate principal amount.
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Section 2.13 CUSIP and ISIN Numbers.
The Obligors in issuing the Securities may use one or more "CUSIP" and
"ISIN" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" and "ISIN" numbers in notices of purchase as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a purchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such purchase shall
not be affected by any defect in or omission of such numbers. The Obligors will
promptly notify the Trustee of any change in the "CUSIP" and "ISIN" numbers.
ARTICLE 3
REDEMPTION AND PURCHASES
Section 3.1 Right to Redeem.
The Obligors, at their option, may redeem the Securities, in whole or in
part, on or after December 15, 2007, in accordance with the provisions of
Section 3.7 hereof.
The Obligors may not redeem the Securities if they have failed to pay any
interest or premium on the Securities and such failure to pay is continuing.
If the Obligors elect to redeem the Securities, they shall notify the
Trustee at least 45 days prior to the Redemption Date (unless a shorter notice
period shall be satisfactory to the Trustee) of the Redemption Date, the
aggregate principal amount of the Securities to be redeemed and the Section of
this Indenture pursuant to which the Securities are being redeemed.
Section 3.2 Selection of Securities to be Redeemed.
If less than all the outstanding Securities are to be redeemed, the
Trustee shall select the Securities for redemption as follows:
(1) if the Securities are listed on any securities exchange, in compliance
with the requirements of the principal securities exchange on which the
Securities are listed; or
(2) if the Notes are not listed on any securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate.
In the event of partial redemption by lot, the particular Securities to be
redeemed will be selected, unless otherwise provided herein, not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Securities not previously called for redemption.
The Trustee will promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed. Securities and portions
of Securities selected will be in amounts of
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$1,000 or whole multiples of $1,000; except that if all of the Securities of a
Holder are to be redeemed, the entire outstanding amount of Securities held by
such Holder, even if not a multiple of $1,000, shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
Section 3.3 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the
Obligors shall mail, or shall cause to be mailed, a notice of redemption by
first-class mail, postage prepaid, to the Trustee and to each Holder of
Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
- the aggregate principal amount of the Securities to be
redeemed;
- the Redemption Date (which shall be a Business Day);
- the redemption price;
- the name and address of the Paying Agent;
- that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
- if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers, if any, and principal
amounts of the particular Securities to be redeemed;
- that, unless the Obligors default in the deposit of the
redemption price, interest on Securities called for redemption
will cease to accrue on and after the Redemption Date;
- the Section of this Indenture pursuant to which the Securities
are being redeemed; and
- the CUSIP numbers of the Securities.
At the Obligors' request, the Trustee shall give the notice of redemption in the
Obligors' name and at the Obligors' expense, provided that the Obligors make
such request at least three Business Days prior to the date by which such notice
of redemption must be given to Holders in accordance with this Section 3.3.
Concurrently with the mailing of any such notice of redemption, the Obligors
shall issue a press release announcing such redemption, the form and content of
which shall be determined by the Obligors. A notice of redemption may not be
conditioned.
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Section 3.4 Effect of Notice of Redemption.
Once notice of redemption is given, Securities called for redemption
become due and payable on the Redemption Date and at the redemption price stated
in the notice. Upon surrender to the Paying Agent, such Securities shall be paid
at the redemption price stated in the notice. If the Redemption Date falls
during a period starting after the close of business on an interest payment
record date and ending on the opening of business on the first Business Day
after the next interest payment date, or if this interest payment date is not a
Business Day, the second Business Day after the interest payment date, then the
interest payment will be payable to the Holders who present the Securities for
redemption.
On and after the Redemption Date, unless the Obligors default in the
deposit of the redemption price, interest will cease to accrue on the Securities
or any portion of the Securities called for redemption, and all other rights of
the Holder will terminate other than the right to receive the redemption price,
without interest from the Redemption Date, on surrender of the Securities.
Section 3.5 Deposit of Redemption Price.
Prior to 11:00 a.m. (New York City time) on the Redemption Date, the
Obligors shall deposit with the Paying Agent (or the Trustee) money sufficient
to pay the redemption price on all Securities to be redeemed on that date.
Section 3.6 Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Obligors shall
execute and the Trustee shall authenticate and deliver to the Holder, without
service charge, a new Security in an authorized denomination equal in principal
amount to, and in exchange for, the unredeemed portion of the Security
surrendered.
Section 3.7 Optional Redemption.
(a) At any time prior to December 15, 2006, the Company may, on
any one or more occasions, redeem, in whole or in part, up to 35% of the
aggregate principal amount of Securities, including Additional Securities, if
any, issued under this Indenture at a redemption price of 107.0% of the
principal amount of the Securities redeemed, plus accrued and unpaid interest
and Additional Interest, if any, on the Securities redeemed to the applicable
redemption date, with the net cash proceeds of one or more Equity Offerings;
provided that;
(1) at least 65% of the aggregate principal amount of Securities,
including Additional Securities, if any, issued under this Indenture
remains outstanding immediately after the occurrence of such redemption,
excluding Securities held by the Company and its Subsidiaries; and
(2) the redemption occurs within 90 days of the date of the closing of
such Equity Offerings.
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Except pursuant to the preceding paragraph, the Securities will not be
redeemable at the Company's option prior to December 15, 2007.
(b) On or after December 15, 2007, the Company may, at its option,
redeem all or a part of the Securities upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Additional
Interest, if any, on the Securities redeemed, to the applicable redemption date,
if redeemed during the twelve-month period beginning on December 15 of the years
indicated below:
Year Percentage
---- ----------
2007 ................................................... 103.500%
2008 ................................................... 101.750%
2009 and thereafter .................................... 100.000%
(c) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Section 3.1 through 3.6 hereof.
Section 3.8 Purchase of Securities at Option of the Holder Upon Change of
Control.
(a) If at any time that Securities remain outstanding there shall
occur a Change of Control, Securities shall be purchased by the Obligors at the
option of the Holders, as of the Change of Control Purchase Date at a purchase
price equal to 101% of the principal amount of the Securities, together with
accrued and unpaid interest, including interest on any unpaid overdue interest,
compounded semi-annually, and Additional Interest, if any, to, but excluding,
the Change of Control Purchase Date (the "CHANGE OF CONTROL PURCHASE PRICE"),
subject to satisfaction by or on behalf of any Holder of the requirements set
forth in subsection (c) of this Section 3.8.
(b) Within 10 days after the occurrence of a Change of Control,
the Obligors shall mail a written notice ("OBLIGORS NOTICE") of the Change of
Control to the Trustee and to each Holder (and to beneficial owners as required
by applicable law) pursuant to which the Obligors shall make an offer (a "CHANGE
OF CONTROL OFFER") to each Holder to repurchase all or any part (equal to $1,000
or an integral multiple of $1,000) of each Holder's Securities at the Change of
Control Purchase Price. The notice shall include the form of a Change of Control
Purchase Notice to be completed by the Holder, shall describe the transaction or
transactions that constitute the Change of Control and shall state:
(i) that the Change of Control Offer is being made pursuant
to this Section 3.8 and that all Securities tendered will be accepted for
payment;
(ii) the date by which the Change of Control Purchase Notice
pursuant to this Section 3.8 must be given;
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(iii) the purchase date, which date shall be no earlier than
30 days and no later than 60 days after the date the Obligors Notice is
mailed (the "CHANGE OF CONTROL PURCHASE DATE");
(iv) the Change of Control Purchase Price;
(v) the Holder's right to require the Obligors to purchase
the Securities;
(vi) the name and address of the Paying Agent;
(vii) that, unless the Obligors default in making such
payment, any Security accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control
Purchase Date;
(viii) the procedures that the Holder must follow to exercise
rights under this Section 3.8; and
(ix) the procedures for withdrawing a Change of Control
Purchase Notice, including a form of notice of withdrawal.
If any of the Securities is in the form of a Global Security, then the
Obligors shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to the repurchase of Global Securities.
(c) A Holder may exercise its rights specified in subsection (a)
of this Section 3.8 upon delivery of a written notice (which shall be in
substantially the form included in Exhibit A hereto, as applicable, and which
may be delivered by letter, overnight courier, hand delivery, facsimile
transmission or in any other written form and, in the case of Global Securities,
may be delivered electronically or by other means in accordance with the
Depositary's customary procedures) of the exercise of such rights (a "CHANGE OF
CONTROL PURCHASE NOTICE") to any Paying Agent at any time prior to the close of
business on the Business Day next preceding the Change of Control Purchase Date.
The delivery of such Security to any Paying Agent (together with all
necessary endorsements) at the office of such Paying Agent shall be a condition
to the receipt by the Holder of the Change of Control Purchase Price therefor.
The Obligors shall purchase from the Holder thereof, pursuant to this
Section 3.8, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of the Indenture that apply
to the purchase of all of a Security pursuant to Sections 3.8 through 3.13 also
apply to the purchase of such portion of such Security.
Notwithstanding anything herein to the contrary, any Holder delivering to
a Paying Agent the Change of Control Purchase Notice contemplated by this
subsection (c) shall have the right to withdraw such Change of Control Purchase
Notice in whole or in a portion thereof that is a principal amount of $1,000 or
in an integral multiple thereof at any time prior to the close of business on
the Business Day next preceding the Change of Control Purchase Date by delivery
of a written notice of withdrawal to the Paying Agent in accordance with Section
3.9 hereof
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A Paying Agent shall promptly notify the Obligors of the receipt by it of
any Change of Control Purchase Notice or written withdrawal thereof.
Anything herein to the contrary notwithstanding, in the case of Global
Securities, any Change of Control Purchase Notice may be delivered or withdrawn
and such Securities may be surrendered or delivered for purchase in accordance
with the Applicable Procedures as in effect from time to time.
If the Change of Control Purchase Date falls after an interest payment
record date and on or before the date that is one Business Day after the next
interest payment date, then the interest payment will be payable to the Holder
who presents a Security for purchase.
(d) The Obligors will not be required to make a Change of Control
Offer upon a Change of Control if (1) a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements applicable to a Change of Control Offer made by the Obligors set
forth in subsection (b) of this Section 3.8 and purchases all Securities
properly tendered and not withdrawn under the Change of Control Offer, (2)
notice of redemption has been given pursuant to Section 3.1 or 3.7 hereof,
unless and until there is a default in payment of the applicable redemption
price, or (3) after giving effect to such Change of Control, (i) no Default or
Event of Default has occurred and is continuing, (ii) the Change of Control
transaction has been approved by the Board of Directors of the Company, and
(iii) the Securities are rated Baa3 or better by Moody's and BBB- or better by
S&P.
(e) The Obligors will publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
Section 3.9 Effect of Change of Control Purchase Notice.
Upon receipt by any Paying Agent of the Change of Control Purchase Notice
specified in Section 3.8(c) hereof, the Holder of the Security in respect of
which such Change of Control Purchase Notice was given shall (unless such Change
of Control Purchase Notice is withdrawn as specified below) thereafter be
entitled to receive the Change of Control Purchase Price with respect to such
Security. Such Change of Control Purchase Price shall be paid to such Holder
promptly following the later of (a) the Change of Control Purchase Date with
respect to such Security (provided the conditions in Section 3.8(c) hereof have
been satisfied) and (b) the time of delivery of such Security to a Paying Agent
by the Holder thereof in the manner required by Section 3.8(c) hereof.
A Change of Control Purchase Notice may be withdrawn by means of a written
notice (which may be delivered by mail, overnight courier, hand delivery,
facsimile transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance with
the Depositary's customary procedures) of withdrawal delivered by the Holder to
a Paying Agent at any time prior to the close of business on the Business Day
immediately preceding the Change of Control Purchase Date, specifying the
principal amount of the Security or portion thereof (which must be a principal
amount of $1,000 or an integral multiple of $1,000 in excess thereof) with
respect to which such notice of withdrawal is being submitted.
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Section 3.10 Deposit of Change of Control Purchase Price.
On or before 11:00 a.m. New York City time on the Change of Control
Purchase Date, the Obligors shall deposit with the Trustee or with a Paying
Agent (other than the Obligors or an Affiliate of the Obligors) an amount of
money (in immediately available funds if deposited on such Change of Control
Purchase Date) sufficient to pay the aggregate Change of Control Purchase Price
of all the Securities or portions thereof that are to be purchased as of such
Change of Control Purchase Date. The manner in which the deposit required by
this Section 3.10 is made by the Obligors shall be at the option of the
Obligors, provided that such deposit shall be made in a manner such that the
Trustee or a Paying Agent shall have immediately available funds on the Change
of Control Purchase Date.
