EXHIBIT 10(bbb)
PALOMAR MEDICAL TECHNOLOGIES, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Trustee
------------------------
Indenture
Dated as of June 24, 1996
------------------------
SF 25,000,000
4.5% Convertible Subordinated Debentures
due 2003
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. Definitions............................................................... 2
Section 1.2. Trust Indenture Act....................................................... 14
Section 1.3. Rules of Construction..................................................... 14
ARTICLE II
FORM OF DEBENTURES
Section 2.1. Title and Terms........................................................... 15
Section 2.2. Date of Debentures and Denominations; Payment of
Interest......................................................... 15
Section 2.3. Ranking of Debentures..................................................... 18
Section 2.4. Execution and Authentication of Debentures................................ 18
Section 2.5. Form of Debentures and Trustee's Certificate.............................. 19
Section 2.6. Registrar, Paying Agent, and Conversion Agent............................. 20
Section 2.7. Paying Agent to Hold Money in Trust....................................... 22
Section 2.8. Exchange, Registration and
Transfer of Debentures ......................................... 22
Section 2.9. Mutilated, Destroyed, Lost or Stolen Debentures........................... 25
Section 2.10. Cancellation of Surrendered Debentures.................................... 26
Section 2.11. Provisions of Indenture and Debentures for Sole
Benefit of Persons Identified.................................... 26
Section 2.12. Temporary Debentures...................................................... 27
Section 2.13. Appointment to Fill Vacancy in Office of Trustee.......................... 27
i
ARTICLE III
REDEMPTION OF DEBENTURES
Section 3.1. Debentures Redeemable..................................................... 28
Section 3.2. Mailing of Notice of Redemption; Selection of
Debentures in Case Less Than All
Debentures to be Redeemed........................................ 28
Section 3.3. When Debentures Called for Redemption Become Due
and Payable...................................................... 31
Section 3.4. Discharge of Company's Obligations Upon Deposit
of Redemption Moneys............................................. 31
Section 3.5. Issuance of Debentures for Unredeemed Portions of
Debentures. ..................................................... 32
Section 3.6. Sinking Fund.............................................................. 32
ARTICLE IV
CONVERSION OF DEBENTURES
Section 4.1. Right of Debentureholders to Convert Debenture
Into Common Stock of Company..................................... 34
Section 4.2. Right of Company to Convert Debenture into Common
Stock of Company................................................. 36
Section 4.3. Exercise of Conversion Privilege.......................................... 37
Section 4.4. Issuance of Shares of Common Stock on Conversion.......................... 38
Section 4.5. Adjustment of Antidilution Factor......................................... 39
Section 4.6. No Fractional Shares to be Issued; Cash Payments
in Lieu Thereof.................................................. 43
Section 4.7. Accountants' Certificate Evidence of Correctness
of Computation................................................... 43
Section 4.8. Notice of Corporate Action................................................ 44
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Section 4.9. Covenant to Reserve Shares of Common Stock for
Issuance on Conversion of Debentures and
Exercise of Warrants............................................. 45
Section 4.10. Issuance of Certificates for Shares of Common
Stock, in Name of, or in Name Directed
by, Debentureholder.............................................. 46
Section 4.11. Mailing of Notice Upon Adjustment Pursuant to
Section 4........................................................ 46
Section 4.12. Responsibility of Trustee................................................. 47
ARTICLE V
COVENANTS OF THE COMPANY
Section 5.1. Payment of Principal of and Interest on Debentures........................ 47
Section 5.2. Taxes, Assessments, Governmental Charges and
Certain Claims................................................... 48
Section 5.3. Reporting Requirements.................................................... 48
Section 5.4. Books and Records......................................................... 48
Section 5.5. Maintenance of Insurance.................................................. 49
Section 5.6. Maintenance of Corporate Existence, Properties,
Etc.............................................................. 49
Section 5.7. Type of Business.......................................................... 50
Section 5.8. Merger or Sale of Assets.................................................. 50
Section 5.9. Investments............................................................... 50
Section 5.10. Transactions with Affiliates.............................................. 51
Section 5.11. Use of Proceeds........................................................... 51
Section 5.12. Dividends, Etc............................................................ 52
Section 5.13. Limitation on Liens....................................................... 52
Section 5.14. Compliance with Laws, Etc................................................. 52
ARTICLE VI
DEBENTUREHOLDER'S LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
iii
Section 6.1. Company to Furnish Trustee Information as to
Names and Addresses of Debentureholders.......................... 53
Section 6.2. Trustee to Preserve Information as to Names and
Addresses of Debentureholders.................................... 53
Section 6.3. Reports from the Company.................................................. 55
Section 6.4. Reports from the Trustee.................................................. 56
ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
Section 7.1. Events of Default Defined................................................. 57
Section 7.2. Covenant of Company to Pay to Trustee Whole
Amount Due on Debentures on Default in
Payment of Interest or Principal................................. 61
Section 7.3. Application of Moneys Collected by Trustee................................ 63
Section 7.4. Limitation on Suits by Holders of Debentures.............................. 64
Section 7.5. Delay or Omission in Exercise of Rights Not
Waiver of Default................................................ 66
Section 7.6. Rights of Holders of Majority in Principal Amount
of Debentures to Direct Trustee and
Waive Defaults................................................... 66
Section 7.7. Trustee to Give Notice of Defaults Known to it,
but May Withhold in Certain Circumstances........................ 67
Section 7.8. Requirement of an Undertaking to Pay Costs in
Certain Suits Under Indenture or Against
Trustee.......................................................... 68
Section 7.9. Company Covenants......................................................... 68
iv
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1. Duties of Trustee Prior to and After Event of
Default.......................................................... 69
Section 8.2. Rights of Trustee......................................................... 70
Section 8.3. Trustee Not Liable for Recitals in Indenture or
in Debentures.................................................... 72
Section 8.4. Trustee, Paying Agent, Conversion Agent or
Debenture Registrar May Own Debentures........................... 72
Section 8.5. Moneys Received by Trustee to be Held in Trust............................ 73
Section 8.6. Trustee Entitled to Compensation, Reimbursement
and Indemnity.................................................... 73
Section 8.7. Right of Trustee to Rely on Certificate of
Officers of Company Where no Other
Evidence Specifically Prescribed................................. 74
Section 8.8. Conflict of Interest...................................................... 74
Section 8.9. Requirements for Eligibility of Trustee................................... 75
Section 8.10. Resignation or Removal of
Trustee.......................................................... 75
Section 8.11. Acceptance by Successor to Trustee........................................ 77
Section 8.12. Successor to Trustee by Merger, Consolidation or
Succession to Business........................................... 78
Section 8.13. Trustee as a Creditor..................................................... 78
ARTICLE IX
CONCERNING THE DEBENTUREHOLDERS
Section 9.1. Evidence of Action by Debentureholders.................................... 84
v
Section 9.2. Proof of Execution of Instruments and of Holding
of Debentures.................................................... 85
Section 9.3. Who May be Deemed Owners of Debentures.................................... 86
Section 9.4. Debentures Owned by Company or Controlled or
Controlling Companies Disregarded for
Certain Purposes................................................. 86
Section 9.5. Action by Debentureholders Binds Future Holders........................... 87
ARTICLE X
DEBENTUREHOLDERS' MEETINGS
Section 10.1. Purposes for Which Meetings May be Called................................. 87
Section 10.2. Manner of Calling Meetings................................................ 88
Section 10.3. Call of Meetings by Company or Debentureholders........................... 88
Section 10.4. Who May Attend and Vote at Meetings....................................... 89
Section 10.5. Regulations May be Made by Trustee........................................ 89
Section 10.6. Manner of Voting at Meetings and Record to be Kept........................ 90
Section 10.7. Exercise of Rights of Trustee or Debentureholders
May Not be Hindered or Delayed by Call
of Meeting of Debentureholders................................... 91
Section 10.8. Notice to Debentureholders................................................ 92
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1. Purposes for Which Supplemental Indentures May be
Entered into Without Consent of
Debentureholders................................................. 92
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Section 11.2. Modification of Indenture with Consent of Holders
of 66-2/3% in Principal Amount of
Debentures....................................................... 93
Section 11.3. Effect of Supplemental Inden-
tures............................................................ 95
Section 11.4. Debentures May Bear Notation of Changes................................... 95
Section 11.5. Opinion of Counsel........................................................ 95
ARTICLE XII
CONSOLIDATION OR MERGER
Section 12.1. When Company May Merge, Etc............................................... 96
Section 12.2. Successor Corporation..................................................... 97
ARTICLE XIII
SUBORDINATION OF DEBENTURES
Section 13.1. Agreement of Debentureholders that Debentures
Subordinate to All Senior Indebtedness........................... 97
Section 13.2. Company Not to Make Payment with Respect to
Debentures in Certain Circumstances.............................. 98
Section 13.3. Debentures Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution,
Liquidation or Reorganization of the
Company.......................................................... 99
Section 13.4. Debentureholders to be Subrogated to Right of
Holders of Senior Indebtedness................................... 101
Section 13.5. Obligations of Company Unconditional...................................... 101
Section 13.6. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice.................................. 102
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Section 13.7. Application by Trustee of Monies Deposited................................ 103
Section 13.8. Subordination Rights Not Impaired......................................... 104
Section 13.9. Trustee to Effectuate Subordination....................................... 104
Section 13.10. Rights of Trustee as Holder of Senior Indebtedness........................ 105
Section 13.11. Article Thirteen Not to Prevent Event of Default.......................... 105
ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
DEPOSITED MONEYS
Section 14.1. Satisfaction and Discharge of Indenture................................... 105
Section 14.2. Application by Trustee of Funds Deposited for
Payment of Debentures............................................ 107
Section 14.3. Repayment of Moneys Held by Paying Agent......................... 107
Section 14.4. Moneys Deposited for Redemption of Debentures
Subsequently Converted to be Returned to
Company.......................................................... 107
Section 14.5. Payment of Deposited Money to Company After Lapse
of Time.......................................................... 108
108
ARTICLE XV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 15.1. Immunity of Incorporators, Stockholders, Officers
and Directors.................................................... 108
ARTICLE XVI
RIGHT TO REQUIRE REPURCHASE
109
viii
Section 16.1. Right to Require Repurchase............................................... 109
Section 16.2. Notice; Method of Exercising
Repurchase Right 110
Section 16.3. Deposit of Repurchase Price............................................... 112
Section 16.4. Debentures Not Repurchased on Repurchase Date............................. 112
Section 16.5. Debentures Repurchased in Part............................................ 112
Section 16.6. Purchase of Warrants...................................................... 113
ARTICLE XVII
MISCELLANEOUS PROVISIONS
113
Section 17.1. Successors and Assigns of Company Bound by
Indenture........................................................ 113
Section 17.2. Acts of Board, Committee or Officer of Successor
Corporation Valid................................................ 113
Section 17.3. Surrender of Powers by Company............................................ 113
Section 17.4. Required Notices or Demands May be Served by Mail......................... 114
Section 17.5. Indenture and Debentures to be Construed in
Accordance with Laws of State of New York........................ 114
Section 17.6. Officers' Certificate and Opinion of Counsel to
be Furnished upon Applications or
Demands by Company............................................... 114
Section 17.7. Payments Due on Non-Business Days......................................... 116
Section 17.8. Effect of Invalidity of Provisions........................................ 116
Section 17.9. Execution of Counterparts................................................. 116
EXHIBIT A FORM OF REGISTERED DEBENTURE
ix
INDENTURE, dated as of June 24, 1996, between Palomar Medical
Technologies, Inc. (the "Company"), a Delaware corporation having its principal
office at 00 Xxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, and American Stock
Transfer & Trust Company, a New York corporation, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company is empowered to issue debentures for any
of the objects and purposes of the Company;
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the creation of an issue of its 4.5% Convertible Subordinated
Debentures due 2003 (the "Debentures") of substantially the same tenor and
amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, all acts and things necessary to be done by the
Company to make the Debentures, when executed by the Company and authenticated
and delivered hereunder and duly issued by the Company upon payment therefor by
the purchasers thereof, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, respectively have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Debentures are
and are to be authenticated, issued and delivered, and for and in consideration
of the premises and the purchase of the Debentures by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Debentures as follows:
1
I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
I.1. Definitions.
"Additional Payments" has the meaning specified in Section
2.2(b).
"Affiliate" means, when used with reference to any specified
Person, any other Person directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such specified Person. For the
purposes of this definition, "control" when used with respect to any Person
means the power to direct or cause the direction of the management or policies
of such Person, directly or indirectly, whether through the ownership or voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative of the foregoing.
"Agent" has the meaning specified in Section
2.6.
"Antidilution Factor" means a number that is initially equal
to one and that may be adjusted from time to time as provided in Section 4.5.
"Authorized Newspaper" means, so long as the Debentures are
listed on a securities exchange and such exchange so requires, a newspaper
published in the city in which such securities exchange is located; provided
that for so long as the Debentures are listed on the Luxembourg Stock Exchange,
"Authorized Newspaper" shall include the Luxembourg Wort; provided, further,
that if, because of temporary or permanent suspension of publication or general
circulation of any newspaper or for any other reason, it is impossible or, in
the opinion of the Trustee, impracticable to make reasonable publication of any
notice required herein in a newspaper published in the city in which the
securities exchange is located, then "Authorized Newspaper" shall mean any
publication in an English language newspaper of general circulation.
2
"Bankruptcy Code" means the Bankruptcy Code of 1978, as
amended (11 U.S.C. 101 et seq.).
"Board of Directors" means the Board of Directors of the
Company or any duly authorized committee of such Board of Directors.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions are authorized or obligated by law,
executive order or regulation to close, in the Borough of Manhattan, The City of
New York and, with respect to any payment on the Debentures, if there is a
Paying Agent in Luxembourg, in Luxembourg and, with respect to any other place
of payment, in such other place of payment.
"Capitalized Lease Obligations" means, with respect to any
Person, any Indebtedness of such Person represented by obligations under a lease
or other rental agreement that are required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
for purposes hereof shall be the capitalized amount of such obligations as
determined in accordance with GAAP on a consolidated basis.
"Change of Control" has the meaning specified in Section 16.1.
"Closing Price" for any day means the last reported sale price
of the Common Stock, regular way, on such day or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way, on such day, in either case on the New York Stock Exchange
or, if the Common Stock is not listed or admitted to trading on such Exchange,
on the principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if not listed or admitted to trading on any
national securities exchange, on the Nasdaq National Market System or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange or quoted on such National Market System, the average of the closing
bid and asked prices in the over-the-counter market as furnished by any
3
New York Stock Exchange member firm selected from time to time by the Company
for that purpose. If the Common Stock is not listed or admitted to trading on
any national securities exchange, quoted on such National Market System or
listed in any list of bid and asked prices in the over-the-counter market,
"Closing Price" shall mean the fair market value of the Common Stock as
determined in good faith by the Board of Directors of the Company.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" or "Shares" means the Common Stock, $.01 par
value, of the Company as presently authorized by its Certificate of
Incorporation or any other stock of the Company into which such Common Stock may
hereafter be changed from time to time.
"Company" means the Person named as such in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Conversion Percentage Factor" has the meaning
specified in Section 4.2.
"Company Conversion Price" has the meaning specified in
Section 4.2.
"Continuing Director" means at any date a member of the Board
of Directors who (i) was a member of the Board of Directors for the period of 24
months prior to such date or (ii) was nominated for election or elected to the
Board of Directors with the affirmative vote of at least two-thirds of the
Continuing Directors.
"Contractual Obligation" of any Person means any provision of
any agreement, instrument, Security or under-
4
taking to which such Person is a party or by which it or any of the property
owned by it is bound.
"Conversion Agent" has the meaning specified in Section 2.6.
"Conversion Notice" has the meaning specified in Section 4.3.
"Conversion Price" means Holder Conversion Price and Company
Conversion Price, as applicable.
"Debenture Conversion Shares" has the meaning specified in
Section 4.1
"Debentures" has the meaning specified in the first recital of
this Indenture and more particularly means any of the Debenture authenticated
and delivered under this Indenture.
"Default" means any event, act or condition the occurrence of
which is, or after notice or the passage of time or both would be, an Event of
Default.
"Dollar," "U.S.$," "United States dollar" or the sign "$"
means a Dollar or other equivalent unit in such coin or currency of the United
States as at the time shall be legal tender for the payment of public and
private debts.
"Event of Default" has the meaning specified in Section 7.1.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended from time to time, and the rules and regulations promulgated
thereunder, and any successor statute thereto.
"Exchange Rate Factor" has the meaning specified in Section
4.1.
"Existing Control Group" means the Principal Shareholders as
of the date of this Indenture.
5
"GAAP" means generally accepted accounting principles set
forth in the opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board or such other statements by any such
other entity as may be approved by a significant segment of the accounting
profession in the United States, and which are applicable to the circumstances
as of the date of this Indenture.
"Guaranty" means any contractual obligation, contingent or
otherwise, of a Person with respect to any Indebtedness or other obligation or
liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or any agreement to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make any
payment other than for value received.
"Holder," "Debentureholder," "holder of Debentures" or other
similar terms mean any Person that is the registered holder of any Debenture on
the books of the Company.
"Holder Conversion Price" has the meaning specified in Section
4.1.
"Indebtedness" means (i) any liability of any Person (A) for
borrowed money, or (B) evidenced by a note, debenture or similar instrument
(including a purchase money obligation and a letter of credit) whether issued in
connection with the acquisition of any property, assets (other than inventory or
similar property acquired in the ordinary course of business) or
6
ties, or otherwise, (ii) Capitalized Lease Obligations of any Person, (iii) any
Guaranty of any liability of others described in the preceding clause (i) or
(ii), and (iv) any amendment, renewal, extension or refunding of any liability
of the types referred to in clauses (i), (ii) and (iii) above.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Independent Director" means a Person serving as a member of
the Board of Directors who is not an officer or employee of the Company or a
Subsidiary or owner, directly or through an Affiliate of such Person, of in
excess of 5% of the outstanding Common Stock of the Company or a Subsidiary or
who has a relationship with the Company or a Subsidiary that would interfere
with the exercise of independent judgment in carrying out the responsibilities
of a Director, including, without limitation, any Person who is a party directly
or indirectly to a material agreement or transaction or series of transactions
with the Company or a Subsidiary.
"Initial Closing Date" means the first date on which the
offering of Debentures is closed.
"Interest Expense" means, for any period and for any Person,
the total interest expense of such Person and its Subsidiaries for such period,
including, without limitation, interest expense attributable to Capitalized
Lease Obligations in accordance with GAAP, all capitalized interest, all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptance financing, and total interest expense, whether shown as interest
expense, all as determined on a consolidated basis in accordance with GAAP.
7
"Interest Payment Date" has the meaning specified in Section
2.2.
"Lien" means any mortgage, pledge, security interest, security
deposit, encumbrance, lien or charge of any kind, including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any applicable
jurisdiction.
"Luxembourg Stock Exchange" means the Bourse de Luxembourg.
"Noon Buying Rate" means the exchange rate for one U.S. dollar
expressed in Swiss Francs, based upon the noon buying rate in New York City for
cable transfers in Swiss Francs, as certified for customs purposes by the
Federal Reserve Bank of New York.
"Offering Memorandum" means the final Offering Memorandum
dated June 24, 1996 pursuant to which the Debentures were initially offered and
sold.
"Officer" means the Chairman of the Board of Directors, the
President, any Vice President, the Chief Executive Officer, the Chief Financial
Officer, or the Treasurer of the Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and the Secretary, an Assistant Treasurer or an
Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion from independent
legal counsel who is acceptable to the Trustee.
"Outstanding" means, with respect to the Debentures as of the
date of determination, all Debentures theretofore authenticated and delivered
under this Indenture, except:
8
(i) Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Debentures, or portions thereof, for whose payment money
or securities in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Debentures; provided that, if such Debentures are
to be redeemed (as provided in Article Three), notice of such redemption has
been duly given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and
(iii) Debentures in exchange for or in lieu of which other
Debentures have been authenticated and delivered pursuant to this Indenture;
provided that in determining whether the Holders of the requisite principal
amount of Outstanding Debentures have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Debentures owned by the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon such request, demand, authorization, direction, notice, consent
or waiver, only Debentures that the Trustee knows to be so owned shall be so
disregarded. Debentures so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Debentures and that
the pledgee is not the Company or any Affiliate of the Company.
"Paying Agent" has the meaning specified in Section 2.6.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
9
"Predecessor Debenture" of any particular Debenture means
every previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.9 in
exchange for or in lieu of a mutilated, lost, destroyed or stolen Debenture
shall be deemed to evidence the same debt as the mutilated, lost, destroyed or
stolen Debenture.
"Principal Shareholders" means all Persons who are both (x)
members of, or enjoy representation on, the Board of Directors as of the date of
this Indenture, and (y) as of the date or this Indenture are the ultimate
beneficial owners of shares of the Company's Common Stock, until such time as
such Persons, together, cease to have beneficial ownership of at least 25% of
the combined voting power of the Voting Stock of the Company.
"Record Date" has the meaning specified in Section 2.2(a).
"Register" has the meaning specified in Section 2.8.
"Registrar" has the meaning specified in Section 2.6.
"Regulation S" means Regulation S under the Securities Act and
any successor regulation thereto.
"Requirement of Law" for any Person means the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" means, with respect to the Trustee, the
chairman or vice-chairman of the board of directors or trustees, the chairman of
the executive committee, the chairman of the trust committee, the presi-
10
dent, any vice-president, the secretary, the treasurer, any trust officer, the
cashier, any second or assistant vice-president, any assistant trust officer,
any assistant secretary, any assistant treasurer, any assistant cashier, or any
other officer or assistant officer of the Trustee customarily performing such
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"Reset Date" has the meaning specified in Section 4.1.
"Securities Act" means the United States Securities Act of
1933, as amended, and any successor statute.
"Security" shall have the same meaning as in Section 2(1) of
the Securities Act.
"Senior Indebtedness" means all loans, advances, reimbursement
obligations regarding letters of credit, liabilities, covenants and duties
existing on the date hereof or arising from time to time hereafter and renewals,
extensions and refundings of any such indebtedness, that are secured, whether
for principal, premium or interest or otherwise, of the Company to any bank or
other lending institution, whether direct or indirect, absolute or contingent,
due or to become due, including, without limitation, (a) any debt, liability or
obligation owing from the Company to others which such bank or other lending
institution may have obtained by assignment, pledge, purchase, or otherwise, (b)
any overdraft or overadvance to the Company, and (c) all interest, charges,
expenses and attorney's fees for which the Company is now or hereafter becomes
liable to any such bank or other lending institution under any agreement or by
law; unless the instrument or instruments creating, evidencing or securing any
such indebtedness or pursuant to which the same is outstanding, provide that
such indebtedness is not superior in right of payment to the Debentures.
"Sinking Fund Payment Date" has the meaning specified in
Section 3.6 (a).
11
"Sinking Fund Redemption Price" has the meaning specified in
Section 3.6 (a).
"Stock Price Factor" has the meaning specified in Section 4.1.
"Subsidiary" means, with respect to any Person, (i) any
corporation of which 50% of more of the combined voting power of the outstanding
Voting Stock is owned, directly or indirectly, by such Person or by one or more
other Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof or (ii) any other Person (other than a corporation) in which such
Person, or one or more other Subsidiaries of such Person or such Person and one
or more other Subsidiaries thereof, directly or indirectly, has at least a
majority ownership and power to direct the policies, management and affairs
thereof. Unless otherwise specified, "Subsidiary" means a Subsidiary of the
Company.
"Swiss Franc" or the abbreviation "SF" means a Swiss Franc or
other equivalent unit in such coin or currency of Switzerland as at the time
shall be legal tender for the payment of public and private debts.
"Taxes" means any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including, without limitation income, gross receipts, excise, property,
sales, transfer, license, payroll, withholding, social security, and franchise
taxes, now or hereafter imposed or levied by the United States of America or any
state, local or foreign government or by any department, agency or other
political subdivision or taxing authority thereof or therein and all interest,
penalties, additions to tax and other similar liabilities with respect thereto.
"Total Liabilities" means, as of any date, the amount at which
all of the liabilities of such Person should be shown in accordance with GAAP on
a balance sheet of such Person at such date, all as determined on a consolidated
basis.
12
"Trust Indenture Act" means the United States Trust Indenture
Act of 1939 including any successor act thereto, as it may be amended from time
to time, and includes the rules and regulations of the Commission thereunder.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
A "Unit" consists of SF 1,000 principal amount of Debentures
and 24 Warrants.
"United States" means the United States of America (including
the States thereof and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
"United States Alien" means any Person who, as to the United
States, is a foreign corporation, a non-resident alien individual, a
non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, as to the United States, a
foreign corporation, a non-resident alien individual or a non-resident alien
fiduciary of a foreign estate or trust.
"United States Person" means (1) any natural person resident
in the United States, (2) any partnership or corporation organized or
incorporated under the laws of the United States, (3) any estate of which any
executor or administrator is a United States Person, (4) any trust of which any
trustee is a United States Person, (5) any agency or branch of a foreign entity
located in the United States, (6) any non-discretionary account or similar
account (other than an estate or trust) held by a dealer or other fiduciary
organized, incorporated or (if an individual) resident in the United States and
(7) any partnership or corporation if (i) organized or incorporated under the
laws of any foreign jurisdiction and (ii) formed by a United States Person
principally for the purpose of investing in securities not registered under the
Securi-
13
ties Act, unless it is organized or incorporated, and owned, by accredited
investors (as defined in Rule 501(a) of the Securities Act) who are not natural
persons, estates or trusts.
"Voting Stock" means the securities of any class or classes of
a corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors of such
corporation or Persons performing similar functions.
"Warrant" means the nondetachable security issued pursuant to
a Warrant Agreement, dated as of June 24, 1996, between the Company and American
Stock Transfer & Trust Company and offered in lots of 24 Warrants per Unit, that
entitles the holder to purchase one share of Common Stock per Warrant.
I.2. Trust Indenture Act.
This Indenture has not been registered under, and is not
subject to any of the protections of, the Trust Indenture Act of 1939.
I.3. Rules of Construction.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the
meanings assigned to them in this Article, and include the plural as well as the
singular;
(2) or is not exclusive;
(3) all other terms used herein which are defined in
the Trust Indenture Act, or which are by reference in such Act defined in the
Securities Act, have the meanings assigned to them therein;
(4) all accounting terms not otherwise defined herein
have the meaning assigned to them in accordance with GAAP;
14
(5) unless the context otherwise requires, any
reference to an "Article" or a "Section" refers to an Article or a Section, as
the case may be, of this Indenture;
(6) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(7) provisions apply to successive events and
transactions.
II
FORM OF DEBENTURES
II.1. Title and Terms.
The Debentures shall be designated as 4.5% Subordinated
Convertible Debentures due 2003 and shall not exceed the aggregate principal
amount of Twenty-Five Million Swiss Francs (SF 25,000,000).
The Debentures shall be issued as part of Units, each
consisting of SF 1,000 principal amount of Debentures and 24 Warrants. A minimum
of 10,000 Units and a maximum of 25,000 Units shall be offered.
II.2. Date of Debentures and Denomi
nations; Payment of Interest.
(a) Denominations and Payment Generally.
The Debentures shall be issuable in fully registered, certificated
form, without coupons, in denominations of SF 1,000 and any integral multiples
thereof.
The Debentures shall be dated as of the date of authentication
and shall bear interest at the rate of 4.5% per annum, payable quarterly in
arrears on March 31, June 30, September 30 and December 31 in each year (each an
15
"Interest Payment Date"), commencing on September 30, 1996, to the Holders
thereof as of the March 15, June 15, September 15 or December 15, as the case
may be, next preceding such Interest Payment Date (each, a "Record Date").
The interest on the Debentures shall be computed on the basis
of a 360-day year of twelve 30-day months and in any case where the date for any
payment on the Debentures is not a Business Day, such payment may be made on the
next succeeding Business Day and have the same force and effect as if made on
such original payment date, and no interest shall accrue for the period from and
after such original payment date. The principal, or premium, if any, and
interest on the Debentures shall be payable in Swiss Francs. At the option of
the Company, payment of interest may be made by check mailed to the address of
the person entitled thereto as such address shall appear in the Register.
The Person in whose name any Debenture is registered at the
close of business on the Record Date with respect to an Interest Payment Date
shall be entitled to receive the interest payable on such interest payment date
notwithstanding the cancellation of such Debenture upon any transfer, exchange
or conversion thereof subsequent to such Record Date and prior to such Interest
Payment Date; provided that if and to the extent the Company shall default in
the payment of the interest due on such Interest Payment Date, such defaulted
interest shall be paid to the persons in whose names the Debentures are
registered on a subsequent record date established by notice given by mail by or
on behalf of the Company to the Holders of Debentures not less than 15 days
preceding such subsequent record date, such Record Date to be not less than five
days preceding the date of payment of such defaulted interest. Notwithstanding
the foregoing, such defaulted interest may be paid at any time in any other
lawful manner not inconsistent with the terms of the Debentures or the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange.
If any Debenture or portion thereof is called for redemption
on a redemption date after the close of
16
business on the Record Date preceding an Interest Payment Date and notice of
such redemption has been mailed and funds for such redemption have been duly
provided, interest accrued to the redemption date on such Debenture or portion
so called shall be paid only against surrender of the Debenture for redemption
in accordance with said notice.
(b)Additional Payments. Subject to the Company's rights as set
forth in Section 3.1(b), the Company shall pay to any "United States Alien"
certain customary additional amounts in the event of changes in the United
States income tax laws affecting withholding taxes on payments under the
Debentures ("Additional Payments"), in order that every new payment of principal
and interest on such Debenture, after deduction or withholding for or on account
of any present or future tax, assessment or governmental charge imposed upon or
as a result of such payment by the government of the United States or any state
thereof or by any authority or agency thereof shall not be less that the amount
provided for in such Debenture to be then due and payable, subject to certain
customary exceptions. The Company shall provide customary indemnification for
Holders affected by the foregoing.
If the Company is required to make additional payments to
Holders thereof by reason of deductions or withholdings for or on account of any
taxes, assessments or other governmental charges (the "withholding taxes"), the
Company shall deliver to the Trustee for delivery to the Holders at the time of
any such payment a statement specifying the amount of taxes so paid by the
Company as additional interest. The Company covenants that if the Company or the
Trustee is required by law to make any deduction or withholding on payments of
principal of or interest on the Debentures for or on account of any withholding
taxes, the Company shall furnish to the Trustee and the Paying Agent, at least
five Business Days prior to the date on which the first payment of principal or
interest is due with respect to the Debentures as to which such deduction or
withholding applies (and at least five Business Days prior to each date of
payment of principal or interest thereafter if there has been any change with
respect to the matters set forth in the below-mentioned
17
certificate), a certificate of an Officer of the Company giving instructions as
to whether payment of the amounts due on such date shall be made without any
such deduction or withholding and specifying the amount, if any, so required to
be deducted or withheld and certifying that the Company shall pay such deduction
or withholding; the Company shall, prior to the due date for the payment
thereof, pay any such withholding tax, together with any penalties or interest
applicable thereto; and within 15 days after paying such withholding tax,
penalties or interest, the Company shall deliver to the Trustee the evidence of
such payment and of the remittance thereof to the relevant taxing or other
authority. In the absence of any such certification, the Trustee and the Paying
Agent shall make payments to Holders of Debentures and coupons without deduction
or withholding.
The Company hereby agrees to indemnify the Trustee and the
Paying Agent for, and to hold them harmless against, any loss, liability or
expense reasonably incurred without negligence or bad faith on their part,
arising out of or in connection with actions taken or omitted by either of them
in reliance on any certificate furnished pursuant to this Section 2.2(b) or the
failure of the Trustee for any reason (other than its own negligence or willful
misconduct) to receive on a timely basis such Officer's certificate or any
information or documentation requested by it or otherwise required by applicable
law or regulations to be obtained, furnished or filed in respect of withholding
tax pursuant to the first paragraph of this Section 2.2(b). Any Officer's
certificate required by this Section 2.2(b) to be provided to the Trustee shall
be deemed to be duly provided if telecopied to the Trustee.