If a Paying Agent holds, in accordance with the terms hereof, money
sufficient to pay the Change of Control Purchase Price of any Security for which
a Change of Control Purchase Notice has been tendered and not withdrawn in
accordance with this Indenture then, on the Change of Control Purchase Date,
interest will cease to accrue on such Securities or any portion of the
Securities as to which a Change of Control Purchase Notice has been tendered and
not withdrawn in accordance with this Indenture and all other rights of the
Holder will terminate other than the right to receive the Change of Control
Purchase Price, without interest from the Change of Control Purchase Date, on
surrender of the Securities.
Section 3.11 Securities Purchased in Part.
Any Security that is to be purchased only in part shall be surrendered at
the office of a Paying Agent, and promptly after the Change of Control Purchase
Date the Obligors shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security, without service charge, a new Security or
Securities, of such authorized denomination or denominations as may be requested
by such Holder, in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered that is not
purchased.
Section 3.12 Compliance With Securities Laws Upon Purchase of Securities.
In connection with any offer to purchase or purchase of Securities under
Section 3.8 hereof, the Obligors shall (a) comply with Rule 14e-1 (or any
successor to such Rule), if applicable, under the Exchange Act, and (b)
otherwise comply with all federal and state securities laws in connection with
such offer to purchase or purchase of Securities, all so as to permit the rights
of the Holders and obligations of the Obligors under Sections 3.8 through 3.11
hereof to be exercised in the time and in the manner specified therein.
Section 3.13 Repayment to the Obligors.
To the extent that the aggregate amount of cash deposited by the Obligors
pursuant to Section 3.10 hereof exceeds the aggregate Change of Control Purchase
Price (including interest and Additional Interest, if any, thereon) of the
Securities or portions thereof that the Obligors are obligated to purchase, then
promptly after the Change of Control Purchase Date the Trustee or a Paying
Agent, as the case may be, shall return any such excess cash to the Obligors.
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Section 3.14 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.14 hereof, the Company is
required to commence an offer to all Holders to purchase Securities ("ASSET SALE
OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders of Securities and all
holders of other Indebtedness that is pari passu with the Securities containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets ("PARITY
INDEBTEDNESS"). The Asset Sale Offer shall remain open for a period of at least
20 Business Days following its commencement and not more than 30 Business Days,
except to the extent that a longer period is required by applicable law (the
"OFFER PERIOD"). No later than three Business Days after the termination of the
Offer Period (the "PURCHASE DATE"), the Company shall apply a portion of the
Excess Proceeds as calculated pursuant to the Section 4.14 hereof (the "OFFER
AMOUNT") to the purchase of Securities and such other Parity Indebtedness (on a
pro rata basis, if applicable) or, if less than the Offer Amount has been
tendered, all Securities and other Parity Indebtedness tendered in response to
the Asset Sale Offer. Payment for any Securities so purchased shall be made in
the same manner as interest payments are made.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders. The notice
will contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Asset Sale Offer. The notice, which will
govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section
3.14 and Section 4.14 hereof and the length of time the Asset Sale Offer
will remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Security not tendered or accepted for payment will
continue to accrue interest and Additional Interest, if any;
(4) that, unless the Company defaults in making such payment, any
Security accepted for payment pursuant to the Asset Sale Offer shall cease
to accrue interest and Additional Interest, if any, after the Purchase
Date;
(5) that Holders electing to have a Security purchased pursuant to
an Asset Sale Offer may elect to have Securities purchased in integral
multiples of $1,000 only;
(6) that Holders electing to have a Security purchased pursuant to
any Asset Sale Offer shall be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(7) that Holders shall be entitled to withdraw their election if the
Company or the Paying Agent, as the case may be, receives, not later than
the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the
41
Holder, the principal amount of the Security the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Security purchased;
(8) that, if the aggregate principal amount of Securities and other
Parity Indebtedness surrendered in connection with the Asset Sale Offer
exceeds the Offer Amount, the Company shall select the Securities and
other Parity Indebtedness to be purchased on a pro rata basis based on the
principal amount of Securities and such other Parity Indebtedness
surrendered (with such adjustments as may be deemed appropriate by the
Company so that only Securities in denominations of $1,000, or integral
multiples thereof, will be purchased); and
(9) that Holders whose Securities were purchased only in part will
be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Securities or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Securities
tendered, and shall deliver to the Trustee an Officer's Certificate stating that
such Securities or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.14. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Securities tendered by such Holder
and accepted by the Company for purchase, and the Company shall promptly issue a
new Security, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Security to such Holder, in a
principal amount equal to any unpurchased portion of the Security surrendered.
Any Security not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results
of the Asset Sale Offer on or as soon as practicable after the Purchase Date.
Other than as specifically provided in this Section 3.14, any purchase
pursuant to this Section 3.14 shall be made pursuant to the provisions of
Sections 3.1 through 3.6 hereof.
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ARTICLE 4
COVENANTS
Section 4.1 Payment of Securities.
The Obligors shall promptly make all payments in respect of the Securities
on the dates and in the manner provided in the Securities and this Indenture. An
installment of principal, interest or Additional Interest, if any, shall be
considered paid on the date it is due if the Paying Agent (other than the
Obligors) holds by 11:00 a.m., New York City time, on that date money, deposited
by the Obligors or an Affiliate thereof, sufficient to pay the installment.
Except in the case of a redemption, a Change of Control Offer or an Asset Sale
Offer, accrued and unpaid interest or Additional Interest, if any, on any
Security that is payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid to the Person in whose name that Security is
registered at the close of business on the record date for such interest or
Additional Interest, if any, at the office or agency of the Obligors maintained
for such purpose. The Obligors shall, (in immediately available funds) to the
fullest extent permitted by law, pay interest on overdue principal (including
premium, if any) and overdue installments of interest from the original due date
to the date paid, at the rate applicable to the Security plus 1% per annum,
which interest shall be payable on demand. Additional Interest, if any, shall
accrue at the rates provided for in the Registration Rights Agreement and shall
be paid at the same time and in the same manner as regular interest.
Payment of the principal of, premium, if any, and interest (including
Additional Interest, if any) on the Securities shall be made at the office or
agency of the Paying Agent and Registrar within the City and State of New York
in immediately available funds in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided that the Obligors may elect to make payment of interest
or Additional Interest, if any, by check mailed to the address of the Person
entitled thereto as such address appears in the Register. Payment of the
principal of, premium, if any, and interest (including Additional Interest, if
any) on the Securities held by a Holder holding an aggregate principal amount of
Securities in excess of $1,000,000 shall be made by wire transfer in immediately
available funds to an account maintained by such Holder in the United States, if
such Holder has provided wire transfer instructions to the Obligors at least 10
Business Days prior to the payment date. Any wire transfer instructions received
by the Trustee will remain in effect until revoked by the Holder.
Section 4.2 Maintenance of Office or Agency.
(a) The Obligors shall maintain in the Borough of Manhattan, The
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co registrar) where Securities may be
surrendered for payment, registration of transfer or for exchange and where
notices and demands to or upon the Obligors in respect of the Securities and
this Indenture may be served. The Obligors shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any
43
time the Obligors shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
(b) The Obligors may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Obligors of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York for such purposes. The
Obligors shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
(c) The Obligors hereby designate the Corporate Trust Office of
the Trustee as one such office or agency of the Obligors in accordance with
Section 2.3 hereof.
Section 4.3 Reports.
(a) Whether or not required by the SEC's rules and regulations, so
long as any Securities are outstanding, the Company shall furnish (to the extent
not publicly available on the SEC's XXXXX system) to the Holders of Securities,
within the time periods specified in the SEC's rules and regulations:
(i) all quarterly and annual reports that would be required
to be filed with the SEC on Forms 10-Q and 10-K if the Company were
required to file such reports; and
(ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such
reports.
All such reports shall be prepared in all material respects in accordance
with all of the rules and regulations applicable to such reports. Each annual
report on Form 10-K shall include a report on the Company's consolidated
financial statements by the Company's certified independent accountants. In
addition, the Company shall file a copy of each of the reports referred to in
clauses (i) and (ii) above with the SEC for public availability within the time
periods specified in the rules and regulations applicable to such reports
(unless the SEC will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request.
(b) If, at any time, the Company is no longer subject to the
periodic reporting requirements of the Exchange Act for any reason, the Company
shall nevertheless continue filing the reports specified in Section 4.3(a)
hereof with the SEC within the time periods specified above unless the SEC will
not accept such a filing. The Company agrees that it shall not take any action
for the purpose of causing the SEC not to accept any such filings. If,
notwithstanding the foregoing, the SEC will not accept the Company's filings for
any reason, the Company shall post the reports referred to in Section 4.3(a)
hereof on its website within the time periods that would apply if the Company
were required to file those reports with the SEC.
44
(c) The Company further agrees that, for so long as any Securities
remain outstanding, at any time it is not required to file the reports required
by Section 4.3(a) or (b) hereof with the SEC, it shall furnish to the Holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(d) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries (other than ICN Yugoslavia DD), then the quarterly and
annual financial information required by Section 4.3 (a), (b) and (c) hereof
shall include a reasonably detailed presentation, either on the face of the
financial statements or in the footnotes thereto, and in Management's Discussion
and Analysis of Financial Condition and Results of Operations, of the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.
Section 4.4 Compliance Certificates.
The Obligors shall deliver to the Trustee, within 90 days after the end of
each fiscal year of the Obligors (beginning with the fiscal year ending December
31, 2003), an Officers' Certificate as to the signer's knowledge of the
Obligors' compliance with all conditions and covenants on their part contained
in this Indenture and stating whether or not the signer knows of any Default or
Event of Default. If such signer knows of such a Default or Event of Default,
the Officers' Certificate shall describe the Default or Event of Default and the
efforts to remedy the same. For the purposes of this Section 4.4, compliance
shall be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
Section 4.5 Further Instruments and Acts.
Upon request of the Trustee, the Obligors will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
Section 4.6 Maintenance of Corporate Existence.
Subject to Article 5 hereof, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate existence of each Restricted Subsidiary; provided,
however, that the Company shall not be required to preserve the corporate
existence of any Restricted Subsidiary if (a) the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and the Restricted Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Securities or (b) if a Subsidiary is to be
dissolved, such Subsidiary has no assets.
Section 4.7 Changes in Covenants when Securities Rated Investment Grade.
If on any date following the date of this Indenture:
45
(a) the Securities are rated Baa3 or better by Moody's and BBB- or
better by S&P; and
(b) no Default or Event of Default shall have occurred and be
continuing,
then, beginning on that day and continuing at all times thereafter regardless of
any subsequent changes in the rating of the Securities, the provisions of
Sections 4.8, 4.9, 4.10, 4.12, 4.13, 4.14 hereof and clause (iv) of Section
5.1(a) hereof will no longer be applicable to the Securities.
Section 4.8 Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect holders
of the Company's or any of its Restricted Subsidiaries' Equity Interests
in their capacity as such (other than dividends or distributions payable
in Equity Interests (other than Disqualified Stock) of the Company or to
the Company or a Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company
or any direct or indirect parent of the Company;
(iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness
that is subordinated to the Securities, except (i) payments of interest
thereon, (ii) payments of principal at the Stated Maturity thereof and
(iii) any payment on or with respect to the 6-1/2% Notes; or
(iv) make any Restricted Investment;
(all such payments and other actions set forth in these clauses (i) through (iv)
above being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the
time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.9(a) hereof and
46
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of the indenture (excluding
Restricted Payments permitted by clauses (ii) through (vi) of Section
4.8(b) hereof), is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the beginning
of the first fiscal quarter commencing after the date of this
Indenture to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus
(B) 100% of the aggregate net cash proceeds received
by the Company since the date of this Indenture as a contribution to
its common equity capital or from the issue or sale of Equity
Interests of the Company (other than Disqualified Stock) or from the
issue or sale of convertible or exchangeable Disqualified Stock or
convertible or exchangeable debt securities of the Company that have
been converted into or exchanged for such Equity Interests (other
than Equity Interests (or Disqualified Stock or debt securities)
sold to a Subsidiary of the Company), plus
(C) to the extent that any Restricted Investment that
was made after the date of the indenture is sold for cash or
otherwise liquidated or repaid for cash, the lesser of (i) the cash
return of capital with respect to such Restricted Investment (less
the cost of disposition, if any) or (ii) the initial amount of such
Restricted Investment, plus
(D) to the extent that any Unrestricted Subsidiary of
the Company is redesignated as a Restricted Subsidiary after the
date of this Indenture, the lesser of (i) the Fair Market Value of
the Company's Investment in such Subsidiary as of the date of such
redesignation or (ii) such Fair Market Value as of the date on which
such Subsidiary was originally designated as an Unrestricted
Subsidiary.
(b) So long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, the preceding provisions shall not
prohibit:
(i) the payment of any dividend within 60 days after the
date of declaration of the dividend, if at the date of declaration the
dividend payment would have complied with the provisions of this
Indenture;
(ii) the declaration and payment of the Current Dividend;
provided, that at the time of declaration of such dividend the Company is
able to incur at least an additional $1.00 of Indebtedness pursuant to
Section 4.9(a) hereof; provided further, that if in any successive
quarterly period after the date of this Indenture the Company does not
declare and pay the Current Dividend, the Company shall no longer be
permitted to pay any future Current Dividend under this clause (ii);
47
(iii) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of the Company or the
Co-Obligor or of any Equity Interests of the Company in exchange for, or
out of the net cash proceeds of the substantially concurrent sale (other
than to a Restricted Subsidiary of the Company) of, Equity Interests of
the Company (other than Disqualified Stock); provided that the amount of
any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition will be excluded
from clause (3)(B) of Section 4.8(a) hereof;
(iv) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company or the Co-Obligor
with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness;
(v) the payment of any dividend by a Restricted Subsidiary
of the Company to the holders of its Equity Interests on a pro rata basis;
(vi) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by any employee of the Company
or any of its Restricted Subsidiaries pursuant to any equity subscription
agreement, stock option agreement or similar agreement; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests may not exceed an aggregate of $5.0 million since
the date of this Indenture; and
(vii) other Restricted Payments in an aggregate amount not to
exceed $20.0 million since the date of this Indenture.
(c) The amount of all Restricted Payments (other than cash) shall
be the Fair Market Value (determined, for purposes of this covenant, by the
Company or, in the case of any asset(s) valued in excess of $10 million, by the
Board of Directors of the Company, in each case evidenced by an Officers'
Certificate delivered to the Trustee) on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued by the Company
or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The Board of Directors' determination shall be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if the Fair Market Value exceeds $25.0 million. Not later than
the date of making any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.8 were computed, together with a copy of any fairness opinion or
appraisal required by this subsection (c).
Section 4.9 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise (collectively, "INCUR"), with respect to any
Indebtedness (including Acquired Debt), and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted Subsidiaries to
issue any Disqualified Stock or
48
preferred stock; provided, however, that the Company may incur Indebtedness
(including Acquired Debt) or issue Disqualified Stock if the Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.0 to 1, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
(b) Subsection (a) of this Section 4.9 shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"PERMITTED DEBT"):
(i) the incurrence by the Company of Indebtedness and
letters of credit under Credit Facilities in an aggregate principal amount
at any one time outstanding under this clause (i) (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company and its Restricted Subsidiaries thereunder) not
to exceed the greater of (x) $150.0 million less the aggregate amount of
all Net Proceeds of Asset Sales applied by the Company or any of its
Restricted Subsidiaries since the date of this Indenture to repay any term
Indebtedness under a Credit Facility or to repay any Indebtedness under a
Credit Facility and effect a corresponding commitment reduction thereunder
pursuant to Section 4.14 hereof and (y) the amount of the Borrowing Base
as of the date of such incurrence;
(ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company and the Co-Obligor of
Indebtedness represented by the Securities to be issued on the date of
this Indenture and the Exchange Securities to be issued pursuant to the
Registration Rights Agreement and Guarantees thereof, if any, by Domestic
Subsidiaries of the Company;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (iv), not to exceed $25.0 million at any time
outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted by
this Indenture to be incurred under Section 4.9(a) hereof or clauses (ii),
(iii), (iv), (v), (xi) or (xii) of this Section 4.9(b);
49
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or the Co-Obligor is the obligor on
such Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Securities; and
(B) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary of the Company and (ii)
any sale or other transfer of any such Indebtedness to a Person that is
not either the Company or a Restricted Subsidiary of the Company shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
the Company or such Restricted Subsidiary, as the case may be, that was
not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the ordinary
course of business and not for speculative purposes;
(viii) the Guarantee by the Company or the Co-Obligor of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred under this Section 4.9; provided that if the
Indebtedness being guaranteed is subordinated to or pari passu with the
Securities, then the Guarantee shall be subordinated to the same extent as
the Indebtedness guaranteed;
(ix) the accrual of interest, the accretion or amortization
of original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the payment
of dividends on Disqualified Stock in the form of additional shares of the
same class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this
covenant; provided, in each such case, that the amount thereof is included
in Fixed Charges of the Company as accrued;
(x) Obligations in respect of performance and surety bonds
and completion guarantees provided by the Company or any Restricted
Subsidiary in an aggregate principal amount at any time outstanding not to
exceed $25.0 million;
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Acquired Debt in an aggregate principal amount at any time
outstanding not to exceed $25.0 million;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (xii), not to
exceed $25.0 million; and
50
(xiii) the Guarantee by Domestic Subsidiaries of the Company
of Indebtedness of the Company permitted to be incurred under another
provision of this Section 4.9.
(c) The Company shall not incur any Indebtedness (including
Permitted Debt) that is contractually subordinated in right of payment to any
other Indebtedness of the Company unless such Indebtedness is also contractually
subordinated in right of payment to the Securities on substantially identical
terms; provided, however, that no Indebtedness of the Company shall be deemed to
be contractually subordinated in right of payment to any other Indebtedness of
the Company solely by virtue of being unsecured.
(d) For purposes of determining compliance with this Section 4.9,
in the event that an item of proposed Indebtedness meets the criteria of more
than one of the categories of Permitted Debt described in clauses (i) through
(xii) of Section 4.9(b) hereof, or is entitled to be incurred pursuant to
subsection (a) of this Section 4.9, the Company shall be permitted to classify
such item of Indebtedness on the date of its incurrence, or later reclassify all
or a portion of such item of Indebtedness, in any manner that complies with this
Section 4.9. Indebtedness under Credit Facilities outstanding on the date on
which Securities are first issued and authenticated under this Indenture will be
deemed to have been incurred on such date in reliance on the exception provided
by clause (i) of Section 4.9(b) hereof.
Section 4.10 Sale and Leaseback Transactions.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, enter into any sale and leaseback transaction (other
than a sale leaseback transaction involving a lease, including any renewal
period, optional or otherwise, not in excess of 24 months); provided that the
Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:
(i) the Company or that Restricted Subsidiary, as
applicable, could have (x) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction under
the Fixed Charge Coverage Ratio test in Section 4.9(a) hereof, and (y)
incurred a Lien to secure such Indebtedness pursuant to Section 4.11
hereof;
(ii) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the Fair Market Value, as determined in
good faith by the Company, or, in the case of a sale leaseback transaction
in excess of $10 million, the Board of Directors of the Company, in each
case set forth in an Officers' Certificate delivered to the Trustee, of
the property that is the subject of that sale and leaseback transaction;
and
(iii) the transfer of assets in that sale and leaseback
transaction is permitted by, and the Company applies the proceeds of such
transaction in compliance with, Section 4.14 hereof.
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Section 4.11 Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind on any asset now owned or hereafter acquired, except
Permitted Liens.
Section 4.12 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by,
its profits, or pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(iii) transfer any of its properties or assets to the Company
or any of its Restricted Subsidiaries.
(b) The restrictions set forth in Section 4.12(a) hereof shall not
apply to encumbrances or restrictions existing under or by reason of:
(i) agreements governing Existing Indebtedness as in effect
on the date of this Indenture and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements
or refinancings of those agreements, provided that the amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive, taken as a whole,
with respect to such dividend and other payment restrictions than those
contained in those agreements on the date of this Indenture;
(ii) this Indenture and the Securities;
(iii) any encumbrance or restriction pursuant to Credit
Facilities incurred under clause (i) of Section 4.9(b) hereof;
(iv) applicable law, rule, regulation or order, approval,
license, permit or similar restriction, including under contracts with
foreign governments or agencies thereof entered into in the ordinary
course of business;
(v) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred, or such Capital Stock was issued, in connection
with or in contemplation of such acquisition),
52
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted to be incurred under Section
4.9 hereof;
(vi) customary non-assignment provisions in leases, contracts
and licenses entered into in the ordinary course of business and
consistent with past practices;
(vii) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on that property of
the nature described in clause (iii) of Section 4.12(a) hereof;
(viii) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(ix) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(x) Permitted Liens securing Indebtedness that limit the
right of the debtor to dispose of the assets subject to such Liens;
(xi) customary provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, assets
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business; and
(xii) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course
of business.
Section 4.13 Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each, an "AFFILIATE TRANSACTION"), unless:
(i) the Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Trustee:
53
(A) respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $10.0 million, a resolution of the Board of Directors of
the Company set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with this Section 4.13(a) and
that such Affiliate Transaction has been approved by a majority of
the disinterested members of the Board of Directors of the Company;
and
(B) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $25.0 million, an opinion as to the
fairness to the Company or such Restricted Subsidiary of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national
standing.
(b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of Section
4.13(a) hereof:
(i) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted
Subsidiary;
(ii) transactions between or among the Company and/or its
Restricted Subsidiaries;
(iii) transactions with a Person that is an Affiliate of the
Company solely because the Company owns, directly or through a Restricted
Subsidiary, an Equity Interest in, or controls, such Person;
(iv) payment of reasonable directors' fees to Persons who are
not otherwise Affiliates of the Company;
(v) issuances or sales of Equity Interests (other than
Disqualified Stock) of the Company to Affiliates of the Company;
(vi) Restricted Payments that are permitted by the provisions
of Section 4.8 hereof;
(vii) transactions effected pursuant to agreements in effect
on the date of this Indenture and any amendment, modification, or
replacement to such agreement (so long as the amendment, modification or
replacement is not disadvantageous to the Holders of the Securities in any
respect);
(viii) advances to employees in the ordinary course of
business not to exceed $1.0 million in the aggregate at any one time
outstanding; and
(ix) transactions with a Permitted Joint Venture.
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Section 4.14 Asset Sales.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or the Restricted Subsidiary, as the case
may be) receives consideration at the time of the Asset Sale at least
equal to the Fair Market Value (determined, for purposes of this clause
(i), by the Company or, in the case of any asset(s) valued in excess of
$10 million, by the Board of Directors of the Company, in each case
evidenced by an Officers' Certificate delivered to the Trustee) of the
assets or Equity Interests issued or sold or otherwise disposed of; and
(ii) at least 75% of the consideration received in the Asset
Sale by the Company or such Restricted Subsidiary is in the form of cash
or Cash Equivalents. For purposes of this provision, each of the following
will be deemed to be cash:
(A) any liabilities, as shown on the Company's most
recent consolidated balance sheet, of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by
their terms subordinated to the Securities) that are assumed by the
transferee of any such assets pursuant to a customary novation agreement
that releases the Company or such Restricted Subsidiary from further
liability; and
(B) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such
transferee that are contemporaneously, subject to ordinary settlement
periods, converted by the Company or such Restricted Subsidiary into cash,
to the extent of the cash received in that conversion.
(b) Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply those Net Proceeds:
(i) to repay Indebtedness and other Obligations under a
Credit Facility and, if the Indebtedness repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect thereto;
(ii) to acquire all or substantially all of the assets of, or
a majority of the Voting Stock of, another Permitted Business;
(iii) to make a capital expenditure in or that is useful in a
Permitted Business;
(iv) to retire Securities pursuant to privately negotiated
transactions, open market purchases or otherwise; or
(v) to acquire other assets that are not classified as
current assets (for the avoidance of doubt, including acquisitions of
in-process research and development) under GAAP and that are used or
useful in a Permitted Business.
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Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied or
invested as provided in Section 4.14(b) hereof shall constitute "EXCESS
PROCEEDS." When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company shall make an offer (an "ASSET SALE OFFER") to all Holders of
Securities and all holders of Parity Indebtedness to purchase the maximum
principal amount of Securities and such other Parity Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
shall be equal to 100% of principal amount plus accrued and unpaid interest and
Additional Interest, if any, to the date of purchase, and shall be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use those Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Securities
and other Parity Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Company shall select the Securities and such
other Parity Indebtedness to be purchased on a pro rata basis. Upon completion
of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(d) The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with each
repurchase of Securities pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
compliance.