II.3 Ranking of Debentures.
The Debentures shall constitute general unsecured obligations
of the Company and shall be subordinated as provided in Article XIII.
II.4 Execution and Authentication of Debentures.
18
The Debentures shall be signed on behalf of the Company by, or
bear the facsimile signature of its Chairman or President, under its corporate
seal. Such facsimile signatures may be imprinted or otherwise reproduced on the
Debentures. In case any officer of the Company who shall have signed any
Debenture shall cease to be such officer before the Debenture so signed shall
have been authenticated and delivered by the Trustee or disposed of the Company,
such Debenture nevertheless may be authenticated and delivered or disposed of as
though the person who signed the Debenture had not ceased to be such officer of
the Company. The seal of the Company may be in the form of a facsimile of the
seal of the Company and may be impressed, affixed, imprinted or otherwise
reproduced on the Debentures.
Only such Debentures as shall bear thereon a certificate of
authentication substantially in the form set forth in Exhibit A to this
Indenture, executed by the Trustee, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Debenture executed by the Company shall be conclusive evidence
that the Debenture has been duly authenticated and delivered hereunder and that
the Holder is entitled to the benefits of this Indenture.
The Trustee shall, upon receipt of an Officer' Certificate
directing it do so, authenticate Debentures for original issue up to an
aggregate principal amount as stated in Section 2.1. The aggregate principal
amount of Debentures outstanding at any time may not exceed such amount, except
as otherwise provided in this Indenture.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Debentures. An authenticating agent may authenticate
Debentures whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
19
Unless otherwise specifically provided herein or in the
Debentures, any order, certificate, notice, request, direction or other
communication from the Company made or given by the Company under any provision
of this Indenture shall be sufficient if signed by an Officer of the Company.
II.5. Form of Debentures and Trustee's Certificate.
The Debentures and the Trustee's certificate of authentication
shall be engraved, lithographed or printed, and shall be substantially as set
forth in Exhibit A to this Indenture and made a part hereof and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Debentures may be listed, or to conform to usage.
II.6. Registrar, Paying Agent, and Conversion Agent.
The Company shall maintain an office or agency where the
Debentures may be presented for registration of transfer or for exchange (the
"Registrar"), an office or agency where Debentures may be presented for payment
(the "Paying Agent"), and an office where Debentures may be presented for
conversion (the "Conversion Agent"). The Registrar shall keep a register of the
Debentures and of their transfer and exchange. The Company may appoint one or
more co-registrars, one or more additional paying agents, and one or more
additional conversion agents. The term "Paying Agent" includes any additional
paying agent and the term "Conversion Agent" includes any additional conversion
agent.
The Registrar, the Paying Agent, and the Conversion Agent are
sometimes referred to herein as the "Agents." The Agents have the powers and
authority grant-
20
ed to and conferred upon them herein and in the Debentures and such further
powers and authority, acceptable to them, as the Company may hereafter
respectively grant to or confer upon them. The Company reserves the right to
vary or terminate the appointment of the Registrar or any Conversion or Paying
Agent, or to appoint additional or other registrars or conversion or paying
agents, or to approve any change in the office through which the Registrar or
any such agent acts, provided that there shall at all times be a Registrar in
New York City and a Paying Agent and Conversion Agent in one or more European
cities which, so long as the Debentures are listed on the Luxembourg Stock
Exchange and so long as the Luxembourg Stock Exchange so requires, shall include
Luxembourg.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. Such agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent, or Conversion Agent,
the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar. The
Company has initially appointed Banca Commerciale Lugano as Paying Agent and
Conversion Agent for the purposes set forth in this Indenture. The Paying Agent
and Conversion Agent in acting hereunder shall be subject at all times and in
all respects to the directions of the Trustee, subject to and in accordance with
applicable laws, and shall be responsible solely to the Trustee. The Paying
Agent and Conversion Agent may resign and be discharged from its duties
hereunder by notice of such resignation delivered to the Company at least 60
days prior to the date on which such resignation is to become effective. The
Company shall, promptly after receiving such notice, appoint a substitute paying
agent and conversion agent which shall thereafter be the Paying Agent and
Conversion Agent hereunder. Whenever the Company in its discretion determines
that it is in the best interest of the Holders to do so, it may appoint a
substitute paying agent and conversion agent, which shall thereafter be the
Paying Agent and Conversion Agent hereunder. Each such
21
substitute paying agent and conversion agent shall deliver to the Company
forthwith upon its appointment an acceptance of such appointment satisfactory in
form and substance to the Company. Immediately upon any such change, the Company
shall inform the Trustee, which shall thereafter cause prompt notice thereof in
writing to be provided to all Holders.
Upon the appointment of any successor trustee hereunder, the
Paying Agent and Conversion Agent then acting hereunder shall forthwith become,
without any further act or writing, subject to the direction of such successor
trustee and the appointment of such successor trustee shall in no way impair the
authority of the Paying Agent and Conversion Agent hereunder; but the successor
trustee so appointed shall, nevertheless, on the written request of the Paying
Agent and Conversion Agent, execute and deliver to the Paying Agent and
Conversion Agent all such instruments as may be proper to give to the Paying
Agent and Conversion Agent full and complete power and authority as agent
hereunder of such successor trustee.
Each of the Agents shall be obligated to perform such duties
and only such duties as are herein and in the Debentures specifically set forth
and as are required by applicable law and no implied duties or obligations shall
be read into this Indenture or the Debentures against the Agents. Upon notice to
the Company, none of the Agents shall be under any obligation to take any action
hereunder which may tend to involve them in any expense or liability, the
payment of which within a reasonable time is not, in their reasonable opinion,
assured to them.
22
II.7. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that, subject to Article XIII, the Paying Agent
shall hold in trust for the benefit of Holders or the Trustee all money held by
the Paying Agent for the payment of principal of or interest on the Debentures,
and shall notify the Trustee of any default by the Company or any other obligor
upon the Debentures in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company) shall have no further liability for the money. If
the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold as
a separate trust fund all money held by it as Paying Agent.
23
II.8. Exchange, Registration and Transfer of Debentures.
The Company shall keep, or cause to be kept, at the office or
agency to be maintained by the Company as provided in Section 2.6, a "Register"
or "Registers" in which, subject to such reasonable regulations as it may
prescribe, it shall register all Debentures and transfers and exchanges of
Debentures. The Registrar shall keep records of the Debentures at its office in
New York City, which records shall indicate the dates on which any Debentures
have been redeemed or otherwise paid, canceled or, in the case of mutilated,
defaced, destroyed, stolen or lost Debentures, replaced and the dates on which
interest on Debentures has been paid. Upon surrender at such office or agency of
any Debentures for registration of transfer, the Company shall execute and
register and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Debenture or Debentures for the same aggregate
principal amount, and no registration of transfer of any Debentures shall be
valid as against the Company or the Trustee unless made at such office or
agency.
The authorized denominations of Debentures shall be
interchangeable in equal aggregate principal amounts. Debentures to be exchanged
shall be surrendered at the office or agency to be maintained by the Company for
the purpose as provided in Section 2.6, and the Company shall execute and
register and the Trustee shall authenticate and deliver in exchange therefor the
Debenture or Debentures that the Holder making the exchange shall be entitled to
receive.
The Registrar may decline to effect any exchange or transfer
of Debentures during the period of 15 days preceding the due date for any
payment of principal of, or premium, if any, or interest on, the Debentures or
the redemption of the Debentures.
The Debentures have not been registered under the Securities
Act in reliance upon Regulation S.
24
Each Debenture issued under this Indenture (and all Debentures
issued under the transfer thereof, in exchange therefor or in substitution
thereof) shall bear a legend in substantially the following form:
THE DEBENTURE(S) REPRESENTED HEREBY ARE EACH PART OF A NONDETACHABLE UNIT, EACH
UNIT CONSISTING OF ONE SF 1,000 PRINCIPAL AMOUNT 4.5% CONVERTIBLE SUBORDINATED
DEBENTURE AND 24 COMMON STOCK PURCHASE WARRANTS. SAID DEBENTURE AND WARRANTS MAY
NOT BE TRANSFERRED OR TRADED SEPARATELY, AND ANY PURPORTED TRANSFER OF EITHER OF
SUCH SECURITIES SEPARATELY FROM THE OTHER SHALL BE VOID AND SHALL NOT BE
RECORDED ON THE BOOKS AND RECORDS OF THE COMPANY. DEBENTURES MAY ONLY BE
CONVERTED IN THEIR ENTIRETY; AND EACH DEBENTURE TO BE CONVERTED MUST BE
ACCOMPANIED BY THE RELATED 24 WARRANTS FOR EXERCISE OR CANCELLATION IN
ACCORDANCE WITH THE TERMS THEREOF.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO
REGULATION S, AN EXEMPTION FROM REGISTRATION PURSUANT TO THE PROVISIONS UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THESE SECURITIES MAY NOT BE TRANSFERRED, OFFERED OR SOLD PRIOR TO THE END OF THE
FORTY (40)-DAY PERIOD (THE "RESTRICTED PERIOD") COMMENCING ON THE LATER OF (I)
THE DATE THE SECURITIES ARE FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS
DEFINED IN REGULATION S) OR (II) THE DATE OF THE FINAL CLOSING OF THE OFFERING
OF THE SECURITIES BY THE COMPANY, UNLESS SUCH TRANSFER, OFFER OR SALE (I) IS
MADE IN AN "OFFSHORE TRANSACTION" AND NOT TO A "U.S. PERSON" (OTHER THAN A
"DISTRIBUTOR") (AS SUCH TERMS ARE DEFINED IN REGULATION S) OR (II) IS MADE
PURSUANT TO REGISTRATION OR AN APPLICABLE EXEMPTION UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE SOLD EXCEPT PURSUANT TO
THE TERMS AND CONDITIONS OF THE OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
BETWEEN THE COMPANY AND THE INITIAL HOLDER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY.
BY REQUESTING THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
AFTER THE RESTRICTED PERIOD, THE HOLDER OF THIS CERTIFICATE REPRESENTS THAT IF
SUCH TRANSFER IS MADE TO A U.S. PERSON, THAT AT THE TIME OF SUCH TRANSFER
25
THE HOLDER IS NOT AN "AFFILIATE" OF THE COMPANY (AS SUCH TERM IS DEFINED IN THE
SECURITIES ACT) OR AN "UNDERWRITER" OR "DEALER" (AS SUCH TERMS ARE DEFINED IN
THE SECURITIES ACT), HAS NOT ENGAGED IN ANY SHORT SALES OR SIMILAR HEDGE
TRANSACTIONS WITH RESPECT TO THE COMPANY'S SHARES OF COMMON STOCK DURING THE
RESTRICTED PERIOD, IS NOT A "DISTRIBUTOR" AND SUCH TRANSFER IS NOT BEING MADE AS
PART OF A PLAN OR SCHEME TO EVADE THE REGISTRATION PROVISIONS OF THE SECURITIES
ACT.
All Debentures presented or surrendered for registration of
transfer or exchange, shall (if so required by the Company or the Trustee) be
duly endorsed by, or be accompanied by written instrument or instruments of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the registered Holder or his attorney duly authorized in writing.
For any exchange or registration of transfer of Debentures,
the Company, at its option, may require the payment of a sum sufficient to
reimburse it for any tax or other governmental charge that may be imposed in
relation thereto. No service charge shall be made for any such transaction.
II.9. Mutilated, Destroyed, Lost or Stolen Debentures.
In case any Debenture shall become mutilated or be destroyed,
lost or stolen, the Company in its discretion may execute, and upon its request
the Trustee shall authenticate and deliver, a new Debenture, bearing a number
not contemporaneously outstanding, in exchange and substitution for the
mutilated Debenture or in lieu of and substitution for the Debenture so
destroyed, lost or stolen.
In every case, the applicant for a substituted Debenture shall
furnish to the Company and to the Trustee such security or indemnity as may be
required by them to save each of them, and, if requested, any Paying Agents, any
Conversion Agents and Debenture Registrars of the Company, harmless from all
risk, and the applicant shall also furnish to the Company and to the Trustee
evidence to
26
their satisfaction of the mutilation, destruction, loss or theft of the
applicant's Debenture and of the ownership thereof. Upon the issuance of any
substituted Debenture, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses, including counsel fees, of the Company, the
Trustee, and any Paying Agent, any Conversion Agent or Debenture Registrar,
connected therewith.
In case any Debenture, the principal amount of which has
become due and payable, shall become mutilated or be destroyed, lost or stolen,
the Company may, instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Debenture) if the applicant for such payment shall furnish to the Company and
the Trustee such security or indemnity as it may require to save it harmless,
and evidence to the satisfaction of the Company of the mutilation, destruction,
loss or theft of such Debenture and of the ownership thereof.
Every Debenture issued pursuant this Section 2.9 in
substitution for any Debenture that is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Debenture shall be found at any time, or be
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debentures duly
issued hereunder. All Debentures shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debentures and
shall preclude any and all other rights or remedies, notwithstanding any law or
statute existing or hereinafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
II.10. Cancellation of Surrendered Debentures.
All Debentures surrendered for the purpose of payment,
redemption, conversion, exchange or transfer, in
27
whole or in part, shall be canceled and delivered to the Trustee, or, if
surrendered to the Trustee, shall be canceled by it, and no Debentures shall be
issued in lieu thereof except as expressly required or permitted by any of the
provisions of this Indenture. On request of the Company, the Trustee shall
deliver to the Company canceled Debentures held by the Trustee. With the consent
of the Company, the Trustee may destroy canceled Debentures and deliver a
certificate of destruction to the Company. If the Company shall acquire any of
the Debentures, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debentures unless and until
the same are canceled and delivered to the Trustee or surrendered to the Trustee
for cancellation.
II.11. Provisions of Indenture and Debentures for Sole
Benefit of Persons Identified.
Nothing in this Indenture or in the Debentures, expressed or
implied, shall give or be construed to give to any Person other than the parties
hereto, the Conversion Agent, the Paying Agent, the Registrar, the Holders of
the Debentures and, to the extent provided in Article XIII hereof, the holders
of Senior Indebtedness, any legal or equitable right, remedy or claim under or
in respect of this Indenture, or under any covenant, condition or provision
herein contained, all of covenants, conditions and provisions herein being for
the benefit of the parties hereto, the Conversion Agent, the Paying Agent, the
Registrar, the Holders of the Debentures and, to the extent provided in Article
XIII hereof, the holders of Senior Indebtedness.
II.12. Temporary Debentures.
Pending the preparation of definitive Debentures, the Company
may execute, and upon written order of the Company the Trustee shall
authenticate and deliver, temporary Debentures that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Debentures in lieu of which they
are issued and
28
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Debentures may determine, as evidenced by their
execution of such Debentures.
If temporary Debentures are issued, the Company shall cause
definitive Debentures to be prepared without unreasonable delay. After the
preparation of definitive Debentures, the temporary Debentures shall be
exchangeable for definitive Debentures upon surrender of the temporary
Debentures at any office or agency of the Company designated pursuant to Section
2.6, without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Debentures the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Debentures of authorized denominations. Until so exchanged the
temporary Debentures shall in all respects be entitled to the same benefits
under this Indenture as definitive Debentures.
II.13. Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in
the office or Trustee, shall appoint, in the manner provided in Section 8.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
III
REDEMPTION OF DEBENTURES
III.1. Debentures Redeemable.
(a)The Debentures may be redeemed by the Company, as a
whole or from time to time in part, at any time on or after the third
anniversary of the Initial Closing Date and prior to maturity or conversion, at
a redemption price equal to 100% of the principal amount to be redeemed plus
accrued and unpaid interest to the date fixed for redemption.
29
(b)The Debentures may also be redeemed, at any time as a whole
but not in part, at a redemption price equal to 100% of the principal amount
plus accrued and unpaid interest to the date fixed for redemption, if, as a
result of any change in or amendment to the laws, regulations or published tax
rulings of the United States, or any political subdivision or taxing authority
thereof or therein, affecting taxation, or any change in the official
administration, application or interpretation of such laws, regulations or
published tax rulings either generally or in relation to the Debentures, which
change or amendment becomes effective on or after the Initial Closing Date or
which change in official administration, application or interpretation shall not
have been available to the public prior to such date and is notified to the
Company on or after such date, it is determined by the Company that the Company
would be required to pay any Additional Payments pursuant to Section 2.2(b) of
this Indenture or the terms of any Debenture in respect of interest on the next
succeeding Interest Payment Date. At the option of the Company, such redemption
may be paid in cash or by delivery of shares of Common Stock in the manner
described under Article XVI.
III.2. Mailing of Notice of Redemption;
Selection of Debentures in Case Less
Than All Debentures to be Redeemed.
Debentures may be redeemed only in integral multiples of SF
1,000, except to the extent that all remaining Debentures that are outstanding
are redeemed.
Notice of redemption to the Holders of Debentures to be
redeemed, in whole or in part, shall be given by providing prompt notice, not
later than on the thirtieth day before the date fixed for redemption, to such
Holders at their last addresses as they shall appear upon the books of the
Company. Any notice that is provided in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the registered
Holder receives the notice. In any case, failure to duly give notice as
aforesaid, or any defect in the notice, to the Holder of any Debenture
designated for redemption in
30
part, shall not affect the validity of the redemption of any other Debenture.
Each such notice of redemption (i) shall specify the date
fixed for redemption, the aggregate principal amount of Debentures to be
redeemed and the redemption price at which Debentures are to be redeemed, (ii)
shall specify where payment of the redemption price is to be made, upon
presentation and surrender of such Debentures, (iii) shall state that accrued
and unpaid interest to the date fixed for redemption shall be paid as specified
in said notice, that from and after said date interest thereon shall cease to
accrue, and that the right to convert the principal of the Debentures so to be
redeemed shall terminate at the close of business on the date fixed for
redemption, (iv) shall state the then-applicable Holder Conversion Price, (v)
shall state the name and address of the Conversion Agent, (vi) shall state the
date and time as of which the Debentures being redeemed may no longer be
converted pursuant to the Indenture, (vii) shall specify the paragraph of the
Indenture pursuant to which the Debentures are being redeemed, and (viii) shall
state that interest on the Debentures ceases to accrue on and after the
redemption date (unless the Company shall default in the payment of the
redemption price). If less than all the Debentures are to be redeemed, the
notice to the Holders of Debentures to be redeemed shall specify the particular
Debentures to be redeemed. In case any Debenture is to be redeemed in part only,
the notice shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the redemption date, upon surrender
of such Debenture, a new Debenture or new Debentures in principal amount equal
to the unredeemed portion thereof shall be issued. Any notice to a
Debentureholder designating all or a portion of such Holder's Debentures for
redemption may, but need not, specify the serial number of the Debenture or
Debentures to be redeemed, and any failure so to specify or any error in such
specification shall not affect the validity of such designation. If any
Debenture selected for partial redemption is converted in part for shares of
Common Stock before the termination of such conversion right with respect to the
portion of such Debenture so selected, the converted portion of such De-
31
benture shall be deemed (so far as may be) to be the portion selected for
redemption.
The Company shall give the Trustee written notice of any
proposed redemption (or such lesser notice as shall be acceptable to the
Trustee) at least thirty days prior to the date fixed for redemption, which
notice shall set forth the aggregate principal amount of Debentures to be
redeemed. If less than all the Debentures are to be redeemed, the Company, in
its sole discretion, shall select the particular Debentures or parts thereof so
to be redeemed according to such method as the Company shall in its sole
discretion deem fair and appropriate.
On or before the date fixed for redemption, the Company shall
deposit with the Trustee or with a Paying Agent an amount of money sufficient to
pay the redemption price of, and the unpaid and accrued interest, if any, on all
the Debentures that are to be redeemed on such date. The amount of money that
the Company is obligated to deposit with the Trustee pursuant to the preceding
sentence shall be reduced automatically by the amount attributable to any
Debentures or portions thereof that have been called for redemption, repurchased
or converted. Any money that has been deposited with the Trustee for redemption
of Debentures but that is not in fact required for that purpose pursuant to the
foregoing sentence shall (subject to any right of the Debentureholder of such
Debenture or Predecessor Debenture to receive interest as provided in Section
2.2) be promptly repaid to the Company, and discharged from such trust, upon
delivery to the Trustee (unless already in its possession) of such redeemed,
repurchased or converted Debentures for cancellation.
32
III.3.When Debentures Called for Redemption Become Due and
Payable.
If a notice of redemption shall have been given as provided in
Section 3.2, the Debentures or portions of Debentures specified in such notice
shall become due and payable on the date and at the place stated in such notice
at the redemption price, together with accrued and unpaid interest to the date
fixed for redemption, and on and after such date (unless the Company shall
default in the payment of such Debentures or portions thereof at the redemption
price, together with accrued and unpaid interest to the date fixed for
redemption, or unless such Debentures shall be duly surrendered for total or
partial conversion and the Company shall default in the observance of its
covenants in this Indenture contained in regard to such conversion), interest on
the Debentures or portions of Debentures so called for redemption shall cease to
accrue and any right to convert into Common Stock of the Company the principal
of the Debentures or portions of Debentures so called for redemption shall
terminate at the close of business on said date. On presentation and surrender
of such Debentures on or after said date at the place specified in such notice,
such Debentures shall be paid and redeemed by the Company at the applicable
redemption price, together with accrued and unpaid interest to the date fixed
for redemption. Installments of interest due on or prior to the date fixed for
redemption shall continue to be payable to the Holders of such Debentures on the
relevant Record Dates according to their terms and the provisions of Section
2.2.
III.4.Discharge of Company's Obligations Upon Deposit of
Redemption Moneys.
Anything contained in this Indenture to the contrary
notwithstanding, if notice of redemption shall have been given as provided in
Section 3.2, or if provision satisfactory to the Trustee for the giving of such
notice shall have been made, and if the Company shall have deposited with the
Trustee or with any Paying Agent (other than the Company), for the benefit of
the Holders of any
33
of the Debentures called for redemption in whole or in part, funds (to be
immediately available for payment) sufficient to redeem the Debentures to be
redeemed on the date fixed for redemption, at the applicable redemption price,
together with accrued and unpaid interest to the date fixed for redemption, then
all obligations of the Company in respect of such Debentures shall cease and be
discharged (except the obligation to issue shares of Common Stock of the Company
upon conversion of Debentures on or prior to the redemption date in accordance
with the terms of this Indenture and the Debentures), and the Holders of such
Debentures shall thereafter be restricted exclusively to such funds for any and
all claims of whatever nature on their part under this Indenture, or in respect
of such Debentures (except with respect to any rights of conversion as above
stated).
III.5.Issuance of Debentures for Unredeemed Portions of
Debentures.
Upon presentation of any Debenture that is to be redeemed in
part only, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Debenture or
Debentures of authorized denominations in principal amount equal to the
unredeemed portion of the Debenture so presented.
III.6.Sinking Fund
(a) Dates and Amounts of Sinking Fund Payments.
As and for a mandatory sinking fund, the Company covenants and
agrees that it shall pay to the Trustee, not less than one Business Day, on or
before the anniversary of the Initial Closing Date in each of the years 2000 to
2003 (each a "Sinking Fund Payment Date") an amount of money equal to 25% of the
aggregate amount of Debentures originally issued at 100% of their principal
amount together with accrued and unpaid interest thereon to the applicable
Sinking Fund Payment Date. The cash amount of any sinking fund payment shall be
subject to reduction as provided in Section 3.6(b). The Trustee shall apply cash
sinking fund payments to the redemption of Debentures on the applicable Sinking
Fund Payment Date.
34
(b)Right to Satisfy Sinking Fund Payments with Debentures. In
lieu of making all or any part of any mandatory sinking fund payment in cash,
the Company may at its option deliver to the Trustee any Debentures theretofore
acquired by the Company or redeemed by the Company (other than pursuant to this
Section 3.6) or converted pursuant to Article IV, and the principal amount of
such Debentures shall be credited against the principal amount portion of the
mandatory sinking fund payment (and the interest portion shall be reduced as
well, provided that the Company shall receive credit for any such Debenture only
once).
(c)Redemption of Debentures for the Sinking Fund. On or before
the sixtieth day prior to each Sinking Fund Payment Date, the Company shall
deliver to the Trustee (i) a certificate signed by the treasurer or an assistant
treasurer of the Company specifying the portions of such sinking fund payment to
be satisfied by payment of cash and by delivery of Debentures so acquired by the
Company, and (ii) such Debentures, and the Company shall deliver to the Trustee
any Debentures for which it is seeking credit. On or before the thirtieth day
prior to each Sinking Fund Payment Date, the Company, in its sole discretion,
shall select the Debentures or portions thereof to be redeemed on the next
Sinking Fund Payment Date, and the Trustee shall cause notice of redemption of
such Debentures on such Sinking Fund Payment Date to be given in the name of the
Company and in the manner provided in Section 3.2 for the redemption of
Debentures in part at the option of the Company, except that the notice of
redemption shall state that such redemption is for sinking fund purposes, and on
and after such Sinking Fund Payment Date the Trustee shall apply or cause to be
applied such sinking fund moneys in the manner provided in Section 3.3 to the
redemption of the Debentures so selected.
35
(d)Effect of Redemption on Warrants. Holders of Debentures
whose Debentures are redeemed through operation of the sinking fund will not be
required to exercise the Warrants attached to such Debentures. However, any
unexercised Warrants will expire upon such payment of the Debentures.
IV
CONVERSION OF DEBENTURES
IV.1.Right of Debentureholders to Convert Debenture Into
Common Stock of Company.
The Debentures may be converted by Holders, in whole or in
part, from time to time, commencing ninety days following the Initial Closing
Date and on or before the close of business prior to the seventh anniversary of
the Initial Closing Date, or the date of redemption (or if that day is not a
Business Day, on the preceding Business Day), at any time on at least five days'
written notice to the Company, at the conversion prices described herein (except
that, in respect of any Debenture or Debentures, or portion thereof, called for
redemption before such date pursuant to Article Three hereof, such right shall
terminate at the close of business on the date fixed for such redemption unless
the Company shall default in payment due upon redemption thereof) to convert,
subject to the terms and provisions of this Article IV, the principal amount of
any such Debenture or Debentures, or portion thereof as hereinafter provided,
into (a) such whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock (the "Debenture Conversion Shares") as
determined by dividing (y) the principal amount of Debentures to be converted by
(z) the Holder Conversion Price, (b) an amount of money payable in Swiss Francs
equal to the accrued and unpaid interest thereon to the date of conversion, and
(c) an amount of money equal to the value of the fractional share remainder, if
any, resulting from the calculation described in clause (a) above, to be paid in
Swiss Francs based on the Holder Conversion Price per share.
36
"Holder Conversion Price" means the product of (w) the
applicable Stock Price Factor, (x) the applicable Exchange Rate Factor, (y) the
applicable Holder Conversion Percentage Factor and (z) the applicable
Antidilution Factor.
"Stock Price Factor" means a factor, to be calculated by the
Company with respect to each December 15, February 15, April 15, June 15, August
15, and October 15 (each a "Reset Date"), and to be applicable in the two full
calendar months following the Reset Date, and equal to the average daily Nasdaq
closing price per Share (or, if the Company is listed or quoted on an exchange
in the United States other than Nasdaq, the closing price on such exchange), for
the thirty trading days immediately preceding the applicable Reset Date;
provided that in no event shall the Stock Price Factor be less than U.S. $12.00
(as adjusted, if required, as provided in Section 4.5), regardless of the actual
Stock Price Factor otherwise determined.
"Exchange Rate Factor" means a factor, to be calculated by the
Company with respect to each Reset Date, and to be applicable in the two full
calendar months following the Reset Date, and equal to the average Noon Buying
Rate (as defined below) for the thirty trading days immediately preceding the
applicable Reset Date; provided that in no event shall the Exchange Rate Factor
be less than 1.1175. "Noon Buying Rate" means the exchange rate for one U.S.
dollar expressed in Swiss Francs, based upon the noon buying rate in New York
City for cable transfers in Swiss Francs, as certified for customs purposes by
the Federal Reserve Bank of New York.
"Holder Conversion Percentage Factor" means a conversion
percentage, determined on the date notice of conversion is given, which shall be
(i) 100% until the day preceding the third anniversary of the Initial Closing
Date, (ii) 95% from the third anniversary of the Initial Closing Date until the
day preceding the fourth anniversary of the Initial Closing
37
Date; (iii) 90% from the fourth anniversary of the Initial Closing Date until
the day preceding the fifth anniversary of the Initial Closing Date; (iv) 85%
from the fifth anniversary of the Initial Closing Date until the day preceding
the sixth anniversary of the Initial Closing Date; and (v) 80% from the sixth
anniversary of the Initial Closing Date until the seventh anniversary of the
Initial Closing Date.
Debentures may be converted only in the principal amount
thereof consisting of SF 1,000 or an integral multiple of SF 1,000. If any
Debenture is converted in part, the Company, on surrender of such Debenture for
conversion, shall execute such new Debenture or Debentures and shall deliver to
the Trustee (a) the surrendered Debenture for cancellation, or if such Debenture
has been duly cancelled by the Company, such duly cancelled Debenture, (b) such
new Debenture or Debentures for authentication, and (c) unless the Trustee is a
conversion agent, a statement signed by any officer of the Company, or by any
agent maintained by the Company for conversion of Debentures in accordance with
the provisions of Section 2.6, stating the principal amount of the surrendered
Debenture which has been converted and requesting the authentication of such new
Debenture or Debentures; and thereupon the Trustee shall authenticate and the
Company shall deliver or cause to be delivered such new Debenture or Debentures
to such Debentureholder.
IV.2. Right of Company to Convert
Debenture into Common Stock of
Company.
The Debentures may be converted by the Company, in whole or
from time to time in part, into (a) that whole number of Debenture Conversion
Shares determined by dividing (y) the sum of the principal amount of Debentures
to be converted, by (z) the Company Conversion Price, (b) an amount of money
payable in Swiss Francs equal to the accrued and unpaid interest thereon to the
date of conversion, and (c) an amount of money equal to the value of the
fractional share remainder, if any, resulting from the calculation described in
clause (a) above, to be paid in Swiss Francs based on the Company Conversion
Price per share.
38
"Company Conversion Price" means the product of (w) the
applicable Stock Price Factor, (x) the applicable Exchange Rate Factor, (y) the
applicable Company Conversion Percentage Factor and (z) the applicable
Antidilution Factor.
"Company Conversion Percentage Factor" means a conversion
percentage, determined on the date notice of conversion is given, which shall be
(i) 100% until the day preceding the third anniversary of the Initial Closing
Date, (ii) 92.5% from the third anniversary of the Initial Closing Date until
the day preceding the fourth anniversary of the Initial Closing Date; (iii)
87.5% from the fourth anniversary of the Initial Closing Date until the day
preceding the fifth anniversary of the Initial Closing Date; (iv) 82.5% from the
fifth anniversary of the Initial Closing Date until the day preceding the sixth
anniversary of the Initial Closing Date; and (v) 77.5% from the sixth
anniversary of the Initial Closing Date until the seventh anniversary of the
Initial Closing Date.
IV.3. Exercise of Conversion Privilege.
Debentures may be converted only in units of SF 1,000 and
integral multiples thereof. A holder of Debentures desiring to convert
Debentures will not be required to exercise the attached Warrants. However, if
the Warrants are unexercised, they will expire upon such conversion by the
holder of Debentures or upon conversion or redemption at the option of the
Company. In addition, during the period beginning 90 days after the Initial
Closing Date and ending 119 days following the Initial Closing Date, any
conversion of Debentures will necessarily result in the expiration of the
Warrants attached thereto.