Section 4.15 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary designated as
an Unrestricted Subsidiary shall be deemed to be an Investment made as of the
time of the designation and will reduce the amount available for Restricted
Payments under Section 4.8(a) hereof or under one or more of the clauses of the
definition of Permitted Investments, as determined by the Company. That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
Section 4.16 Business Activities.
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Restricted Subsidiaries taken as a
whole.
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Section 4.17 Payments for Consent.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid and is paid to all Holders of the Securities that consent, waive or agree
to amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.
Section 4.18 Stay, Extension and Usury Laws.
The Obligors covenant (to the extent that they may lawfully do so) that
they shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other
law which would prohibit or forgive the Obligors from paying all or any portion
of the principal of, premium, if any, interest or Additional Interest, if any,
on the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture, and the Obligors (to the extent they may lawfully do so) hereby
expressly waive all benefit or advantage of any such law and covenant that they
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 4.19 Payment of Additional Interest.
If Additional Interest is payable by the Obligors pursuant to the
Registration Rights Agreement, the Obligors shall deliver to the Trustee a
certificate to that effect stating (i) the amount of such Additional Interest
that is payable, (ii) the reason why such Additional Interest is payable and
(iii) the date on which such Additional Interest is payable. Unless and until a
Trust Officer of the Trustee receives such a certificate, the Trustee may assume
without inquiry that no such Additional Interest is payable.
Section 4.20 Notice of Default.
In the event that any Default or Event of Default under Section 6.1 hereof
shall occur, the Obligors shall give prompt written notice of such Default or
Event of Default to the Trustee.
ARTICLE 5
MERGER, CONSOLIDATION OR SALE OF ASSETS
Section 5.1 Merger, Consolidation or Sale of Assets.
(a) The Company shall not, directly or indirectly, consolidate or
merge with or into another Person (whether or not the Company is the surviving
corporation) or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person, unless:
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(i) either: (x) the Company is the surviving corporation; or
(y) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer,
conveyance or other disposition has been made is organized and validly
existing under the laws of the United States, any state of the United
States or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of, (premium, if any), interest and Additional Interest, if any,
on all the Securities and the performance or observance of every covenant
of this Indenture on the part of the Obligors to be performed or observed;
(ii) the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made
assumes all the obligations of the Company under the Securities, this
Indenture and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;
(iii) immediately after such transaction, no Default or Event
of Default exists;
(iv) the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition has been made
shall, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had occurred
at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.9(a) hereof; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture complies with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
(b) The Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person.
Section 5.2 Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or
substantially all of the properties and assets of the Company in accordance with
Section 5.1 hereof, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the
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predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE 6
DEFAULT AND REMEDIES
Section 6.1 Events of Default.
An "EVENT OF DEFAULT" shall occur if:
(a) the Obligors default in the payment of any principal of
(including, without limitation, any premium, if any, on) any Security when the
same becomes due and payable (whether at maturity, upon a Redemption Date,
Change of Control Purchase Date, Purchase Date or otherwise);
(b) the Obligors default in the payment of any interest or
Additional Interest, if any, payable on any Security when the same becomes due
and payable and the default continues for a period of 30 days;
(c) the Company or any of its Restricted Subsidiaries fails to
comply with any of the provisions of Sections 3.8, 4.8, 4.9, 4.14 and 5.1 of
this Indenture;
(d) the Company or any of its Restricted Subsidiaries fails to
comply with any of the other covenants contained in the Securities or this
Indenture and the default continues for 60 days after notice to the Company from
the Trustee or the Holders of at least 25% in aggregate principal amount of
Securities then outstanding;
(e) the Company or any of its Restricted Subsidiaries default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of this
Indenture, if that default:
(i) is caused by a failure to pay principal of, or interest
or premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default (a
"PAYMENT DEFAULT"); or
(ii) results in the acceleration of such Indebtedness prior
to its express maturity,
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so
accelerated, aggregates $10.0 million or more;
59
(f) the Company or any of its Restricted Subsidiaries fails to pay
final non-appealable judgments aggregating in excess of $10.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days;
(g) the Company, any Subsidiary that is a Significant Subsidiary
or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company, any Subsidiary that
is a Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary in an involuntary case
or proceeding;
(ii) appoints a Custodian of the Company, any Subsidiary that
is a Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company, any Subsidiary that is a
Significant Subsidiary or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company, any Subsidiary
that is a Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary;
and in each case the order or decree described in this clause (h) remains
unstayed and in effect for 60 consecutive days.
Any notice given pursuant to Section 6.1(d) hereof must be in writing and
must specify the Default, demand that it be remedied and state that the notice
is a "NOTICE OF DEFAULT." When any Default under this Section 6.1 is cured, it
ceases.
The Trustee shall not be charged with knowledge of any Default or Event of
Default unless written notice thereof shall have been given to a Trust Officer
at the Corporate Trust Office of the Trustee by the Obligors, a Paying Agent,
any Holder or any agent of any Holder.
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Section 6.2 Acceleration.
If an Event of Default (other than an Event of Default specified in clause
(g) or (h) of Section 6.1 hereof) occurs and is continuing, the Trustee may, by
notice to the Obligors, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding may, by notice to the Obligors and the
Trustee, declare all unpaid principal to the date of acceleration on the
Securities then outstanding (if not then due and payable) to be due and payable
upon any such declaration, and the same shall become and be immediately due and
payable. If an Event of Default specified in clause (g) or (h) of Section 6.1
hereof occurs, all unpaid principal (including, without limitation, any premium,
in any), and accrued interest and additional amounts, if any on the Securities
then outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
The Holders of a majority in aggregate principal amount of the Securities then
outstanding by notice to the Trustee may rescind an acceleration and its
consequences if (a) all existing Events of Default, other than the nonpayment of
the principal of the Securities which has become due solely by such declaration
of acceleration, have been cured or waived; (b) to the extent the payment of
such interest is lawful, interest at a rate of 1% per annum over the amount of
interest otherwise payable on such Security on overdue installments of interest
and Additional Interest, if any, and overdue principal, which has become due
otherwise than by such declaration of acceleration, has been paid; (c) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and (d) all payments due to the Trustee and any
predecessor Trustee under Section 7.7 hereof have been made. No such rescission
shall affect any subsequent default or impair any right consequent thereto.
If an Event of Default occurs on or after December 15, 2007, by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company in bad faith with the intention of avoiding payment of the premium that
the Company would have had to pay if the Company then had elected to redeem the
Securities pursuant to Section 3.7 hereof, then, upon acceleration of the
Securities, an equivalent premium shall also become and be immediately due and
payable, to the extent permitted by law, anything in this Indenture or in the
Securities to the contrary notwithstanding. If an Event of Default occurs prior
to December 15, 2007, by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company in bad faith with the intention of
avoiding the prohibition on redemption of the Securities prior to December 15,
2007, then, upon acceleration of the Securities, an additional premium shall
also become and be immediately due and payable in an amount, for each of the
years beginning on each of the years set forth below, as set forth below
(expressed as a percentage of the aggregate principal amount to the date of
payment that would otherwise be due but for the provisions of this sentence):
Year Percentage
---- ----------
2004................................................. 107.000%
2005................................................. 105.833%
2006................................................. 104.666%
2007................................................. 103.500%
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Section 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may, but
shall not be obligated to, pursue any available remedy by proceeding at law or
in equity to collect the payment of the principal of or interest or Additional
Interest, if any, on the Securities or to enforce the performance of any
provision of such Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.4 Waiver of Defaults and Events of Default.
Subject to Sections 6.7 and 9.2 hereof, the Holders of a majority in
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may waive an existing Default or Event of Default and its consequence,
except a Default or Event of Default in the payment of the principal of,
premium, if any, or interest or Additional Interest, if any, on any Security
when due or any Default or Event of Default in respect of any provision of this
Indenture or the Securities which, under Section 9.2 hereof, cannot be modified
or amended without the consent of the Holder of each Security affected. When a
Default or Event of Default is waived, it is cured and ceases.
Section 6.5 Control by Majority.
The Holders of a majority in principal amount of all Securities then
outstanding may direct the time, method and place of conducting any proceeding
for exercising any remedy or power available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that the Trustee determines
may be unduly prejudicial to the rights of another Holder or the Trustee, or
that may involve the Trustee in personal liability unless the Trustee is offered
indemnity satisfactory to it; provided, however, that the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction.
Section 6.6 Limitations on Suits.
A Holder may not pursue any remedy with respect to this Indenture or the
Securities (except actions for payment of overdue principal, premium, if any, or
interest or Additional Interest, if any) unless:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of
the then outstanding Securities make a written request to the Trustee to pursue
the remedy;
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(c) such Holder or Holders offer to the Trustee reasonable
indemnity to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Securities.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
Section 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of the principal of, interest and
Additional Interest, if any, on the Security, on or after the respective due
dates expressed in the Security and this Indenture and to bring suit for the
enforcement of any such payment on or after such respective dates, is absolute
and unconditional and shall not be impaired or affected without the consent of
the Holder.
Section 6.8 Collection Suit by Trustee.
If an Event of Default in the payment of principal, interest or Additional
Interest, if any, specified in clause (a) or (b) of Section 6.1 hereof occurs
and is continuing with respect to any Securities, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Obligors
or another obligor on the Securities for the whole amount of principal and
accrued interest or Additional Interest, if any, remaining unpaid, together
with, to the extent that payment of such interest is lawful, interest on overdue
principal and overdue installments of interest or Additional Interest, if any,
in each case at a rate equal to the interest rate then in effect on such
Security plus 1% per annum and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.9 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders allowed in
any judicial proceedings relative to the Obligors (or any other obligor on the
Securities), its creditors or its property and shall be entitled and empowered
to collect and receive any money or other property payable or deliverable on any
such claims and to distribute the same, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof, and to the extent that such payment of the reasonable
compensation, expenses, disbursements and advances
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in any such proceedings shall be denied for any reason, payment of the same
shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other property which the Holders
may be entitled to receive in such proceedings, whether in liquidation or under
any plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to, or, on
behalf of any Holder, to authorize, accept or adopt any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of
any Holder thereof, or to authorize the Trustee to vote in respect of the claim
of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First, to the Trustee for amounts due under Section 7.7 hereof;
Second, to Holders for amounts due and unpaid on the Securities for
principal, interest and Additional Interest, if any, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Securities for principal, interest and Additional Interest, if any,
respectively; and
Third, the balance, if any, to the Obligors.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit made by the Trustee, a suit
by a Holder pursuant to Section 6.7 hereof, or a suit by Holders of more than
10% in aggregate principal amount of the Securities then outstanding.
ARTICLE 7
TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
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(b) Except during the continuance of an Event of Default:
(A) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no others; and
(B) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. The Trustee, however, shall examine any certificates and
opinions which by any provision hereof are specifically required to be
delivered to the Trustee to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except (subject to the TIA) that:
(A) this paragraph does not limit the effect of
subsection (b) of this Section 7.1;
(B) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(C) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers unless the Trustee shall have received satisfactory indemnity
in its opinion against potential costs and liabilities incurred by it relating
thereto.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to subsections (a), (b), (c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Obligors.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.2 Rights of Trustee.
Subject to Section 7.1 hereof:
(a) The Trustee may rely conclusively on any document believed by
it to be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
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(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which shall conform
to Section 11.4(b) hereof. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such Officers' Certificate
or Opinion of Counsel.
(c) The Trustee may act through its agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection in respect of any such action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.
(g) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Obligors, personally or by agent
or attorney at the sole cost of the Obligors and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.
(h) The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office, and such notice
references the Securities and this Indenture.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
Section 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Obligors or an
Affiliate of the Obligors with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 7.10 and 7.11 hereof.
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Section 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Obligors' use
of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its certificate of authentication.
Section 7.5 Notice of Default or Events of Default.
If a default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Securityholder notice of
the Default or Event of Default within 90 days after it occurs. However, the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding notice is in the interests of
Securityholders, except in the case of a Default or an Event of Default in
payment of the principal (including premium, if any) of, interest or Additional
Interest, if any, on any Security.
Section 7.6 Reports by Trustee to Holders.
If such report is required by TIA Section 313, within 60 days after each
May 15, beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Holder a brief report dated as of such May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b)(2) and (c).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Obligors and filed with the SEC and each stock exchange, if any,
on which the Securities are listed. The Obligors shall notify the Trustee
whenever the Securities become listed on any stock exchange or listed or
admitted to trading on any quotation system and any changes in the stock
exchanges or quotation systems on which the Securities are listed or admitted to
trading and of any delisting thereof.
Section 7.7 Compensation and Indemnity.
The Obligors shall pay to the Trustee from time to time such compensation
(as agreed to from time to time by the Obligors and the Trustee in writing) for
its services (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust). The Obligors shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it. Such expenses may include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Obligors shall indemnify the Trustee or any predecessor Trustee (which
for purposes of this Section 7.7 shall include its officers, directors,
employees and agents) for, and hold it harmless against, any and all loss,
liability or expense including taxes (other than taxes based upon, measured by
or determined by the income of the Trustee), (including reasonable legal fees
and expenses) incurred by it in connection with the acceptance or administration
of its duties under this Indenture or any action or failure to act as authorized
or within the discretion or rights or powers conferred upon the Trustee
hereunder including the reasonable costs and expenses of the Trustee and its
counsel in defending itself against any claim or liability in connection with
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the exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Obligors promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Obligors need not pay for any
settlement effected without its prior written consent, which shall not be
unreasonably withheld.
The Obligors need not reimburse the Trustee for any expense or indemnify
it against any loss or liability incurred by it resulting from its gross
negligence or bad faith.
To secure the Obligors' payment obligations in this Section 7.7, the
Trustee shall have a senior claim to which the Securities are hereby made
subordinate on all money or property held or collected by the Trustee, except
such money or property held in trust to pay the principal of, interest and
Additional Interest, if any, on the Securities. The obligations of the Obligors
under this Section 7.7 shall survive the satisfaction and discharge of this
Indenture or the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (g) or (h) of Section 6.1 hereof occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law to the extent permitted by
law. The provisions of this Section shall survive the termination of this
Indenture.
Section 7.8 Replacement of Trustee.
The Trustee may resign by so notifying the Obligors. The Holders of a
majority in aggregate principal amount of the Securities then outstanding may
remove the Trustee by so notifying the Trustee and may, with the Obligors'
written consent, appoint a successor Trustee. The Obligors may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of the Trustee for any reason, the Obligors shall promptly appoint a successor
Trustee. The resignation or removal of a Trustee shall not be effective until a
successor Trustee shall have delivered the written acceptance of its appointment
as described below.
If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Obligors or
the Holders of 10% in principal amount of the Securities then outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee at the expense of the Obligors.
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If the Trustee fails to comply with Section 7.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Obligors. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee and be released from its obligations (exclusive of any
liabilities that the retiring Trustee may have incurred while acting as Trustee)
hereunder, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.
A retiring Trustee shall not be liable for the acts or omissions of any
successor Trustee after its succession.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Obligors' obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust assets (including the
administration of this Indenture) to, another corporation, the resulting,
surviving or transferee corporation, without any further act, shall be the
successor Trustee, provided such transferee corporation shall qualify and be
eligible under Section 7.10 hereof. Such successor Trustee shall promptly mail
notice of its succession to the Obligors and each Holder.
Section 7.10 Eligibility; Disqualification.
The Trustee shall always satisfy the requirements of paragraphs (1), (2)
and (5) of TIA Section 310(a). The Trustee (or its parent holding company) shall
have a combined capital and surplus of at least $50,000,000. If at any time the
Trustee shall cease to satisfy any such requirements, it shall resign
immediately in the manner and with the effect specified in this Article 7. The
Trustee shall be subject to the provisions of TIA Section 310(b). Nothing herein
shall prevent the Trustee from filing with the SEC the application referred to
in the penultimate paragraph of TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Obligors.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE 8
DEFEASANCE; SATISFACTION AND DISCHARGE OF INDENTURE; RELEASE OF RIBAPHARM
Section 8.1 Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for and except as further provided below),
and the Trustee, on demand of and at the expense of the Obligors, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when
(a) either
(i) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.7 hereof and
(ii) Securities for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Obligors as provided in Section 8.5
hereof) have been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the
Trustee for cancellation are within one year of the maturity date and the
Obligors have irrevocably deposited or caused to be irrevocably deposited
cash with the Trustee or a Paying Agent (other than the Obligors or any of
their Affiliates) as trust funds in trust for the purpose of and in an
amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest (including Additional Interest, if any) to the date
of such deposit (in the case of Securities which have become due and
payable);
(b) the Obligors have paid or caused to be paid all other sums
payable hereunder by the Obligors; and
(c) the Obligors have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Obligors to the Trustee under Section 7.7 hereof shall
survive and, if money shall have been deposited with the Trustee pursuant to
subclause (ii) of clause (a) of this Section, the provisions of Sections 2.3,
2.4, 2.5, 2.6, 2.7, 2.12, Section 4.2, Section 4.3, Section 7.8 this Article 8
and Section 11.5, shall survive until the Securities have been paid in full.
Section 8.2 Legal Defeasance.
The Obligors shall be deemed to have paid and will be discharged from any
and all obligations in respect of this Indenture and the Securities on the date
of the deposit referred to in clause (a) of this Section 8.2, and the provisions
of this Indenture shall no longer be in effect
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with respect to the Securities ("LEGAL DEFEASANCE"), and the Trustee, at the
expense of the Obligors, shall execute proper instruments acknowledging the
same, except for the following provisions, which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of outstanding
Securities to receive solely from the trust fund described in clause (a) below
payments in respect of the principal of, premium, if any, and interest on such
Securities when such payments are due, (ii) the Obligors' obligations with
respect to such Securities under Article 2 and Section 4.3 hereof, (iii) the
rights, powers, trusts, duties, indemnities and immunities of the Trustee
hereunder, including, without limitation, Section 7.7 hereof and the Obligors'
obligations in connection therewith and (iv) this Section 8.2. Subject to
compliance with this Section 8.2, the Obligors may exercise their option under
this Section 8.2 notwithstanding the prior exercise of their option under
Section 8.3 hereof. The following conditions shall apply to Legal Defeasance:
(a) the Obligors shall have irrevocably deposited with the
Trustee, in trust, for the benefit of the Holders cash in U.S. dollars, U.S.
Government Obligations, or a combination thereof, in such amounts as shall be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the
Securities at the Stated Maturity thereof or on the applicable Redemption Date,
as the case may be and the Obligors must specify whether the Securities are
being defeased to their Stated Maturity or to a particular Redemption Date;
(b) the Obligors shall have delivered to the Trustee an Opinion of
Counsel (based on a ruling published by the United States Internal Revenue
Service or other change in the applicable U.S. federal income tax law) in the
United States reasonably acceptable to the Trustee to the effect that the
Holders will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such deposit and Legal Defeasance and will be subject to
U.S. federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such deposit and Legal Defeasance had not
occurred;
(c) no Default or Event of Default shall have occurred and be
continuing either: (i) on the date of such deposit (other than a Default or an
Event of Default resulting from the borrowing of funds to be applied to such
deposit or (ii) insofar as Events of Default from bankruptcy or insolvency
events are concerned, at the time in the period ending on the 91st day after the
date of deposit;
(d) the Legal Defeasance shall not result in a breach or violation
of, or constitute a default under any material agreement or instrument(other
than this Indenture) to which the Company or any of its Restricted Subsidiaries
is a party or by which the Company or any of its Restricted Subsidiary is bound;
(e) the Obligors must deliver to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(f) the Obligors must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Obligors with the
intent of preferring the Holders of
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Securities over the other creditors of the Obligors with the intent of
defeating, hindering, delaying or defrauding creditors of the Obligors or
others; and
(g) the Obligors must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance have been complied with.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Obligors' obligations under the
Securities and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
Notwithstanding the foregoing, the Opinion of Counsel required by
Section 8.2(b) hereof with respect to a Legal Defeasance need not be delivered
if all Securities not theretofore delivered to the Trustee for cancellation (1)
have become due and payable or (2) shall become due and payable upon maturity or
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Obligors.
Section 8.3 Covenant Defeasance.
The Company may omit to comply with any term, provision or condition set
forth in clause (iv) of Section 5.1(a) hereof, and the Obligors may omit to
comply with any term, provision or condition set forth in Sections 4.8 through
4.17 hereof and any breach of clauses (c), (d), (e), or (f), or with respect to
Significant Subsidiaries only, clauses (g) or (h) under Section 6.1 hereof shall
be deemed not to be an Event of Default ("COVENANT DEFEASANCE"), if in each case
with respect to the outstanding Securities:
(a) the Obligors shall have irrevocably deposited with the
Trustee, in trust, for the benefit of the Holders cash in U.S. dollars, U.S.
Government Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the
Securities at the Stated Maturity thereof or on the applicable Redemption Date,
as the case may be, and the Obligors must specify whether the Securities are
being defeased to their Stated Maturity or to a particular Redemption Date;
(b) the Obligors shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably acceptable to such Trustee confirming
that the Holders will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such Covenant Defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if the Covenant Defeasance had not occurred;
(c) no Default or Event of Default shall have occurred and be
continuing either: (i) on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit or (ii) insofar as Events of Default from bankruptcy or insolvency
events are concerned, at the time in the period ending on the 91st day after the
date of deposit;
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(d) the Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under any material agreement or instrument
(other than this Indenture) to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound;
(e) the Obligors must deliver to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(f) the Obligors must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Obligors with the
intent of preferring the Holders of Securities over the other creditors of the
Obligors with the intent of defeating, hindering, delaying or defrauding
creditors of the Obligors or others; and
(g) the Obligors must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance have been complied with.
If the funds deposited with the Trustee to effect Covenant
Defeasance are insufficient to pay the principal of and interest on the
Securities when due, then the obligations of the Obligors under this Indenture
will be revived and no such defeasance will be deemed to have occurred.
Upon the occurrence of a Covenant Defeasance, the Trustee shall send
written notice of such Covenant Defeasance to the Obligors.
Notwithstanding the foregoing, the Opinion of Counsel required by
Section 8.3(b) hereof with respect to a Covenant Defeasance need not be
delivered if all Securities not theretofore delivered to the Trustee for
cancellation (1) have become due and payable or (2) shall become due and payable
upon maturity or redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Obligors.
Section 8.4 Application of Trust Money.
Subject to the provisions of Section 8.5 hereof, the Trustee or a Paying
Agent shall hold in trust, for the benefit of the Holders, all money deposited
with it pursuant to Section 8.1, 8.2 or 8.3 hereof and shall apply the deposited
money in accordance with this Indenture and the Securities to the payment of the
principal of, interest and Additional Interest, if any, on the Securities.
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Section 8.5 Repayment to Obligors.
The Trustee and each Paying Agent shall promptly pay to the Obligors upon
request any excess money (i) deposited with them pursuant to Section 8.1, 8.2 or
8.3 hereof and (ii) held by them at any time.
The Trustee and each Paying Agent shall pay to the Obligors upon request
any money held by them for the payment of principal or interest or Additional
Interest, if any, that remains unclaimed for two years after a right to such
money has matured; provided, however, that the Trustee or such Paying Agent,
before being required to make any such payment, may at the expense of the
Obligors cause to be mailed to each Holder entitled to such money notice that
such money remains unclaimed and that after a date specified therein, which
shall be at least 30 days from the date of such mailing, any unclaimed balance
of such money then remaining will be repaid to the Obligors. After payment to
the Obligors, Holders entitled to money must look to the Obligors for payment as
general creditors unless an applicable abandoned property law designates another
person.
Section 8.6 Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 8.5 hereof by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Obligors' obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.1, 8.2 or
8.3 hereof until such time as the Trustee or such Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
8.5 hereof; provided, however, that if the Obligors have made any payment of the
principal of or interest or Additional Interest, if any, on any Securities
because of the reinstatement of their obligations, the Obligors shall be
subrogated to the rights of the Holders of such Securities to receive any such
payment from the money or U.S. Government Obligations held by the Trustee or
such Paying Agent.
Section 8.7 Release of Ribapharm as Obligor.
If Ribapharm's obligations under the 6 1/2% Notes and the 6 1/2% Indenture
shall have been discharged in accordance with Article VIII of such indenture
(other than the obligations which shall survive pursuant to Section 8.01 of the
6 1/2% Indenture), the Company and Ribapharm shall deliver to the Trustee
Officers' Certificates certifying to that effect as of the date of such
Officers' Certificates, then automatically, without the requirement of any
further action by the Company, Ribapharm or the Trustee, Ribapharm shall, from
the date of such Officers' Certificates, have no further obligation or liability
under the Indenture or the Securities. The Trustee shall, at the Company's and
Ribapharm's expense, execute and deliver such instruments as the Company and
Ribapharm may reasonably request to evidence such discharge.
Section 8.8 Reinstatement of Ribapharm as Obligor.