A Holder may exercise the conversion privilege by completing
the Conversion Notice that is a part of the Debenture and surrendering to the
Company, at the office or agency to be maintained by the Company for the purpose
in accordance with the provisions of Section 2.6, the Debenture or Debentures so
to be converted. The Conver-
39
sion Notice shall also state the name or names (together with address and tax
identification number to the extent required), if different from the name of the
registered Holder, in which the certificate or certificates for such shares of
Common Stock shall be issued. Debentures surrendered for conversion shall (if so
required by the Company or the Trustee) be duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the registered Holder or his duly authorized attorney, and be accompanied by a
signature guaranty by a commercial bank or trust company or other institution
which may be required under applicable laws or regulations, and any Debentures
so surrendered during the period from the close of business on any Record Date
for the payment of interest on the Debentures to the opening of business on the
interest payment date shall (except in the case of Debentures or portions
thereof which have been called for redemption on a redemption date within such
period) be accompanied by payment in funds acceptable to the Company of an
amount equal to the interest payable on such interest payment date; provided
that no such payment need be made if there shall exist at the time of conversion
a default in the payment of interest on the Debentures. An amount equal to the
quarterly interest payment due in respect of any Debenture converted shall be
paid by the Company on the interest payment date to the Debentureholder of such
converted Debenture on such Record Date, provided that if the Company defaults
in payment of interest on such interest payment date, the amount previously paid
by the Debentureholder to the Company in respect of interest upon conversion of
Debentures shall be repaid to the Debentureholder. Except as expressly set forth
in this Section 4.3, no payment or adjustment shall be made on conversion of any
Debenture for interest accrued thereon or for dividends on securities issued
upon such conversion.
IV.4. Issuance of Shares of Common Stock
on Conversion.
As promptly as practicable after the surrender of any
Debenture or Debentures for conversion in the manner herein provided, the
Company shall deliver or cause to be delivered, at its said office or agency at
which such
40
surrender is made, to or upon the written order of the Holder of the Debenture
or Debentures so surrendered, certificates representing the number of duly
authorized, validly issued, fully paid and non-assessable shares of Common Stock
of the Company into which such Debenture or Debentures may be converted in
accordance with the provisions of this Article IV and cash as provided in this
Article IV in respect of any accrued and unpaid interest and/or fraction of a
share of Common Stock issuable upon such conversion. Subject to the following
provisions of this Section 4.4, such conversion shall be deemed to have been
made immediately prior to the close of business on the date on which such
Debenture or Debentures shall have been surrendered for conversion in the manner
herein provided accompanied by written notice and the funds, if any, required by
Section 4.10, so that the rights of the Holder of such Debenture or Debentures
as a Debentureholder shall cease at such time and the person or persons entitled
to receive the shares of Common Stock upon conversion of such Debenture or
Debentures shall be treated for all purposes as having become the record holder
or holders of such shares of Common Stock at such time; provided that no such
surrender on any date when the stock transfer books of the Company shall be
closed shall be effective to constitute the person or persons entitled to
receive shares of Common Stock, upon conversion of such Debenture or Debentures,
as the record holder or holders of such shares on such date, but such surrender
shall be effective to constitute the person or persons entitled to receive such
shares of Common Stock as the record holder or holders thereof for all purposes
at the opening of business on the next succeeding day on which such stock
transfer books are open and such conversion shall be at the applicable
Conversion Price in effect at such time.
Shares of Common Stock which are issuable upon the conversion
of Debentures which have been duly surrendered for conversion as provided herein
shall be deemed to be issued to the registered Holder thereof on the date of
such surrender; provided, however, that no such surrender on any date when the
stock transfer books of the Company shall be closed shall be effective to
constitute the person entitled to receive such shares of Common Stock as the
record holder thereof on such date, but such surrender
41
shall be effective to constitute the person entitled to receive such shares of
Common Stock as the record holder thereof for all purposes immediately after the
opening of business on the next succeeding day on which such stock transfer
books are open.
IV.5. Adjustment of Antidilution Factor.
The Antidilution Factor referred to in the calculation of the
Conversion Prices Sections 4.1 and 4.2 shall be subject to adjustment from time
to time as follows:
(a) In the event that the Company shall at any time after the
date hereof subdivide or combine the outstanding shares of Common Stock or issue
additional shares of Common Stock as a dividend or other distribution on the
Common Stock, the Antidilution Factor in effect immediately prior to such
subdivision or combination of shares or share dividend or distribution shall be
proportionately adjusted so that, with respect to each such subdivision of
shares or share dividend or distribution, the number of shares of the Common
Stock deliverable upon conversion of each SF 1,000 principal amount of the
Debentures shall be increased in proportion to the increase in the number of
shares of the then outstanding Common Stock resulting from such subdivision of
shares or share dividend or distribution, and with respect to each such
combination of shares, the number of shares of the Common Stock deliverable upon
conversion of each SF 1,000 principal amount of the Debentures shall be
decreased in proportion to the decrease in the number of shares of the then
outstanding Common Stock resulting from such combination of shares. Any such
adjustment in the Antidilution Factor shall become effective, in the case of any
such subdivision or combination of shares, at the close of business on the
effective date thereof, and, in the case of any such share dividend or
distribution, at the close of business on the record date fixed for the
determination of shareholders entitled thereto or on the first Business Day
during which the stock transfer books of the Company shall be closed for the
purpose of such determination, as the case may be.
42
(b)Notwithstanding anything in Sections 4.1 and 4.2 to the
contrary, in the case of any capital reorganization or any reclassification of
the Common Stock, or in the case of the consolidation or merger of the Company
with or into any other corporation or in case of any sale or transfer of all or
substantially all of the assets of the Company as may be permitted by the
provisions hereof, the Company and each Holder of the Debentures then
outstanding shall have the right thereafter to convert the principal amount of
each such Debenture into the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification,
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock of the Company into which such Debenture might have been converted
immediately prior to such reorganization, reclassification, consolidation,
merger, sale or transfer; and, in any such case, appropriate adjustment (as
determined in good faith by the Board of Directors of the Company) shall be made
in the application of the provisions of this Article IV (including provisions
with regard to the adjustment of the Conversion Price) in order that the rights
and interests of the holders thereafter shall be as nearly equivalent as may be
practicable to the rights and interests provided for in this Article IV.
In case of any consolidation or merger of the Company with or
into any other corporation (other than a consolidation or merger in which the
Company is the continuing corporation), or in case of any sale or transfer of
all or substantially all of the assets of the Company, the corporation formed by
such consolidation or the corporation into which the Company shall have been
merged or the corporation which shall have acquired such assets, as the case may
be, shall execute and deliver to the Trustee a supplemental indenture providing
for the rights of the holders as set forth in the preceding paragraph.
The Trustee shall not be under any responsibility to determine
the correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property receivable by the holders upon the conversion of their Debentures after
any such consolidation, merger,
43
sale or transfer or to any adjustment to be made with respect thereto. Upon the
delivery to the Trustee of any such supplemental indenture, the Company shall
deliver or cause to be delivered to the Trustee a resolution of the Board of
Directors and the Trustee may accept such resolution as conclusive evidence of
the correctness of any such provisions and shall be protected in relying
thereon. At the time of the delivery of such resolution the Company shall also
deliver or cause to be delivered to the Trustee an Opinion of Counsel as to the
compliance of any such provisions with the terms of this Indenture.
(c)Whenever the Company shall fix a record date for the
holders of the Common Stock for the purpose of determining the holders entitled
to subscribe for or purchase shares of Common Stock at a price per share less
than the Closing Price of the Common Stock as of such record date, the
Antidilution Factor shall be adjusted so that the number of shares of the Common
Stock into which each SF 1,000 principal amount of the Debentures shall
thereafter be convertible shall be determined by multiplying the number of
shares of the Common Stock into which such SF 1,000 principal amount of the
Debentures was theretofore convertible by a fraction of which the numerator
shall be the number of shares of the Common Stock outstanding immediately prior
to the taking of such record plus the number of additional shares of Common
Stock offered for subscription or purchase and of which the denominator shall be
the number of shares of the Common Stock outstanding immediately prior to the
taking of such record plus the number of shares of the Common Stock which the
aggregate offering price (without deduction of any expenses, including
commissions or discounts) of the total number of shares of the Common Stock so
offered would purchase at the Closing Price of the Common Stock as of such
record date. In the case of the proposed issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair value thereof as determined by the Board of
Directors of the Company. This Section 4.5(c) shall not apply in the case of any
shares of Common Stock proposed to be issued by the Company as or as a result of
a stock dividend payable in shares of Common Stock or as a
44
result of any subdivision or split-up of the outstanding shares of Common Stock.
(d)Whenever the Company shall fix a record date for the
holders of the Common Stock for the purpose of determining the holders entitled
to receive any distribution of evidences of its indebtedness, capital stock or
assets (other than a regularly scheduled cash dividend and dividends payable in
stock for which adjustment is made pursuant to Section 4.5(a)), or rights to
subscribe for or purchase any evidences of the Company's indebtedness or assets
(other than rights referred to in the preceding Section 4.5(c)), the
Antidilution Factor shall be adjusted so that the number of shares of the Common
Stock into which each SF 1,000 principal amount of the Debentures shall
thereafter be convertible shall be determined by multiplying the number of
shares of the Common Stock into which such SF 1,000 principal amount of the
Debentures was theretofore convertible by a fraction, of which the numerator
shall be the Closing Price of one share of Common Stock as of the record date
and of which the denominator shall be the Closing Price of one share of the
Common Stock as of the record date less the difference between (A) the aggregate
fair market value (as determined in good faith by the Board of Directors of the
Company and as described in a statement filed with the Trustee) of the portion
of the assets, capital stock or evidences of indebtedness so distributed or of
such subscription or purchase rights, and (B) the consideration, if any,
received therefor, applicable to one share of Common Stock.
(e)Notwithstanding anything to the contrary provided herein,
no adjustment in the Antidilution Factor shall be required unless such
adjustment would result in an increase or decrease of at least 1% in the
Conversion Price or the Conversion Price as last adjusted pursuant to this
Section 4.5, as the case may be; provided that any adjustments which by reason
of this Section 4.5(e) are not required to be made shall be carried forward
until used and taken into account in any subsequent adjustment.
(f) The provisions of this Section 4.5 shall similarly apply
to successive subdivisions, combinations, reorganizations, reclassification,
consolidations, merg-
45
ers, sales or transfers. Adjustments made pursuant to Sections 4.5(c) and (d)
shall be made successively whenever any record date referred to therein is
fixed; and in the event that any rights offering or subscription referred to in
such Sections is not made, the Antidilution Factor shall again be adjusted to be
the Antidilution Factor which would then be in effect if such record date had
not been fixed.
IV.6. No Fractional Shares to be Issued;
Cash Payments in Lieu Thereof.
No fractional shares shall be issued upon the conversion of
the Debentures. If more than one Debenture shall be surrendered for conversion
at one time by the same holder, the number of full shares that shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Debentures (or specified portions thereof to the extent
permitted hereby) so surrendered. Instead of any fractional share of Common
Stock that would be issuable upon conversion of any Debenture or Debentures or
specified portions thereof, the Company shall pay a cash adjustment as provided
in Section 4.1 or 4.2, as the case may be.
IV.7. Accountants' Certificate Evidence of
Correctness of Computation.
The certificate of any firm of independent public accountants
of recognized standing reasonably acceptable to the Company selected by the
Board of Directors shall be conclusive evidence of the correctness of any
computation made under this Article IV.
IV.8. Notice of Corporate Action.
In the event:
(a) the Company shall declare any dividend on the Common Stock
payable in shares of capital stock of the Company, cash or other property; or
46
(b) The Company shall authorize the issue of any options,
warrants or rights pro rata to all holders of Common Stock entitling them to
subscribe for or purchase any shares of stock of the Company or to receive any
other rights; or
(c)The Company shall authorize the distribution pro rata to
all holders of Common Stock of a cash dividend payable otherwise than out of
earnings or surplus legally available therefor under the laws of the State of
Delaware, shares of its capital stock (other than Common Stock), stock or other
securities of other persons, evidences of indebtedness issued by the Company or
other persons, assets (excluding cash dividends) or options or rights (excluding
options to purchase and rights to subscribe for Common Stock or other securities
of the Company convertible into or exchangeable for Common Stock); or
(d) There shall occur any reclassification of the Common Stock
or any consolidation or merger of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification of the Common
Stock) or a sale or transfer to another corporation of all or substantially all
of the properties of the Company;
then the Company shall cause to be filed with the Trustee and at the office or
agency maintained for the purpose of conversion of Debentures pursuant to
Section 2.6 and shall cause to be delivered promptly to the holders at their
addresses as they shall appear in the Debenture register, at least 20 days (or
10 in any case specified in clause (a) or (b) above) prior to the applicable
date hereinafter specified, a notice stating (i) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights are to be
determined, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be
47
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up.
IV.9. Covenant to Reserve Shares of Common
Stock for Issuance on Conversion of
Debentures and Exercise of Warrants.
The Company covenants that it shall at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon conversion of Debentures, as herein provided, and exercise of
Warrants, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all outstanding Debentures and exercise of all
outstanding Warrants.
If any shares issuable upon the conversion of Debentures or
exercise of Warrants require registration with or approval of any governmental
authority under any federal or state law before such shares may be validly
issued upon conversion, then the Company covenants that it shall in good faith
and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
The Company covenants that all shares of Common Stock that may
be issued upon conversion of Debentures and exercise of Warrants shall upon
issue be duly authorized, validly issued, fully paid and non-assessable and,
except as provided in Section 4.10, free from all taxes, liens and charges with
respect to the issue thereof.
48
IV.10. Issuance of Certificates for Shares
of Common Stock, in Name of, or in
Name Directed by, Debentureholder.
The issuance of certificates for shares of Common Stock upon
the conversion of any Debenture shall be made without charge to the converting
Debentureholder for such certificates or of any tax in respect of the issuance
of such certificates, and such certificates shall be issued in the respective
names of, or in such names as may be directed by, the holder of the Debenture
converted; provided that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificates in a name other than that of the registered holder of
the Debenture converted, and the Company shall not be required to issue or
deliver such certificates unless and until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
IV.11. Mailing of Notice Upon Adjustment
Pursuant to Section 4.5.
Whenever the Conversion Price shall be adjusted as a result of
a change in the Antidilution Factor pursuant to Section 4.5, the Company shall
forthwith file at the office maintained pursuant to Section 2.6 and, if
different, with the Trustee a statement signed by an Officer of the Company
specifying the adjusted Conversion Price determined as provided in such Section
and a certificate of a firm of independent public accountants as provided in
Section 4.7. Such statement shall show in reasonable detail the method of
calculation of such adjustment and the facts requiring the adjustment and upon
which the calculation is based. At such time, the Company shall forthwith cause
a notice setting forth the adjusted Conversion Price to be delivered promptly,
to each holder of Debentures at his address appearing on the registration books
of the Company and to any Conversion Agent other than the Trustee. Subject to
the provisions of Section
49
8.1, the Trustee and any such Conversion Agent shall be under no duty or
responsibility with respect to any such statement or certificate, except to
exhibit the same from time to time during reasonable business hours to any
Debentureholder desiring an inspection thereof.
IV.12. Responsibility of Trustee.
The Trustee shall not at any time be under any duty or
responsibility to any Debentureholder to determine whether any facts exist which
may require any adjustment of the Conversion Price, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee shall not be accountable with respect to the
registration, listing, validity or value (or the kind or amount) of any shares
of Common Stock or of any securities or property which may at any time be issued
or delivered upon the conversion of any Debenture; and the Trustee makes no
representation with respect thereto. The Trustee shall not be responsible for
any failure of the Company to make any cash payment or to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property upon the surrender of any Debentures for the purpose of conversion or,
subject to the provisions of Section 8.1, to comply with any of the covenants to
be complied with by the Company or to fulfill any of the conditions to be
fulfilled by the Company contained in this Article IV.
V
COVENANTS OF THE COMPANY
The Company covenants as follows:
V.1 Payment of Principal of and Interest
on Debentures.
The Company shall duly and punctually pay, or cause to be
paid, the principal of, premium, if any, and interest on each of the Debentures
at the time and place
50
and in the manner provided in the Debentures and in this Indenture.
V.2. Taxes, Assessments, Governmental
Charges and Certain Claims.
The Company shall pay and discharge, and shall cause each
Subsidiary to pay and discharge before the same become in default (a) all Taxes
imposed upon it or its income or profits or upon any of its assets or any part
thereof and (b) all lawful claims against it for labor, materials and supplies
or otherwise, which if unpaid might become a Lien on such assets or any part
thereof or otherwise, excluding any such Tax or claim, the amount, applicability
or validity of which is being timely contested in good faith by appropriate
proceedings, provided the Company or such Subsidiary, as applicable, has
established on its books adequate reserves in respect thereof in accordance with
GAAP, provided that payment of any such Tax or claim shall be made before any
property of the Company or such Subsidiary is seized or sold in satisfaction
thereof.
V.3. Reporting Requirements.
The Company shall deliver to:
(a) the Trustee, copies of information, documents and reports
as described in, and in accordance with, Section 6.3; and
(b) the Trustee, promptly upon the Company obtaining knowledge
of (x) an Event of Default or Default, an Officer's Certificate specifying in
reasonable detail the nature and period of existence thereof and what action the
Company proposes to take with respect thereto or (y) a material adverse change
in the financial condition or operation of the Company and its Subsidiaries, an
Officer's Certificate setting forth in reasonable detail the nature and amount
of such change and the action the Company proposes to take with respect thereto.
V.4. Books and Records.
51
The Company shall, and shall cause each of its Subsidiaries
to, keep its books, records and accounts in accordance with GAAP applied on a
basis consistent with preceding years.
V.5. Maintenance of Insurance.
The Company shall maintain, and shall cause each Subsidiary to
maintain, with financially sound and responsible insurers, insurance with
respect to its properties and business against such casualties and contingencies
(including worker's compensation and public liability, larceny, embezzlement or
other criminal misappropriation) and in such amounts as is customary in the case
of similarly situated corporations engaged in the same or similar businesses and
not less than the following amounts of coverage: comprehensive general liability
insurance with limits of not less than $1,000,000 for injury or death per
occurrence and $3,000,000 umbrella liability coverage. From time to time, upon
written request by the Trustee at reasonable intervals, the Company shall
deliver a Schedule of Insurance specifying the details of such insurance in
effect.
52
V.6. Maintenance of Corporate Existence,
Properties, Etc.
Except to the extent otherwise permitted by this Indenture,
the Company shall, and shall cause each Subsidiary to, (i) do or cause or cause
to be done all things reasonably necessary to preserve, renew and keep in full
force and effect its corporate existence and the patents, trademarks, service
marks, trade names, service names, copyrights, licenses, permits, franchises and
other rights, including distributorship and franchise agreements, that continue
to be useful in some material respect to its business, (ii) at all times
maintain, preserve and protect all of its patents, trademarks, service marks,
trade names, service names, copyrights, licenses, permits, franchises and other
rights, including distributorship and franchise agreements, that continue to be
useful in some material respect to its business, and (iii) preserve all the
remainder of its property useful in the conduct of its business and keep the
same in good repair, working order and condition (ordinary wear and tear
excepted), and from time to time, make, or cause to be made, all needful and
proper repairs, renewals, replacements, betterments and improvements thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
V.7. Type of Business.
The Company shall, and shall cause each Subsidiary to, remain
in substantially the same businesses in which the Company and its Subsidiaries
are engaged as of the date of this Indenture or in such other types of
businesses that are reasonably related or incidental thereto.
53
V.8. Merger or Sale of Assets.
Unless approved by a majority of the Independent Directors of
the Board of Directors of the Company, the Company shall not, and shall not
permit any Subsidiary to, merge, consolidate or exchange shares with any other
corporation, or sell, lease or transfer or otherwise dispose of any of its
assets to any Person, other than sales, leases, transfers or other dispositions
of inventory in the ordinary course of business or particular items of obsolete
or unnecessary equipment in the ordinary course of business, except:
(a) any Subsidiary may merge or consolidate with the Company
(provided that Company shall be the surviving corporation in any such
transaction) or with any one or more other Subsidiaries;
(b) any Subsidiary may sell, lease, transfer or otherwise
dispose of all or any substantial part of its assets to the Company or another
Subsidiary; and
(c) as otherwise expressly permitted by this Indenture.
V.9. Investments.
The Company shall not, and shall not permit any Subsidiary to,
make or have outstanding any loan or advance to, or own, purchase or acquire any
obligations (other than accounts receivable generated in the ordinary course of
business) or Securities of, or any interest in, or make any capital contribution
to or acquire all or substantially all of the assets of, any other Person,
except that the Company and any Subsidiary may: (i) acquire and own obligations
or Securities received in settlement of debt created in the ordinary course of
business that is owing to the Company or such Subsidiary; (ii) own, purchase or
acquire (A) commercial paper, banker's acceptances or certificates of deposit
issued by any United States commercial bank or enter into repurchase agreements
with such banks with respect to obligations described in this clause (ii), (B)
commercial paper of reputable issuers
54
located in the United States, which obligations have a short-term rating of A-1
or better by Standard & Poor's Corporation or P-1 by Xxxxx'x Investors Service,
Inc., (C) obligations of the United States government or any agency thereof, (D)
obligations guaranteed by the United States government or any agency thereof, in
each case such obligations described in this clause (ii) to be due within one
year and one day from the date of acquisition, and (E) shares or obligations of
mutual funds or money market funds that invest solely in obligations of the
types described earlier in this clause (ii); (iii) endorse negotiable
instruments for collection or deposit in the ordinary course of business; (iv)
own stock of Subsidiaries; and (v) acquire all or any portion of the assets or
Securities of any other Person if such acquisition is approved by a majority of
the Independent Directors of the Board of Directors of the Company.
V.10. Transactions with Affiliates.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly purchase, acquire or lease any property from, or sell,
transfer or lease any property to, or otherwise deal with, in the ordinary
course of business or otherwise, any Affiliate, except upon terms not less
favorable to Company or the Subsidiary than if the Affiliate relationship did
not exist and provided the transaction is approved by a majority of the
Independent Directors of the Board of Directors of the Company.
V.11. Use of Proceeds.
The Company shall use the proceeds from the sale of the
Debentures as specified in the Offering Memorandum pursuant to which the
Debentures were offered for sale.
55
V.12. Dividends, Etc.
The Company shall not declare or pay any dividend on its
capital stock (other than stock dividends) or make any payment to purchase,
redeem, retire or acquire any of its capital stock or the subordinated debt of
the Company or any option, warrant or other right to acquire such capital stock
unless, on the date immediately following any such payment, the Company's total
stockholders' equity, as would be reflected on a consolidated balance sheet of
the Company prepared in accordance with GAAP, equals or exceeds the aggregate
principal amount of Debentures then outstanding (converted into U.S. dollars
based upon the Noon Buying Rate in effect on such date of calculation).
V.13 Limitation on Liens.
Except for Liens arising in the ordinary course of business,
if the Company or any Subsidiary shall at any time create, incur, assume or
permit to exist any lien on any property or asset of the Company or any income
or profits therefrom, then the Company shall, prior to or simultaneously with
the creation, incurrence, assumption or commencement of existence of such lien,
secure or cause to be secured the due and punctual payment of the principal of
and interest on the Debentures equally and ratably with any and all obligations
and indebtedness secured by such lien; provided, however, that this covenant
shall not apply in the case of Liens to secure Senior Indebtedness.
V.14 Compliance with Laws, Etc.
The Company will comply, and will cause each of its
Subsidiaries to comply, in all material respects, with all Requirements of Law
and Contractual Obligations applicable to or binding upon any of them, except
where the failure to so comply would not have a material adverse effect on the
financial condition or operations of the Company and its Subsidiaries taken as a
whole.
56
VI
DEBENTUREHOLDER'S LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
VI.1. Company to Furnish Trustee
Information as to Names and
Addresses of Debentureholders.
The Company covenants and agrees that it shall furnish or
cause to be furnished to the Trustee quarterly, promptly after each Record Date,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of the Debentures as of such Record Date. The Company
also covenants and agrees that it shall furnish or cause to be furnished to the
Trustee, at such other times as the Trustee may request in writing, upon receipt
by the Company of any such request, a list of similar form and content. No such
list shall be required to be furnished as long as the Trustee shall be the
Registrar.
VI.2. Trustee to Preserve Information as
to Names and Addresses of
Debentureholders.
(a)The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in Section 6.1 or received by it in the capacity of Paying Agent or
Registrar (if so acting).
The Trustee may destroy any list furnished to it as provided
in Section 6.1 upon receipt of a new list so furnished.
(b)In case three or more holders of Debentures (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each applicant has owned a Debenture for a period
of at least six months preceding the date of such application, and such
application states that the appli-
57
cants desire to communicate with other holders of Debentures with respect to
their rights under this Indenture or under the Debentures, and is accompanied by
a copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall within five Business Days after the receipt
of such application, at its election, either
(i) afford to such applicants access to the
information preserved at the time by the Trustee in accordance
with Section 6.2(a), or
(ii) inform such applicants as to the approximate
number of holders of Debentures and as to the approximate cost
of mailing to such Debentureholders the form of proxy or other
communications, if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Debentureholder whose name and address appears in the
information preserved at the time by the Trustee in accordance with Section
6.2(a), a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants, and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the holders of Debentures, or, in the Opinion of Counsel, would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If said Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections, or if, after the entry of an order
sustaining one or more of such objections, said Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall
58
enter an order so declaring, the Trustee shall mail copies of such material to
all such Debentureholders with reasonable promptness after the entry of such
order and the renewal of such tender; otherwise the Trustee shall be relieved of
any obligation or duty to such applicants respecting their application.
(c) Each and every holder of the Debentures, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any Paying Agent shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
holders of Debentures in accordance with Section 6.2(b), regardless of the
source from which such information was derived, and that the Trustee shall not
be held accountable by reason of mailing any material pursuant to a request made
under Section 6.2(b).
VI.3. Reports from the Company.
(a)Annual and Other Reports to be Filed by Company with
Trustee. The Company covenants and agrees to file with the Trustee within 15
days after the date by which the Company is required to file the same with the
Commission (including any extension of time to which the Company is entitled),
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as said Commission may from
time to time by rules and regulations prescribe) which the Company may be
required to file with said Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and said Commission, in accordance with rules and regulations prescribed
from time to time by said Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations.
(b) Additional Information and Reports to be Filed with
Trustee and Securities and Exchange Commission.
59
The Company covenants and agrees to file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from time to time by said
Commission, such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and regulations.
(C) Summaries of Information and Reports to be Transmitted by
Company to Debentureholders. The Company covenants and agrees, as may be
required by rules and regulations prescribed from time to time by the
Commission, to cause to be transmitted to the holders of Debentures within
thirty days after the filing thereof with the Trustee, in the manner and to the
extent provided in Section 6.4(c), the annual reports specified in Section
6.3(a).
VI.4. Reports from the Trustee.
(a) Trustee to Transmit Annual Report to Debentureholders. On
or before April 30, 1997, and on or before April 30, in every year thereafter,
as long as any Debentures are outstanding hereunder, the Trustee shall transmit
to the Debentureholders, as hereinafter in this Section provided, a brief report
dated as of the preceding December 31, that complies with Trust Indenture Act
Section 313(a). The Trustee also shall comply with Trust Indenture Act Sections
313(b) and 313(c).
(b) Trustee to Transmit Certain Further Reports to
Debentureholders. The Trustee shall transmit to the Debentureholders, as
hereinafter provided, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee as such since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this Indenture), for the reimbursement of which it claims or may
claim a lien or charge prior to that of the Debentures on property or funds held
or collected by it as Trustee, and which it has not previously reported pursuant
to this subsection, if such ad-
60
vances remaining unpaid at any time aggregate more than ten per cent of the
principal amount of Debentures outstanding at such time, such report to be
transmitted within ninety days after such time.
(c) Debentureholders Reports to be Mailed to Registered
Holders. Reports pursuant to this Section 6.4 shall be transmitted by mail to
all registered holders of Debentures, as the names and addresses of such holders
appear upon the registration books maintained by the Debenture Registrar.
(d) Copies of Reports to be Filed with Stock Exchanges. A copy
of each such report shall, at the time of such transmission to Debentureholders,
be filed by the Trustee with each stock exchange upon which the Debentures are
listed. The Company agrees to notify the Trustee when and as the Debentures
become listed on any stock exchange.
VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
VII.1. Events of Default Defined.
In case one or more of the following Events of Default shall
have occurred and be continuing, that is to say:
(a) default for thirty days in the due and punctual payment of
any installment of interest upon any of the Debentures as and when the same
shall become due and payable, whether such default arises as a result of the
provisions of Article XIII or otherwise; or
(b) default in the due and punctual payment of the principal
of, and premium, if any, on, any of the Debentures as and when the same shall
become due and payable either at maturity, upon redemption, by declaration as
authorized by this Indenture, or otherwise, whether such default arises as a
result of the provisions of Article XIII or otherwise; or
61
(c) failure on the part of the Company duly to observe or
perform any of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture, not otherwise referred to in another paragraph
of this Section 7.1, after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by the
Trustee or to the Trustee and the Company by the Holders of at least 25% in
aggregate principal amount of the then outstanding Debentures; or
(d) a material default shall occur under (i) any bond,
debenture, note or other evidence of Indebtedness for money borrowed by the
Company or a Subsidiary or (ii) any mortgage, indenture, credit or loan
agreement or other 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 such Subsidiary (including Capital Lease Obligations), whether such
Indebtedness now exists or shall hereafter be created, which default shall
constitute a failure to pay any portion of the principal of, premium, if any,
and interest on such Indebtedness when due and payable after the expiration of
any applicable grace period with respect thereto, or a default shall occur in
the performance of any other covenant or condition contained in any such
evidence of Indebtedness or mortgage, indenture, credit or loan agreement or
other instrument if the effect of such default is to entitle (after giving
effect to any applicable notice or applicable cure rights) the holder of such
evidence of indebtedness or creditor (or a trustee for such holders or
creditors) to then cause such Indebtedness to become due prior to its stated
maturity, or if such default shall have resulted in such indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise
have become due and payable, without such Indebtedness having been discharged;
or
(e) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction against the
Company and/or any Subsidiary and such judgment or judgments remain unstayed or
undischarged for a period of sixty days, provided that the aggregate of all such
judgments exceeds $3,000,000; or
62
(f) the Company or a Subsidiary shall (1) apply for or consent
to the appointment of or the taking of possession of it by a receiver,
custodian, trustee or liquidator of the Company or any such Subsidiary or of all
or a substantial part of the property of the Company or any such Subsidiary, (2)
admit in writing the inability of the Company or any such Subsidiary, or be
generally unable, to pay its debts as such debts become due, (3) make a general
assignment for the benefit of its creditors, (4) commence a voluntary case under
the Bankruptcy Code (as now or hereafter in effect), (5) file a petition seeking
to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, (6) fail to
controvert in a timely or appropriate manner, or acquiesce in writing to, any
petition filed against such Person in an involuntary case under the Bankruptcy
Code or other similar law, or (7) take any action for the purpose of effecting
any of the foregoing; or
(g) a proceeding or case shall be commenced, without the
application of the Company or any Subsidiary, in any court of competent
jurisdiction, seeking (1) the liquidation, reorganization, dissolution,
winding-up or composition or readjustment of debts of the Company or any such
Subsidiary, (2) the appointment of a trustee, receiver, custodian, liquidator or
the like of the Company or any such Subsidiary or of all or any substantial part
of the assets of the Company or any such Subsidiary, or (3) similar relief in
respect of the Company or any such Subsidiary under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition and adjustment
of debts, and such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be entered
and continue in effect, for a period of 60 days from commencement of such
proceeding or case or the date of such order, judgment or decree, or any order
for relief against the Company or any such Subsidiary shall be entered in an
involuntary case or proceeding under the Bankruptcy Code; or
63
(h) any provision of any Debenture or this Indenture shall at
any time for any reason cease to be valid and binding in accordance with its
terms on the Company, or the validity, enforceability, or priority thereof shall
be contested by the Company, or the Company shall terminate or repudiate (or
attempt to terminate or repudiate) any Debenture or this Indenture; or
(i) any representation, warranty or statement made by the
Company in any certificate, report, financial statement or other document
furnished to the Trustee or any Debentureholder shall be false or misleading in
any material respect on the date as of which made or deemed made; then and in
each and every such case (other than an Event of Default specified in Section
7.1(g) and (h)), unless the principal of all the Debentures shall have already
become due and payable, either the Trustee or the holders of at least a majority
in aggregate principal amount of the Debentures then outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by the
Debentureholders), may declare the principal of and interest accrued on all the
Debentures then outstanding to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the said Debentures contained to the contrary
notwithstanding. If an Event of Default specified in Sections 7.1(g) or (h)
occurs, all unpaid principal and interest on all the Debentures then outstanding
shall ipso facto become and shall be immediately due and payable without any
declaration or other act on the part of the Trustee or any Debentureholders.