If, at any time after Ribapharm has been released as an Obligor pursuant
to Section 8.7 hereof, the obligations of Ribapharm under the 6 1/2% Notes and
the 6 1/2% Indenture shall be revived and reinstated pursuant to Section 8.04 of
the 6 1/2% Indenture, the Company and
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Ribapharm shall promptly execute a supplemental indenture reinstating Ribapharm
as an Obligor under the Indenture and the Securities until such time as Section
8.7 hereof shall again apply.
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders.
The Obligors and the Trustee may amend or supplement this Indenture or the
Securities without notice to or consent of any Holder:
(a) to comply with Section 5.1 hereof
(b) to cure any ambiguity, defect or inconsistency;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to make any change that would provide any additional rights or
benefits to the Holders of Securities or that does not adversely affect the
legal rights under this Indenture of any such Holder;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to conform the text of this Indenture or the Securities to any
provision of the section of the Offering Memorandum dated December 9, 2003
captioned "Description of the Notes" to the extent that such provision was
intended to be a verbatim recitation of a provision of this Indenture or the
Securities;
(g) to provide for the issuance of Additional Securities in
accordance with the limitations set forth in this Indenture as of the date
hereof;
(h) to allow any Person to execute a supplemental indenture and a
Guarantee with respect to the Securities;
(i) to appoint a successor Trustee; or
(j) to remove or reinstate Ribapharm as an Obligor under the
Indenture, pursuant to Section 8.7 or Section 8.8 hereof.
Section 9.2 With Consent of Holders.
The Obligors and the Trustee may amend or supplement this Indenture
or the Securities with the written consent of the Holders of at least a majority
in aggregate principal amount of the Securities then outstanding. The Holders of
at least a majority in aggregate principal amount of the Securities then
outstanding may waive compliance in a particular
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instance by the Obligors with any provision of this Indenture or the Securities
without notice to any Securityholder. However, notwithstanding the foregoing but
subject to Section 9.4 hereof, without the written consent of each
Securityholder, an amendment, supplement or waiver, including a waiver pursuant
to Section 6.4 hereof, may not:
(a) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the Stated Maturity of any
Security or alter the provisions with respect to the redemption of the
Securities (other than provisions relating to Sections 3.8, 3.14 and 4.14);
(c) reduce the rate of or change the time for payment of interest
on any Security;
(d) waive a Default or Event of Default in the payment of
principal of, or interest or premium or Additional Interest, if any, on the
Securities (except a rescission of acceleration of the Securities by the Holders
of at least a majority in aggregate principal amount of the Securities and a
waiver of the payment default that resulted from such acceleration);
(e) make any Security payable in money other than U.S. dollars;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Securities to receive
payments of principal of, or interest or premium or Additional Interest, if any,
on the Securities;
(g) waive a redemption payment with respect to any note (other
than a payment required by Sections 3.8, 3.14 and 4.14);
(h) impair the right to institute suit for the enforcement of any
payment on or with respect to the Securities;
(i) remove Ribapharm as an Obligor on the Securities prior to such
time as Ribapharm's obligations under the 6 1/2% Notes and 6 1/2% Indenture
shall have been discharged as described in Section 8.5 hereof; or
(j) make any change in the preceding amendment and waiver
provisions.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof. Any Securities held by the Obligors or one of their Subsidiaries will
be disregarded for voting purposes in connection with this Article 9.
After an amendment, supplement or waiver under Section 9.1 or this Section
9.2 becomes effective, the Obligors shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Obligors to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
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Section 9.3 Compliance With Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as in effect at the date of such amendment or supplement.
Section 9.4 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent Holder
of a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to its Security or portion of a Security if the Trustee receives the notice
of revocation before the date the amendment, supplement or waiver becomes
effective.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (a) through
(i) of Section 9.2 hereof. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
Section 9.5 Notation On or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Obligors or the Trustee
so determines, the Obligors in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Section 9.6 Trustee to Sign Amendments, Etc.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplemental indenture does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, in its sole discretion, but need not sign it. In
signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and, subject to Section 7.1 hereof, shall
be fully protected in relying upon, an Opinion of Counsel stating that such
amendment or supplemental indenture is authorized or permitted by this
Indenture. The Obligors may not sign an amendment or supplemental indenture
until their Boards of Directors approve it.
Section 9.7 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
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ARTICLE 10
SUBSIDIARY GUARANTEES
Section 10.1 Future Guarantees.
If, after the date of this Indenture, any Domestic Subsidiary of the
Company provides a Guarantee in connection with any Indebtedness of the Company
or the Co-Obligor, that in each case ranks pari passu in right of payment with
the Securities, then the Company shall cause such Domestic Subsidiary, within
five Business Days of the date on which any such Domestic Subsidiary became so
obligated, to execute and deliver to the Trustee a Supplemental Indenture in
form reasonably satisfactory to the Trustee, pursuant to which such Domestic
Subsidiary shall unconditionally guarantee, on a senior unsecured basis, all of
the Obligors' obligations under the Securities and this Indenture on the terms
set forth herein and therein. Any Domestic Subsidiary that becomes a Guarantor
shall remain a Guarantor unless (i) designated an Unrestricted Subsidiary by the
Company in accordance with this Indenture or (ii) it is otherwise released from
its obligations as a Guarantor pursuant to Section 10.5 hereof.
Section 10.2 Terms of Guarantees.
(a) Subject to this Article 10, pursuant to the Supplemental
Indenture described in Section 10.1 hereof, each of the Domestic Subsidiaries
that will become Guarantors will, jointly and severally, unconditionally
Guarantee to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities or the obligations
of the Obligors hereunder or thereunder that: (i) the due and punctual payment
of principal, premium and interest and Additional Interest, if any, on the
Securities shall be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, (ii) the due and punctual payment of
interest on the overdue principal of and interest on the Securities, if any, if
lawful, and all other obligations of the Obligors to the Holders or the Trustee
hereunder or thereunder shall be promptly paid in full or performed, all in
accordance with the terms hereof and thereof, and (iii) in case of any extension
of time of payment or renewal of any Securities or any of such other
obligations, that same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration pursuant to Section 6.2 hereof or otherwise. Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to
pay the same immediately. Each Guarantor shall agree that this is a Guarantee of
payment and not a Guarantee of collection.
(b) Each Guarantor shall agree that its obligations with regard to
its Guarantee shall be joint and several, unconditional, irrespective of the
validity or enforceability of the Securities or the obligations of the Obligors
under this Indenture, the absence of any action to enforce the same, the
recovery of any judgment against the Obligors or any other obligor with respect
to this Indenture, the Securities or the obligations of the Obligors under this
Indenture or the Securities, any action to enforce the same or any other
circumstances (other than complete performance) which might otherwise constitute
a legal or equitable discharge or defense of a Guarantor. Each Guarantor
further, to the extent permitted by law, shall waive and relinquish all
78
claims, rights and remedies accorded by applicable law to guarantors and shall
agree not to assert or take advantage of any such claims, rights or remedies,
including but not limited to: (i) any right to require any of the Trustee, the
Holders or the Obligors (each a "BENEFITED PARTY"), as a condition of payment or
performance by such Guarantor, to (A) proceed against the Obligors, any other
guarantor (including any other Guarantor) of the obligations under the
Guarantees or any other person, (B) proceed against or exhaust any security held
from the Obligors, any such other guarantor or any other person, (C) proceed
against or have resort to any balance of any deposit account or credit on the
books of any Benefited Party in favor of the Obligors or any other person, or
(D) pursue any other remedy in the power of any Benefited Party whatsoever; (ii)
any defense arising by reason of the incapacity, lack of authority or any
disability or other defense of the Obligors including any defense based on or
arising out of the lack of validity or the unenforceability of the obligations
under the Guarantees or any agreement or instrument relating thereto or by
reason of the cessation of the liability of the Obligors from any cause other
than payment in full of the obligations under the Guarantees; (iii) any defense
based upon any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in other respects more burdensome
than that of the principal; (iv) any defense based upon any Benefited Party's
errors or omissions in the administration of the obligations under the
Guarantees, except behavior which amounts to bad faith; (v)(A) any principles or
provisions of law, statutory or otherwise, which are or might be in conflict
with the terms of the Guarantees and any legal or equitable discharge of such
Guarantor's obligations hereunder and under its Guarantee, (B) the benefit of
any statute of limitations affecting such Guarantor's liability hereunder and
under its Guarantee or the enforcement hereof and thereof, (C) any rights to
set-offs, recoupments and counterclaims and (D) promptness, diligence and any
requirement that any Benefited Party protect, secure, perfect or insure any
security interest or lien or any property subject thereto; (vi) notices,
demands, presentations, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance of the Guarantees,
notices of default under the Securities or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the obligations
under the Guarantees or any agreement related thereto, and notices of any
extension of credit to the Obligors and any right to consent to any thereof;
(vii) to the extent permitted under applicable law, the benefits of any "One
Action" rule and (viii) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of the Guarantees. Except as set
forth in Section 10.5, each Guarantor shall covenant that its Guarantee shall
not be discharged except by complete performance of the obligations contained in
its Guarantee and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to the Obligors, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Obligors
or the Guarantors, any amount paid to either the Trustee or such Holder, any
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
(d) Each Guarantor shall agree that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor shall further agree that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 6.2
79
hereof for the purposes of any Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby and (ii) in the event of any declaration of acceleration of
such obligations as provided in Section 6.2 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of any such Guarantee. The Guarantors shall have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the applicable Guarantee.
Section 10.3 Limitation on Guarantor Liability.
Each Guarantor shall confirm, and by its acceptance of Securities, each
Holder hereby confirms, that it is the intention of all such parties that any
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Guarantee. To effectuate the foregoing intention, the
Trustee and the Holders irrevocably agree, and the Guarantors shall irrevocably
agree, that the obligations of such Guarantor under this Article 10 shall be
limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article 10, result in the obligations of such Guarantor under its Guarantee not
constituting a fraudulent transfer or conveyance.
Section 10.4 Merger and Consolidation of Guarantors.
(a) In case of any sale or other disposition, consolidation,
merger, sale or conveyance and upon the assumption by the successor person, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Guarantee endorsed upon the Securities and the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor person shall succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor. Such successor person thereupon may cause to be
signed any or all of the Guarantees to be endorsed upon all of the Securities
available hereunder which theretofore shall not have been signed by the Obligors
and delivered to the Trustee. All the Guarantees so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Guarantees had been issued at the date of the execution
hereof.
(b) Except as set forth in Articles 4 and 5 hereof, and
notwithstanding clause (a) of this Section 10.4, nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation or merger
of a Guarantor with or into the Company or the Co-Obligor, or shall prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company, the Co-Obligor or another
Guarantor.
80
Section 10.5 Release.
(a) In the event (i) that a Guarantor ceases to provide a
Guarantee in connection with any and all Indebtedness of the Company or the
Co-Obligor, that in each case ranks pari passu in right of payment with the
Securities, (ii) of a sale or other disposition of all or substantially all of
the assets of any Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all to the Capital Stock of any Guarantor, in each
case to a person that is not (either before or after giving effect to such
transactions) a Subsidiary of the Company, so long as the Net Proceeds of such
sale or other disposition are applied in accordance with the applicable
provisions of this Indenture, including without limitation Section 4.14 hereof,
or (iii) of a designation by the Company of any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary in accordance with the definition
thereof, such Guarantor or, in the case of a sale or other disposition of all or
substantially all of the assets of such Guarantor, the corporation acquiring
such property, shall be released and relieved of any obligations under its
Guarantee without any further action being required by the Trustee or any
Holder.
(b) Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.8 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Guarantor from its obligations under its Guarantee.
(a) Any Guarantor not released from its obligations under its
Security Guarantee shall remain liable for the full amount of principal of and
interest on the Securities and for the other obligations of any Guarantor under
this Indenture as provided in this Article 10.
ARTICLE 11
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of Sections 310 to 317, inclusive, of the TIA through
operation of Section 318(c) thereof, such imposed duties shall control.
81
Section 11.2 Notices.
Any demand, authorization notice, request, consent or communication shall
be given in writing and delivered in person or mailed by first-class mail,
postage prepaid, addressed as follows or transmitted by facsimile transmission
(confirmed by delivery in person or mail by first-class mail, postage prepaid,
or by guaranteed overnight courier) to the following facsimile numbers:
If to the Obligors, to:
Valeant Pharmaceuticals International
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
With a copy to:
Valeant Pharmaceuticals International
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
If to the Trustee, to:
The Bank of New York
000 Xxxxxxx Xxxxxx - 0X
Xxx Xxxx, XX 00000
Attn: Corporate Trust Administration
Facsimile No.: (000) 000-0000
Such notices or communications shall be effective when received.
The Obligors or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed by
first-class mail or delivered by an overnight delivery service to it at its
address shown on the register kept by the Primary Registrar.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication to a Holder is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
82
Section 11.3 Communications by Holders With Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Obligors, the Trustee, the Registrar and any other person shall
have the protection of TIA Section 312(c).
Section 11.4 Certificate and Opinion of Counsel as to Conditions
Precedent.
(a) Upon any request or application by the Obligors to the Trustee
to take any action under this Indenture, the Obligors shall furnish to the
Trustee at the request of the Trustee:
(A) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent (including any covenants,
compliance with which constitutes a condition precedent), if any, provided
for in this Indenture relating to the proposed action have been complied
with; and
(B) an Opinion of Counsel stating that, in the opinion
of such counsel, all such conditions precedent (including any covenants,
compliance with which constitutes a condition precedent) have been
complied with.
(b) Each Officers' Certificate and Opinion of Counsel with respect
to compliance with a condition or covenant provided for in this Indenture shall
include:
(A) a statement that the person making such
certificate or opinion has read such covenant or condition;
(B) 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;
(C) 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
(D) a statement as to whether or not, in the opinion
of such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public officials.
Section 11.5 Record Date for Vote or Consent of Holders.
The Obligors (or, in the event deposits have been made pursuant to 8.1,
8.2 or 8.3 hereof, the Trustee) may set a record date for purposes of
determining the identity of Holders entitled to vote or consent to any action by
vote or consent authorized or permitted under this Indenture, which record date
shall not be more than thirty (30) days prior to the date of the commencement of
solicitation of such action. Notwithstanding the provisions of Section 9.4
hereof, if a record
83
date is fixed, those persons who were Holders of Securities at the close of
business on such record date (or their duly designated proxies), and only those
persons, shall be entitled to take such action by vote or consent or to revoke
any vote or consent previously given, whether or not such persons continue to be
Holders after such record date.
Section 11.6 Rules by Trustee, Paying Agent and Registrar.The Trustee may
make reasonable rules (not inconsistent with the terms of this Indenture) for
action by or at a meeting of Holders. Any Registrar or Paying Agent may make
reasonable rules for its functions.
Section 11.7 Legal Holidays.
A "Legal Holiday" is a Saturday, Sunday or a day on which state or
federally chartered banking institutions in New York, New York and the state in
which the Corporate Trust Office is located are not required to be open. If a
payment date, including any Redemption Date, Purchase Date, Change of Control
Purchase Date and Final Maturity Date, is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest or
Additional Interest, if any, shall accrue for the intervening period on such
payment. If an interest record date is a Legal Holiday, the record date shall
not be affected.
Section 11.8 Governing Law; Submission to Jurisdiction.
(a) This Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
(b) The Obligors irrevocably submit to the non-exclusive
jurisdiction of any New York State or United States Federal court sitting in The
City of New York over any suit, action or proceeding arising out of or relating
to this Indenture. The Obligors irrevocably waive, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding brought in such a court and any
claim that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum.
Section 11.9 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Obligors or a Subsidiary of the Obligors. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 11.10 No Recourse Against Others.
All liability described in paragraph 13 of the Form of the Securities
attached hereto as Exhibit A of any director, officer, employee or shareowner,
as such, of the Obligors is waived and released.
84
Section 11.11 Successors.
All agreements of the Obligors in this Indenture and the Securities shall
bind their successors. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 11.12 Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture. Each signed
counterpart shall be deemed an original, but all of them together represent the
same agreement.
Section 11.13 Separability.
In case any provisions in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.14 Table of Contents, Headings, etc.
The table of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 11.15 Calculations in Respect of the Securities.
The Obligors and their agents shall make all calculations under the
Indenture and the Securities in good faith. In the absence of manifest error,
such calculations shall be final and binding on all Holders. The Obligors shall
provide a copy of such calculations to the Trustee as required hereunder.
[SIGNATURE PAGE FOLLOWS]
85
EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date and year first above written.
VALEANT PHARMACEUTICALS INTERNATIONAL
By: /s/ Xxxxxx X. X'Xxxxx
--------------------------------------
Name: Xxxxxx X. X'Xxxxx
Title: Chairman of the Board and Chief
Executive Officer
RIBAPHARM INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Treasurer
THE BANK OF NEW YORK, AS TRUSTEE
By: /s/ Xxxx Xxxxxxxx
----------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
(Signature Page to Indenture)
EXHIBIT A
[FORM OF FACE OF SECURITY]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE COMPANY, RIBAPHARM OR THEIR AGENTS FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.] (1)
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON AN EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (c) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a) (1), (2),
----------
(1) This paragraph to be included only if the Security is a Global Security.
A-1
(3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR")) THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO VALEANT
PHARMACEUTICALS INTERNATIONAL THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
VALEANT PHARMACEUTICALS INTERNATIONAL SO REQUESTS), (2) TO VALEANT
PHARMACEUTICALS INTERNATIONAL OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE."] (2)
[THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS NOTE TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR
THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER
OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED
BY THE ACCEPTANCE OF THIS NOTE TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.] (3)
[THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION
RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO
COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.] (4)
[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SECURITY, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE SECURITIES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOT
THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SECURITY SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.] (5)
----------
(2) These paragraphs to be included only if the Security is a Restricted
Security.
(3) Include only if the Security is a Restricted Security.
(4) Include only if a Registration Statement is not effective.
(5) Include only on Regulation S Temporary Global Security.
A-2
VALEANT PHARMACEUTICALS INTERNATIONAL
CUSIP: [ ] No. [ ]
7.0% SENIOR NOTES DUE DECEMBER 15, 2011
Valeant Pharmaceuticals International, a Delaware corporation (the
"Company," which term shall include any successor corporation under the
Indenture referred to on the reverse hereof), and Ribapharm Inc. ("Ribapharm,"
which term shall include any successor corporation under the Indenture referred
to on the reverse hereof) promise to pay to ______________ or its registered
assigns, the principal sum of _____________________________ Dollars
($__________) on December 15, 2011 [or such greater or lesser amount as is
indicated on the Schedule of Exchanges of Notes on the other side of this Note]
(6)
and to pay interest thereon as provided on the other side of this Note.
Interest Payment Dates: June 15 and December 15, beginning June 15, 2004.
Record Dates: June 1 and December 1.
Additional provisions of this Note are set forth on the other side of this
Note.
[SIGNATURE PAGE FOLLOWS]
----------
(6) Include only if the Security is a Global Security.
A-3
IN WITNESS WHEREOF, the Company and Ribapharm have caused this instrument
to be duly executed.
Valeant Pharmaceuticals International
By:
-------------------------------------
Name:
Title:
Ribapharm Inc.
By:
-------------------------------------
Name:
Title:
A-4
Trustee's Certificate of Authentication:
This is one of the Securities referred
to in the within-mentioned Indenture for
the 7.0% Senior Notes due 2011.
THE BANK OF NEW YORK,
as Trustee
----------------------------------------
Authorized Signatory
By:
Dated:
A-5
[FORM OF REVERSE SIDE OF SECURITY]
VALEANT PHARMACEUTICALS INTERNATIONAL
7.0% SENIOR NOTES DUE DECEMBER 15, 2011
1. INTEREST
The Company and Ribapharm shall pay interest on this Note semiannually in
arrears on June 15 and December 15, each an "interest payment date," of each
year, commencing on June 15, 2004, at the rate per annum specified in the title
of this Note. Interest shall accrue from and including December 12, 2003 or else
the most recent interest payment date to which interest had been paid or duly
provided for to but excluding the date on which such interest is paid. Interest
on this Note will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company and Ribapharm shall, (in immediately available funds) to the
fullest extent permitted by law, pay interest on overdue principal (including
premium, if any) and overdue installments of interest from the original due date
to the date paid, at the rate applicable to this Note plus 1% per annum, which
interest shall be payable on demand.
All references in the Indenture and this Note to interest shall be deemed
to include a reference to Additional Interest payable pursuant to the
Registration Rights Agreement with respect to this Note. If Additional Interest
is payable on this Note as contemplated under the Registration Rights Agreement,
such interest shall be payable on each interest payment date and at maturity to
the record holder entitled to interest on such date.
The interest so payable and punctually paid or duly provided for on any
interest payment date will be paid to the Person in whose name this Note is
registered at the close of business on June 1 or December 1 preceding such
interest payment date (the "RECORD DATE") except as provided in the Indenture.
Payment of the principal of (and premium, if any) and interest on this Note will
be made in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts and as
otherwise provided in the Indenture.
2. METHOD OF PAYMENT
The Holder must surrender this Note to a Paying Agent to collect payment
of principal at maturity. The Company and Ribapharm will make any payments of
interest at maturity to the person to whom the principal is paid. On
presentation and surrender of the certificated Note, the Company and Ribapharm
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. Payment of
the principal of, premium, if any, and interest (including Additional Interest,
if any) on this Note shall be made at the office or agency of the Paying Agent
and Registrar within the City and State of New York in immediately available
funds in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided that
the Company and Ribapharm may elect to make payment of interest or Additional
Interest, if any, by check mailed to the address of the Person entitled thereto
as such address
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appears in the Register. Payment of the principal of, premium, if any, and
interest (including Additional Interest, if any) on a Note held by a Holder
holding an aggregate principal amount of Notes in excess of $1,000,000 shall be
made by wire transfer in immediately available funds to an account maintained by
such Holder in the United States, if such Holder has provided wire transfer
instructions to the Company and Ribapharm at least 10 Business Days prior to the
payment date. Any wire transfer instructions received by the Trustee will remain
in effect until revoked by the Holder. Notwithstanding the foregoing, so long as
this Note is registered in the name of a Depositary or its nominee, all payments
hereon shall be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee.
3. PAYING AGENT AND REGISTRAR
Initially, The Bank of New York (the "TRUSTEE," which term shall include
any successor trustee under the Indenture hereinafter referred to) will act as
Paying Agent and Registrar. The Company and Ribapharm may change any Paying
Agent or Registrar without notice to the Holder. The Company and Ribapharm or
any of their Subsidiaries may, subject to certain limitations set forth in the
Indenture, act as Paying Agent or Registrar.
4. INDENTURE, LIMITATIONS
This Note is one of a duly authorized issue of Securities of the Company
and Ribapharm designated as their 7.0% Senior Notes Due December 15, 2011 (the
"NOTES"), issued under an Indenture dated as of December 12, 2003 (together with
any supplemental indentures thereto, the "INDENTURE"), among the Company,
Ribapharm and the Trustee. The terms of this Note include those stated in the
Indenture and those required by or made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended, as in effect on the date of the
Indenture. This Note is subject to all such terms, and the Holder of this Note
is referred to the Indenture and said Act for a statement of them. Capitalized
terms used and not defined herein have the meanings assigned to such terms in
the Indenture.
The Obligors shall be entitled to issue Additional Securities pursuant to
Section 2.1(c) of the Indenture.
5. OPTIONAL REDEMPTION; PURCHASE OF NOTES AT OPTION OF HOLDER.
(a) Optional Redemption. After December 15, 2007, the Notes are
redeemable at the option of the Company at the prices, and upon the terms and
conditions, set forth in the Indenture. On or prior to December 15, 2006, the
Company may redeem up to 35% of the Notes with the net cash proceeds of one or
more Equity Offerings, at the prices, and upon the terms and conditions, set
forth in the Indenture.
(b) Repurchase at Option of Holder. 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 Notes at a purchase price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Additional Interest thereon, if any, to the date of purchase (the "CHANGE OF
CONTROL
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PAYMENT"). Within 10 days following any Change of Control, the Company shall
mail a notice to each Holder setting forth the procedures governing the Change
of Control Offer as required by the Indenture.