This provision is subject to the condition that if, at any time after the
principal of and interest accrued on the Debentures shall have been so declared
due and payable, but before the Debentures shall have become due by their terms
and before any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum of money sufficient to pay all matured
installments of interest upon all the Debentures then outstanding and the
principal of any and all Debentures then outstanding that shall have
64
become due otherwise than by declaration (with interest upon such principal and,
to the extent that payment of such interest is enforceable under applicable law,
upon overdue installments of interest, at the rate per annum expressed in all
Debentures to the date of such payment or deposit) and all amounts payable to
the Trustee under Section 8.6, and any and all defaults under the Indenture,
other than the nonpayment of principal and interest on Debentures then
outstanding that shall not have become due by their terms, shall have been
remedied or provision shall have been made therefor to the satisfaction of the
Trustee, then and in every such case the holders of a majority in aggregate
principal amount of the Debentures then outstanding, by written notice to the
Company and to the Trustee, may waive all defaults and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
In case the Trustee or any Debentureholder shall have
proceeded to enforce any right under this Indenture and such proceedings shall
have been discontinued or abandoned because of such rescission or annulment or
for any other reason or shall have been determined adversely to the Trustee or
such Debentureholder, then, and in every such case, the Company, the Trustee and
the Debentureholders shall be restored severally and respectively to their
former positions and rights hereunder, and all rights, remedies and powers of
the Company, the Trustee and the Debentureholders shall continue as though no
such proceedings had been taken.
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VII.2. Covenant of Company to Pay to
Trustee Whole Amount Due on
Debentures on Default in Payment of
Interest or Principal.
The Company covenants that (1) in case default shall be made
in the payment of any installment of interest on any of the Debentures, as and
when the same shall become due and payable, and such default shall have
continued for a period of ten days, or (2) in case default shall be made in the
payment of the principal of any of the Debentures when the same shall have
become due and payable, whether upon maturity of the Debentures or upon
redemption or upon declaration as authorized by this Indenture or otherwise,
then, upon demand of the Trustee, the Company shall pay in cash to the Trustee,
for the benefit of the holders of the Debentures then outstanding, the whole
amount that then shall have become due and payable on all such Debentures for
principal or interest, as the case may be, with interest upon the overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) upon overdue installments of interest at the rate per annum
expressed in the Debentures; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and all
amounts payable to the Trustee under Section 8.6.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or proceedings at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Company or other obligor
upon the Debentures and collect in the manner provided and to the extent
permitted by law out of property of the Company or other obligor upon the
Debentures wherever situated the moneys adjudged or decreed to be payable.
66
The Trustee shall be entitled and empowered, either in its own
name or as trustee of an express trust, or as attorney-in-fact for the holders
of the Debentures, or in any one or more of such capacities, to file such proof
of debt, amendment of proof of debt, claim, petition or other document as may be
necessary or advisable in order to have the claims of the Trustee and the
holders of the Debentures allowed in any equity receivership, insolvency,
bankruptcy, liquidation, readjustment, reorganization or other judicial
proceedings relative to the Company or any other obligor on the Debentures or
their creditors, or affecting their property. The Trustee is hereby irrevocably
appointed (and the successive respective holders of the Debentures by taking and
holding the same shall be conclusively deemed to have so appointed the Trustee)
the true and lawful attorney-in-fact of the respective holders of the
Debentures, with authority to make and file in the respective names of the
holders of the Debentures or on behalf of the holders of the Debentures as a
class, subject to deduction from any such claims of the amounts of any claims
filed by any of the holders of the Debentures themselves, any proof of debt,
amendment of proof of debt, claim, petition or other document in any such
proceedings and to receive payment of any sums becoming distributable on account
thereof, and to execute any such other papers and documents and to do and
perform any and all such acts and things for and on behalf of such holders of
the Debentures as may be necessary or advisable in the opinion of the Trustee in
order to have the respective claims of the Trustee and of the holders of the
Debentures against the Company or its property allowed in any such proceeding,
and to receive payment of or on account of such claims; provided that nothing
contained in this Indenture shall be deemed to give to the Trustee any right to
accept or consent to any plan of reorganization or otherwise by action of any
character in any such proceeding to waive or change in any way any right of any
Debentureholder.
All right of action and of asserting claims under this
Indenture, or under any of the Debentures, may be enforced by the Trustee
without the possession of any of the Debentures or the production thereof on any
trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in
67
its own name as trustee of an express trust, and any recovery of judgment shall
be for the ratable benefit of the holders of the Debentures, subject to the
provisions of this Indenture. In any proceedings brought by the Trustee (and
also any proceedings in which a declaratory judgment of a court may be sought as
to the interpretation or construction of any provision of this Indenture, to
which the Trustee shall be a party) the Trustee shall be held to represent all
the holders of the Debentures, and it shall not be necessary to make any holders
of the Debentures parties to any such proceedings.
VII.3. Application of Moneys Collected by
Trustee.
Subject to the provisions of Article XIII hereof, any moneys
collected by the Trustee, pursuant to Section 7.2, shall be applied in the order
following, at the date or dates fixed by the Trustee, upon presentation of the
several Debentures, and the notation thereon of the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection, and
of all amounts payable to the Trustee under Section 8.6;
Second: In case the principal of the outstanding Debentures
shall not have become due and be unpaid, to the payment of
defaulted interest on the Debentures, in the order of the
maturity of the installments of such interest, with interest
(so far as may be lawful and if such interest has been
collected by the Trustee) upon the defaulted installments of
interest at the rate per annum expressed in the Debentures,
such payments to be made ratably to the persons entitled
thereto, without discrimination or preference;
Third: In case the principal of the outstanding Debentures
shall have become due, by declaration as authorized by this
Indenture or otherwise, to the payment of Debentures for
principal (and
68
premium, if any) and interest, with interest on the overdue
principal and premium, if any) and (so far as may be lawful
and if such interest has been collected by the Trustee) upon
overdue installments of interest at the rate per annum
expressed in the Debentures; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid
upon the Debentures, then to the payment of such principal
(and premium, if any) and interest, without preference or
priority of [principal] (and premium, if any) over interest,
or of interest over principal (and premium, if any) or of any
installment of interest over any other installment of
interest, or of any Debenture over any other Debenture,
ratably to the aggregate of such principal (and premium, if
any) and accrued and unpaid interest; and
Fourth: To the payment of the remainder, if any, to the
Company, its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct.
69
VII.4. Limitation on Suits by Holders of
Debentures.
70
Except as otherwise expressly provided in this Section 7.4, no
holder of any Debenture shall have any right by virtue of or by availing itself
of any provision of this Indenture or otherwise to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture,
for the appointment of a receiver or trustee, for the execution of any trust or
power hereof, or for any other remedy hereunder, unless (a) such holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, (b) the holders of 25% in
aggregate principal amount of the Debentures then outstanding shall have made
written request upon the Trustee to proceed to exercise the power hereinbefore
granted or to institute such action, suit or proceeding in its own name as
Trustee hereunder, (c) such holders shall have offered to the Trustee such
reasonable indemnity and security therefor as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and (d) the Trustee
within a reasonable time (which in no event shall be less than sixty days])
after its receipt of such notice, request and offer of indemnity and security,
shall have failed to proceed to exercise such powers or to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by the taker and Holder of every Debenture with every other
taker and Holder and the Trustee, that no one or more Holders of Debentures
shall have any right in any manner whatever by virtue of or by availing itself
of any provision of this Indenture to affect, disturb or prejudice the rights of
the holders of any other of such Debentures, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided, and that all
proceedings in law or in equity shall be instituted, had and maintained in the
manner herein provided for the equal, ratable and common benefit of all holders
of Debentures. For the protection and enforcement of the provisions of this
Section 7.4, each and every Debentureholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture, nothing
contained herein shall affect or impair
71
the right, which is absolute and unconditional, of any Debentureholder to
receive, and to institute suit to enforce the payment of the principal of and
interest on his Debentures at and after the respective due dates (including
maturity by call for a redemption, or by declaration pursuant to this Indenture
that has not been rescinded or annulled pursuant to Section 7.1 or otherwise) of
such principal or interest, or the obligation of the Company, which is also
absolute and unconditional, to pay the principal of and interest on each of the
Debentures to the respective holders thereof at the times and places in the
Debentures expressed.
VII.5. Delay or Omission in Exercise of
Rights Not Waiver of Default.
No delay or omission of the Trustee or of any holder of any of
the Debentures to exercise any right or power accruing upon any Event of Default
shall impair any such right or power or shall be construed to be a waiver of any
such default or an acquiescence therein; and, subject to the provisions of
Section 7.4, every power and remedy given by this Article VII or by law to the
Trustee or to the Debentureholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Debentureholders.
All powers and remedies given by this Article VII to the
Trustee or to the Debentureholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the Debentureholders, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture.
VII.6. Rights of Holders of Majority in
Principal Amount of Debentures to
Direct Trustee and Waive Defaults.
Subject to the provisions of Sections 8.1 and 8.2, the Holders
of a majority in aggregate principal amount of the Debentures at the time
outstanding, deter-
72
mined in accordance with Section 9.4, shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided
that such direction shall be in accordance with law and the provisions of this
Indenture, and the Trustee shall have the right, subject to the provisions of
Section 8.1, to decline to follow any such direction if the Trustee shall, being
advised by an opinion of counsel, determine that the action so directed may not
be lawfully taken, or if the Trustee in good faith shall, by a Responsible
Officer of the Trustee, determine that the proceeding so directed would be
illegal or involve it in personal liability or that the action so directed would
be unduly prejudicial to the Holders of Debentures not taking part in such
direction; and provided, further, that nothing in this Indenture shall impair
the right of the Trustee to take any action deemed proper by the Trustee and
that is not inconsistent with such direction by the Holders of the Debentures.
Prior to a declaration that the Debentures are due and payable as provided in
Section 7.1, the Holders of a majority in aggregate principal amount of the
Debentures at the time outstanding, determined in accordance with Section 9.4,
may, on behalf of the Holders of all of the Debentures, waive any past default
hereunder and its consequences, except a default in the payment of the principal
of or interest on any of the Debentures. In the case of any such waiver, the
Company, the Trustee and the Holders of the Debentures shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
VII.7. Trustee to Give Notice of Defaults
Known to it, but May Withhold in
Certain Circumstances.
The Trustee shall give to the Debentureholders notice of all
defaults within 90 days of same becoming known to the Trustee, unless such
defaults shall have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 7.7 being the events specified in
Section 7.1 that, upon the passage of time or the giving of notice or both would
constitute
73
Events of Default; provided, however, that, except in the case of default in the
payment of the principal of (or premium, if any) or interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors and/or responsible officers, of the Trustee in good faith determines
that the withholding of such notice is the interest of Debentureholders.
VII.8. Requirement of an Undertaking to Pay
Costs in Certain Suits Under
Indenture or Against Trustee.
All parties to this Indenture agree, and each Holder of any
Debenture by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, 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, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit (and the posting of
such surety bond therefor as such court may require), and that such court may in
its discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to claims or defenses
made by such party litigant; provided that the provisions of this Section 7.8
shall not apply (i) to any suit instituted by the Trustee, (ii) to any suit
instituted by any Debentureholder, or group of Debentureholders, holding in the
aggregate more than ten per cent in aggregate principal amount of the Debentures
outstanding, or (iii) to any suit instituted by any Debentureholder for the
enforcement of the payment of the principal of or interest on any Debenture, on
or after the due date expressed in such Debenture.
VII.9. Company Covenants.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, or plead, any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may af-
74
fect the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee but shall suffer
and permit the execution of every such power as though no such law had been
enacted.
CONCERNING THE TRUSTEE
VIII.1. Duties of Trustee Prior to and After Event of Default.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (which has not
been cured or waived) the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee pursuant to any provision of this Indenture, shall examine them
to determine whether they conform to the requirements of this Indenture.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default which may have
occurred:
(i) the duties and obligations of the Trustee shall
be determined solely by the ex-
75
press provisions of this Indenture, and the Trustee shall not
be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) subject to the third paragraph of this Section
8.1, in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a responsible officer or responsible officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in principal
amount of the Debentures at the time outstanding (determined as
provided in Section 9.4) relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there are reasonable grounds for believing that repayment
of such funds or adequate indemnity (and security therefor) against such risk or
liability is not reasonably assured to it.
VIII.2. Rights of Trustee.
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Except as otherwise provided in Section 8.1:
(a) In the absence of bad faith on the part of the Trustee,
the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officers' Certificate, certificate of
independent public accountants, or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond, debenture or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party
or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an instrument
signed in the name of the Company by the President or a Vice President
and the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer (unless other evidence in respect thereof be
herein specifically prescribed); and any resolution of the Board of
Directors of the Company may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) The Trustee may consult with counsel, and an opinion of
counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(d) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Debentureholders, pursuant to the
provisions of this Indenture, unless such Debentureholders shall have
offered to the Trustee reasonable security and indemnity against the
cost, expenses and liabilities which may be incurred therein or
thereby;
(e) The Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discre-
77
tion or rights or powers conferred upon it by this Indenture;
(f) Prior to learning of the occurrence of an Event of Default
hereunder and after the cure or waiver of all Events of Default which
may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, or other paper or document
unless requested in writing so to do by the Holders of not less than a
majority in aggregate principal amount of the Debentures then
outstanding; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity (and security therefor)
against such expense or liability as a condition to so proceeding. The
reasonable expense of every such investigation shall be paid by the
Company or, if paid by the Trustee, shall be repaid by the Company
upon demand; and
(g) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys.
VIII.3. Trustee Not Liable for Recitals in Indenture or in
Debentures.
The recitals contained herein and in the Debentures (other
than the certificate of authentication on the Debentures) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness or completeness of the same. The Trustee makes no representations as
to the validity, sufficiency or enforceability (except as against the Trustee)
of this Indenture or of the Debentures. The Trustee shall not be accountable for
the use or application by the Company of any of the Debentures or of the
proceeds of such Deben-
78
tures, or for the use or application of any moneys paid over by the Trustee in
accordance with any provision of this Indenture, or for the use or application
of any moneys received by any paying agent other than the Trustee.
VIII.4. Trustee, Paying Agent, Conversion Agent or Debenture
Registrar May Own Debentures.
The Trustee or any Paying Agent or any Conversion Agent or any
Debenture Registrar, in its individual or any other capacity, may buy, own, hold
and sell, as owner or pledgee, Debentures with the same rights it would have if
it were not Trustee, paying agent, conversion agent or Debenture Registrar, and
no such activity shall impair any of the Trustee's rights, remedies or defenses,
or enlarge any of its duties or liabilities under this Indenture.
VIII.5. Moneys Received by Trustee to be Held in Trust.
Subject to the provisions of Article Thirteen, all moneys
received by the Trustee shall, until used or applied as herein provided, be held
in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any moneys received by it hereunder.
VIII.6. Trustee Entitled to Compensation, Reimbursement and
Indemnity.
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created or in the exercise and performance
of any of the powers and duties hereunder of the Trustee, and the Company shall
advance funds to pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made or to be
incurred or made by the
79
Trustee in accordance with any of the provisions of this Indenture (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from the Trustee's own negligence or bad
faith. If any property other than cash shall at any time be subject to a lien in
favor of the Debentureholders, the Trustee, if and to the extent authorized by a
receivership or bankruptcy court of competent jurisdiction or by the
supplemental instrument subjecting such property to such lien, shall be entitled
but shall not be obligated to make advances for the purpose of preserving such
property or discharging tax liens or other prior liens or encumbrances thereon.