If after the Company or a Restricted Subsidiary consummates any Asset
Sale, the aggregate amount of Excess Proceeds exceeds $10 million, the Company
shall commence an offer to all Holders of Notes and all holders of other Parity
Indebtedness an aggregate principal amount of Notes and such other Parity
Indebtedness that may be purchased (or repaid, prepaid or redeemed) equal to the
aggregate Excess Proceeds (an "ASSET SALE OFFER") pursuant to Section 4.14 of
the Indenture to purchase the maximum principal amount of Notes and other Parity
Indebtedness that may be purchased out of the Excess Proceeds at an offer price
in cash in an amount equal to 100% of the principal amount thereof plus accrued
and unpaid interest and Additional Interest thereon, if any, to the date fixed
for the closing of such offer, in accordance with the procedures set forth in
the Indenture. To the extent that the aggregate amount of Notes and other Parity
Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company (or such Restricted Subsidiary) may use such deficiency
for any purpose not otherwise prohibited by the Indenture. If the aggregate
principal amount of Notes and other Parity Indebtedness surrendered by holders
thereof exceeds the amount of Excess Proceeds, the Company shall select the
Notes and other Parity Indebtedness to be purchased on a pro rata basis. Holders
of Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
(c) 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 whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
6. DENOMINATIONS, TRANSFER, EXCHANGE, CANCELLATION
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer of
or exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes or other governmental charges that may be imposed
in relation thereto by law or permitted by the Indenture.
All Notes surrendered for payment, registration of transfer or exchange or
conversion will, if surrendered to the Company or Ribapharm or any of their
other Agents with respect to the Notes, be delivered to the Trustee. The Trustee
will promptly cancel all Notes delivered to it. No Notes will be authenticated
in exchange for any Notes cancelled as provided in the Indenture.
7. PERSONS DEEMED OWNERS
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The Holder of a Note may be treated as the owner of it for all purposes.
8. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company
and Ribapharm at their written request, subject to applicable unclaimed property
law. After that, Holders entitled to money must look to the Company and
Ribapharm for payment as general creditors unless an applicable abandoned
property law designates another person.
9. AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, and an existing
default or Event of Default and its consequence or compliance with any provision
of the Indenture or the Notes may be waived in a particular instance with the
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without the consent of or notice to any Holder, the Company
and Ribapharm and the Trustee may amend or supplement the Indenture or the Notes
to, among other things, cure any ambiguity, defect or inconsistency or make any
other change that does not adversely affect the rights of any Holder or remove
Ribapharm as an obligor hereunder pursuant to paragraph 17 below.
10. SUCCESSOR ENTITY
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture in accordance with the terms and
conditions of the Indenture, the predecessor corporation (except in certain
circumstances specified in the Indenture) shall be released from those
obligations.
11. DEFAULTS AND REMEDIES
Under the Indenture, an Event of Default includes: (i) default in payment
of any principal (including, without limitation, any premium) on the Notes when
due; (ii) default for 30 days in payment of interest or Additional Interest, if
any, on any Notes; (iii) failure by the Company and Ribapharm for 60 days after
notice to it to comply with certain covenants contained in the Indenture or the
Notes; (iv) default in the payment of certain indebtedness of the Company,
Ribapharm or a Significant Subsidiary; (v) certain events of bankruptcy,
insolvency or reorganization of the Company, Ribapharm or any Significant
Subsidiary and (vi) certain other events described in the Indenture. If an Event
of Default (other than as a result of certain events of bankruptcy, insolvency
or reorganization of the Company or Ribapharm) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding may declare all unpaid principal, premium, if any, and
accrued interest and Additional Interest, if any, to the date of acceleration on
the Notes then outstanding to be due and payable immediately, all as and to the
extent provided in the Indenture. If an Event of Default occurs as a result of
certain events of bankruptcy, insolvency or reorganization of the Company or
Ribapharm or any Significant Subsidiary, unpaid principal, premium, if any, and
accrued interest and Additional Interest, if any, on the Notes then outstanding
shall become due and
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payable immediately without any declaration or other act on the part of the
Trustee or any Holder, all as and to the extent provided in the Indenture.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in aggregate principal amount of the Notes then outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is in
their interests. The Company and Ribapharm are required to file periodic reports
with the Trustee as to the absence of default.
12. TRUSTEE DEALINGS WITH THE COMPANY
The Bank of New York, the Trustee under the Indenture, in its individual
or any other capacity, may make loans to, accept deposits from and perform
services for the Company, Ribapharm or an Affiliate of the Company or Ribapharm,
and may otherwise deal with the Company, Ribapharm or an Affiliate of the
Company or Ribapharm, as if it were not the Trustee.
13. NO RECOURSE AGAINST OTHERS
A director, officer, employee or shareowner, as such, of the Company and
Ribapharm shall not have any liability for any obligations of the Company and
Ribapharm under the Notes or the Indenture nor for any claim based on, in
respect of or by reason of such obligations or their creation. The Holder of
this Note by accepting this Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of this Note.
14. AUTHENTICATION
This Note shall not be valid until the Trustee or an authenticating agent
manually signs the certificate of authentication on the other side of this Note.
15. ABBREVIATIONS AND DEFINITIONS
Customary abbreviations may be used in the name of the Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and UGMA (= Uniform Gifts to Minors Act).
16. INDENTURE TO CONTROL; GOVERNING LAW
In the case of any conflict between the provisions of this Note and the
Indenture, the provisions of the Indenture shall control. This Note shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of law.
The Company and Ribapharm will furnish to any Holder, upon written request
and without charge, a copy of the Indenture. Requests may be made to: Valeant
Pharmaceuticals International, 0000 Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000,
(000) 000-0000, Attention: Investor Relations.
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17. RELEASE OF RIBAPHARM AS OBLIGOR
If Ribapharm's obligations under the 6 1/2% Notes and the 6 1/2% Indenture
shall have been discharged in accordance with Article VIII of such indenture
(other than the obligations which shall survive pursuant to Section 8.01 of the
6 1/2% Indenture), the Company and Ribapharm shall deliver to the Trustee
Officers' Certificates certifying to that effect as of the date of such
Officers' Certificates, then automatically, without the requirement of any
further action by the Company, Ribapharm or the Trustee, Ribapharm shall, from
the date of such Officers' Certificates, have no further obligation or liability
under the Indenture or the Securities. The Trustee shall, at the Company's and
Ribapharm's expense, execute and deliver such instruments as the Company and
Ribapharm may reasonably request to evidence such discharge.
18. REINSTATEMENT OF RIBAPHARM AS OBLIGOR
If, at any time after Ribapharm has been released as an Obligor pursuant
to Section 8.7 of the Indenture, the obligations of Ribapharm under the 6 1/2%
Notes and the 6 1/2% Indenture shall be revived and reinstated pursuant to
Section 8.04 of the 6 1/2% Indenture, the Company and Ribapharm shall promptly
execute a supplemental indenture reinstating Ribapharm as an Obligor under the
Indenture and the Securities until such time as Section 8.7 of the Indenture
shall again apply.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company and Ribapharm. The agent
may substitute another to act for him or her.
Your Signature:
Date:
--------------------------------- ---------------------------------------
(Sign exactly as your name appears on
the other side of this Note)
*Signature guaranteed by:
By:
------------------------------------
* The signature must be guaranteed by an institution which is a member
of one of the following recognized signature guaranty programs: (i)
the Securities Transfer Agent Medallion Program (STAMP); (ii) the
New York Stock Exchange Medallion Program (MSP); (iii) the Stock
Exchange Medallion Program (SEMP); or (iv) such other guaranty
program acceptable to the Trustee.
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OPTION TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 3.8 or 4.14 of the Indenture, check the appropriate box below:
[ ]Section 3.8 [ ] Section 4.14
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 3.8 or Section 4.14 of the Indenture, state the amount you
elect to have purchased:
$_______________
Date: _______________
Your Signature:
------------------------
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:
----------------
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF NOTES (7)
The following exchanges, repurchases or conversions of a part of this
global Note have been made:
PRINCIPAL AMOUNT
OF THIS GLOBAL SECURITY AUTHORIZED AMOUNT OF
FOLLOWING SUCH SIGNATORY OF AMOUNT OF DECREASE IN INCREASE IN
DECREASE DATE SECURITIES PRINCIPAL AMOUNT PRINCIPAL AMOUNT
OF EXCHANGE (OR INCREASE) CUSTODIAN OF THIS GLOBAL SECURITY OF THIS GLOBAL SECURITY
----------
(7) This schedule should be included only if the Security is a Global
Security.
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF RESTRICTED SECURITIES (8)
Re: __% Senior Notes Due ________, 2011 (the "NOTES") of Valeant
Pharmaceuticals International (the "COMPANY") and Ribapharm Inc.
This certificate relates to $_______ principal amount of Notes owned in
(check applicable box)
[ ] book-entry or [ ] definitive form by ___________________ (the
"TRANSFEROR").
The Transferor has requested a Registrar or the Trustee to exchange or
register the transfer of such Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with transfer
restrictions relating to the Notes as provided in Section 2.12 of the Indenture
dated as of December 12, 2003 among Valeant Pharmaceuticals International,
Ribapharm Inc. and The Bank of New York, as trustee (the "INDENTURE"), and the
transfer of such Note is in accordance with any applicable securities laws of
any state and is being made pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "SECURITIES ACT") (check
applicable box) or the transfer or exchange, as the case may be, of such Note
does not require registration under the Securities Act because (check applicable
box):
[ ] Such Note is being transferred pursuant to an effective registration
statement under the Securities Act.
[ ] Such Note is being acquired for the Transferor's own account,
without transfer.
[ ] Such Note is being transferred to the Company, Ribapharm or a
Subsidiary (as defined in the Indenture) of the Company.
[ ] Such Note is being transferred to a person the Transferor reasonably
believes is a "qualified institutional buyer" (as defined in Rule
144A or any successor provision thereto ("RULE 144A") under the
Securities Act) that is purchasing for its own account or for the
account of a "qualified institutional buyer," in each case to whom
notice has been given that the transfer is being made in reliance on
such Rule 144A, and in each case in reliance on Rule 144A.
[ ] Such Note is being transferred pursuant to and in compliance with an
exemption from the registration requirements under the Securities
Act in accordance with Rule 144 (or any successor thereto) ("RULE
144") under the Securities Act.
[ ] Such Note is being transferred to a non-U.S. Person in an offshore
transaction in compliance with Rule 904 of Regulation S under the
Securities Act (or any successor thereto).
----------
(8) This certificate should be included only if this Security is a Restricted
Security.
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[ ] Such Note is being transferred to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of the
Securities Act) that has provided a letter addressed to the Company,
in the form of Exhibit B attached to the Indenture, containing
certain representations and agreements.
The Transferor acknowledges and agrees that, if the transferee will hold
any such Notes in the form of beneficial interests in a global Note which is a
"restricted security" within the meaning of Rule 144 under the Securities Act,
then such transfer can only be made pursuant to (i) Rule 144A under the
Securities Act and such transferee must be a "qualified institutional buyer" (as
defined in Rule 144A) or (ii) Regulation S under the Securities Act.
Date:
--------------------------------- ---------------------------------------
(Insert Name of Transferor)
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EXHIBIT B
FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
Valeant Pharmaceuticals International
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
[ ]
RE: 7.0% SENIOR NOTES DUE 2011
Dear Sirs:
Reference is hereby made to the Indenture, dated as of December 12, 2003 (the
"INDENTURE"), among Valeant Pharmaceuticals International, as issuer (the
"COMPANY"), Ribapharm Inc., as co-obligor ("RIBAPHARM") and The Bank of New
York, a banking corporation duly organized under the laws of the State of New
York, as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
In connection with our proposed purchase of: $____________ aggregate principal
amount of 7.0% Senior Notes Due 2011 (the "SECURITIES"), we confirm that:
1. We understand that any subsequent transfer of the Securities or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Securities or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Securities have not been
registered under the Securities Act, and that the Securities and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Securities or any
interest therein, we will do so only (A) to the Company or any of its
subsidiaries, including Ribapharm, (B) in accordance with Rule 144A under the
Securities Act to a "qualified institutional buyer" (as defined therein), (C)
inside the United States to an institutional "accredited investor" (as defined
below) purchasing for its own account or for the account of another
institutional accredited investor that, prior to such transfer, furnishes (or
has furnished on its behalf by
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a U.S. broker-dealer) to you and to the Company a signed letter substantially in
the form of this letter and, if the proposed transfer is in respect of an
aggregate principal amount of Securities of less than $250,000, an Opinion of
Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) pursuant to the
provisions of Rule 144 under the Securities Act (if available), (E) in
accordance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel acceptable to the Company)
or (F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Securities from us
in a transaction meeting the requirements of clauses (A) through (F) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein.
3. We understand that, on any proposed resale of the Securities or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and 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.
5. We are acquiring the Securities or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "ACCREDITED INVESTOR") as to each of which we exercise sole
investment discretion.
You, the Company and Ribapharm are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Dated:
[Insert Name of Accredited Investor]
By:
------------------------------------
Name:
Title:
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