The Company also covenants to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on the part of the Trustee, and arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim of liability in the premises. The obligations
of the Company under this Section to compensate and indemnify the Trustee and to
advance funds to pay or reimburse the Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture. Such additional indebtedness
shall be secured by a lien prior to that of the Debentures upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the Holders of particular Debentures. When the Trustee incurs
expenses or renders services after an Event of Default specified in Section 7.1
(f) or (g) occurs, the expenses and the compensation for services are intended
to constitute expenses of administration under any Bankruptcy Law.
VIII.7. Right of Trustee to Rely on Certificate of Officers of
Company Where no Other Evidence Specifically
Prescribed.
Except as otherwise provided in Section 8.1, whenever in the
administration of the trusts or the performance of this Indenture the Trustee
shall deem it nec-
80
xxxxxx or desirable that a matter be proved or established prior to taking or
suffering or omitting any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by an Officers' Certificate, and such
certificate shall be full warrant of such action taken, suffered or omitted by
it under the provisions of this Indenture upon the faith thereof.
VIII.8. Conflict of Interest.
(a) Trustee Acquiring Conflicting Interest to Eliminate
Conflict or Resign. If the Trustee has or shall acquire any conflicting interest
within the meaning of Trust Indenture Act Section 310(b), it shall, within 90
days after ascertaining that it has such conflicting interest, either eliminate
such conflicting interest or resign, such resignation to become effective upon
the appointment of a successor trustee and such successor's acceptance of such
appointment, and the Company shall take prompt steps to have a successor
appointed in the manner provided in Section 8.10.
(b) Notice to Debentureholders in Case of Failure to Comply
with Subsection (a). In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section, the Trustee shall, within ten days
after the expiration of such ninety-day period, transmit notice of such failure
to the Debentureholders in the manner and to the extent provided in subsection
(c) of Section 6.4 with respect to reports pursuant to subsection (a) of said
Section 6.4.
VIII.9. Requirements for Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States or any State or
Territory or of the District of Columbia authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least one
million dollars ($1,000,000), subject to supervision or examination by Federal,
State, Territorial, or District of Columbia authority. If such
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corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.10.
VIII.10. Resignation or Removal of Trustee.
(a) Resignation of Trustee. The Trustee, or any successor
hereafter appointed, may at any time resign and be discharged from the trust
hereby created by giving written notice thereof to the Company. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, executed by order of the Board of
Directors of the Company, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment within thirty days
after the giving of such notice of resignation the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or any Debentureholder who has been a bona fide Holder of a Debenture
or Debentures for at least six months may, subject to the provisions of Section
7.8, on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) Removal of Trustee by Company or by Court on
Debentureholders' Application. In case any of the following shall occur at any
time:
(i) the Trustee shall fail to comply with the
provisions of subsection (a) of Section 8.8 after written
request therefor by the Company or
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by any Debentureholder who has been a bona fide Holder of a
Debenture or Debentures for at least six months, or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.9 and shall fail
to resign after written request therefor by the Company or by
any such Debentureholder, or
(iii) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 7.8, any Debentureholder who has been a
bona fide Holder of a Debenture or Debentures for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) Removal of Trustee by Holders of Majority in Principal
Amount of Debentures. The Holders of a majority in aggregate principal amount of
the Debentures at the time outstanding may at any time remove the Trustee and
appoint a successor trustee by written instrument or instruments, in triplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Company, another to the
Trustee so removed and one complete set to the successor so appointed.
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(d) Time When Resignation or Removal of Trustee Effective. Any
resignation or removal of the Trustee and any appointment of a successor trustee
pursuant to any of the provisions of this Section shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.11.
(e) Notice to be Given by the Company. The Company shall give
written notice of each resignation and each removal of the Trustee and each
appointment of a successor trustee by mailing written notice of such event by
first class mail or air mail, as appropriate, to the Holders of the Debentures
as their names and addresses appear in the Debenture register. Each notice of
the appointment of a successor trustee shall include the name of each successor
and the address of its corporate trust office.
VIII.11. Acceptance by Successor to Trustee.
Any successor trustee appointed as provided in Section 8.10
shall execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein. The predecessor trustee shall, nevertheless, at the written request of
the Company or the successor trustee, upon payment of any amount due it and then
unpaid, pay over to the successor trustee all moneys at the time held by it
hereunder; and the Company and the predecessor trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in
this Section unless at the time of such accep-
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tance such successor trustee shall be qualified under the provisions of Section
8.8 and eligible under the provisions of Section 8.9.
VIII.12. Successor to Trustee by Merger, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided such corporation shall be qualified under the
provisions of Section 8.8 and eligible under the provisions of Section 8.9,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
VIII.13. Trustee as a Creditor.
(a) Limitations on Rights of Trustee as a Creditor to Obtain
Payment of Certain Claims Within Four Months Prior to Default or During Default,
or to Realize on Property as Such Creditor Thereafter. Subject to the provisions
of subsection (b) of this Section, if the Trustee in its individual capacity
shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of the Company or of any other obligor on the Debentures within four
months prior to a default, as defined in subsection (c) of this Section, or
subsequent to such a default, then, unless and until such default shall be
cured, the Trustee shall set apart and hold in a special account for the benefit
of the Trustee individually, the Holders of the Debentures and the Holders of
other indenture securities (as defined in subsection (c) of this Section)
(i) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in
respect of principal or interest, effected after the beginning
of such four months' period and valid as against the
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Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property
described in paragraph (2) of this subsection, or from the
exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or
against the Company upon the date of such default; and
(ii) all property received by the Trustee in respect
of any claim as such creditor, either as security therefor, or
in satisfaction or composition thereof, or otherwise, after
the beginning of such four months' period, or an amount equal
to the proceeds of any such property, if disposed of, subject,
however, to the rights, if any, of the Company and its other
creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee
(A) to retain for its own account (i) payments made
on account of any such claim by any person (other than the
Company) who is liable thereon, and (ii) the proceeds of the
bona fide sale of any such claim by the Trustee to a third
person, and (iii) distributions made in cash or other property
in respect of claims filed against the Company in bankruptcy
or receivership or in proceedings for reorganization pursuant
to Federal bankruptcy law or applicable State law;
(B) to realize, for its own account, upon any
property held by it as security for any such claim, if such
property was so held prior to the beginning of such four
months' period;
(C) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property
held by it as security for any such claim, if such claim was
created after the beginning of such four months'
86
period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause
to believe that a default, as defined in subsection (C) of
this Section, would occur within four months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any such property
held as security for such claim as provided in such paragraph
(B) or (C), as the case may be, to the extent of the fair
value of such property.
For the purpose of paragraphs (B), (C), and (D), property
substituted after the beginning of such four months' period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Debentureholders and the Holders of other
indenture securities in such manner that the Trustee, the Debentureholders and
the Holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to Federal bankruptcy law or applicable State law, the same percentage
of their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee, the Debentureholders and the Holders of other
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indenture securities, dividends on claims filed against the Company in
bankruptcy or receivership or in proceeding for reorganization pursuant to
Federal bankruptcy law or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or in proceedings for reorganization
pursuant to Federal bankruptcy law or applicable State law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion among the
Trustee, the Debentureholders and the Holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee, the Debentureholders and the Holders of other indenture securities
with respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the
beginning of such four months' period shall be subject to the provisions of this
subsection (a) as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such four months'
period, it shall be subject to the provisions of this subsection (a) if and only
if the following conditions exist:
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(iii) the receipt of property or reduction of claim
which would have given rise to the obligation to account, if
such Trustee had continued as trustee, occurred after the
beginning of such four months' period; and
(iv) such receipt of property or reduction of claim
occurred within four months after such resignation or removal.
(b) Certain Creditor Relationships Excluded. There shall be
excluded from the operation of subsection (a) of this Section, a
creditor relationship arising from
(i) the ownership or acquisition of securities
issued under any indenture, or any security or securities
having a maturity of one year or more at the time of
acquisition by the Trustee;
(ii) advances authorized by a receivership or
bankruptcy court of competent jurisdiction, or by this
Indenture, for the purpose of preserving any property which
shall at any time be subject to the lien of this Indenture or
of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advance and of the circumstances
surrounding the making thereof is given to the
Debentureholders at the time and in the manner provided in
Section 6.4 of this Indenture;
(iii) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture,
transfer agent, registrar, custodian, paying agent, fiscal
agent or depositary, or other similar capacity;
(iv) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a
result of goods or securities sold in a cash transaction as
defined in subsection (c) of this Section;
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(v) the ownership of stock or of other securities of
a corporation organized under the provisions of Section 25(a)
of the Federal Reserve Act, as amended, which is directly or
indirectly a creditor of the Company; or
(i) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange, acceptances or
obligations which fall within the classification of
self-liquidating paper as defined in subsection (c) of this
Section.
(c) Definition of Certain Terms. As used in this Section:
(i) The term "default" shall mean any failure to
make payment in full of the principal of (or premium, if any)
or interest upon any of the Debentures or upon the other
indenture securities when and as such principal or interest
becomes due and payable.
(ii) The term "other indenture securities" shall
mean securities upon which the Company is an obligor (as
defined in the Trust Indenture Act of 1939) outstanding under
any other indenture (A) under which the Trustee is also
trustee, (B) which contains provisions substantially similar
to the provisions of subsection (a) of this Section, and (C)
under which a default exists at the time of the apportionment
of the funds and property held in said special account.
(iii) The term "cash transaction" shall mean any
transaction in which full payment for goods or securities sold
is made within seven days after delivery of the goods or
securities in currency or checks or other orders drawn upon
banks or bankers and payable upon demand.
(iv) The term "self-liquidating paper" shall mean
any draft, xxxx of exchange, acceptance or obligation which is
made, drawn, nego-
90
tiated or incurred by the Company for the purpose of financing
the purchase, processing, manufacture, shipment, storage or
sale of goods, wares or merchandise and which is secured by
documents evidencing title to, possession of, or a lien upon,
the goods, wares or merchandise or the receivables or proceeds
arising from the sale [of] goods, wares or merchandise
previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of
the creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, xxxx
of exchange, acceptance or obligation.
(v) The term "Company" shall mean any obligor upon
the Debentures.
IX
CONCERNING THE DEBENTUREHOLDERS
IX.1 Evidence of Action by Debentureholders.
Whenever in this Indenture it is provided that the Holders of
a specified percentage in aggregate principal amount of the Debentures may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the fact that at
the time of taking any such action the Holders of such specified percentage have
joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by Debentureholders in person or by
attorney or proxy appointed in writing, or (b) by the record of the Holders of
Debentures voting in favor thereof at any meeting of Debentureholders duly
called and held in accordance with the provisions of Article Ten, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Debentureholders.
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IX.2. Proof of Execution of Instruments and of Holding of
Deben-tures.
Subject to the provisions of Sections 8.1, 8.2 and 10.5, proof
of the execution of any instrument by a Debentureholder or his attorney or proxy
and proof of the holding by any person of any of the Debentures shall be
sufficient for any purpose of this Indenture if made in the following manner:
(a) The fact and date of the execution by any such person of
any instrument shall be proved by the certificate of any notary
public, or other officer of any jurisdiction of or within the United
States of America authorized to take acknowledgments or deeds, that
the person executing such instrument acknowledged to him the execution
thereof, or by an affidavit of a witness to such execution sworn to
before any such notary or other such officer. Where such execution is
by an officer of a corporation or association or a member of a
partnership on behalf of such corporation, association or partnership,
such certificate or affidavit shall also constitute sufficient proof
of his authority.
(b) The ownership of Debentures shall be proved by the
registers of such Debentures or by a certificate of any duly appointed
registrar thereof.
The Trustee shall not be bound to recognize any person as a
Debentureholder unless and until his title to the Debentures held by him is
proved in the manner in this Article provided.
The record of any Debentureholders' meeting shall be proved in
the manner provided in Section 10.6.
The Trustee may accept such other proof or require such
additional proof of any matter referred to in this Section as it shall deem
appropriate.
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IX.3. Who May be Deemed Owners of Debentures.
The Company, the Trustee, any paying agent, any conversion
agent and any Debenture Registrar may deem and treat the person in whose name
any Debenture shall be registered upon the books of the Company as the absolute
owner of such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other
than the Company or any Debenture Registrar) for the purpose of receiving
payment of or on account of the principal of (and premium, if any) and interest
on (subject to the provisions of Section 2.2) such Debenture and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
conversion agent nor any Debenture Registrar shall be affected by any notice to
the contrary. All such payments so made to any such registered Holder for the
time being or upon his order shall be valid and, to the extent of the sum or
sums so paid, effective to satisfy and discharge the liability for money payable
upon any such Debenture.
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IX.4. Debentures Owned by Company or Controlled or Controlling
Companies Disregarded for Certain Purposes.
In determining whether the Holders of the requisite aggregate
principal amount of Debentures have concurred in any direction, consent or
waiver under this Indenture, Debentures which are owned by the Company or any
other obligor on the Debentures, or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Debentures, shall be disregarded and deemed
not to be outstanding for the purpose of any such determination, except that for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver, only Debentures which the Trustee knows
are so owned shall be so disregarded. Debentures so owned which have been
pledged in good faith may be regarded as outstanding for the purposes of this
Section, if the pledgee shall establish to the satisfaction of the Trustee the
pledgee's right to vote such Debentures and that the pledgee is not a person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In case of a dispute
as to such right, any decision by the Trustee taken upon an Opinion of Counsel
shall be full protection to the Trustee.
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IX.5. Action by Debentureholders Binds Future Holders.
Any demand, request, waiver, consent or vote of the Holder of
any Debenture shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Debenture, and of any Debenture issued in
exchange therefor or in place thereof, irrespective of whether or not any
notation in regard thereto is made upon such Debenture. Any action taken by the
Holders of the percentage in aggregate principal amount of the Debentures
specified in this Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the Holders of all the Debentures.
X
DEBENTUREHOLDERS' MEETINGS
X.1. Purposes for Which Meetings May be Called.
A meeting of Debentureholders may be called at any time and
from time to time pursuant to the provisions of this Article for any of the
following purposes:
(a) to give any notice to the Company or the
Trustee, or to give any directions to the Trustee, or to
consent to the waiving of any default hereunder and its
consequences, or to take any other action authorized to be
taken by Debentureholders pursuant to any of the provisions of
Article Seven; or
(b) to remove the Trustee and appoint a successor
trustee pursuant to the provisions of Article Eight; or
(c) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of
Section 11.2; or
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(c) to take any other action authorized to be taken
by or on behalf of the Holders of any specified aggregate
principal amount of the Debentures under any other provision
of this Indenture, or authorized or permitted by law.
X.2. Manner of Calling Meetings.
The Trustee may at any time call a meeting of Debentureholders
to take any action specified in Section 10.1, to be held at such time and at
such place in New York, New York, as the Trustee shall determine. Notice of
every meeting of the Debentureholders, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be delivered promptly by the Trustee, not less than 10 days nor
more than 60 days prior to the date fixed for the meeting, to the Company and
the Holders of the Debentures at their last addresses as they shall appear upon
the register or registers.
Any meeting of Debentureholders shall be valid without notice
if the Holders of all Debentures then outstanding are present in person or by
proxy, or if notice is waived before or after the meeting by the Holders of all
Debentures outstanding, and if the Company and the Trustee are either present by
duly authorized representatives or have, before or after the meeting, waived
notice.
X.3. Call of Meetings by Company or Debentureholders.
In case at any time the Company, pursuant to resolution of its
Board of Directors, or the Holders of at least 25% in aggregate principal amount
of the Debentures then outstanding, shall have requested the Trustee to call a
meeting of Debentureholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed the notice of such meeting within ten days after receipt of such
request, then the Company or the Holders of Debentures in the amount above
specified may determine the time and the place, in New York, New York, for such
meeting and may call such meeting to take any action authorized in
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Section 10.1, by mailing notice thereof as provided in Section 10.2.
X.4. Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Debentureholders a
person shall (a) be a registered Holder of one or more Debentures or (b) be a
person appointed by an instrument in writing as proxy for the registered Holder
or Holders of Debentures. The only persons who shall be entitled to be present
or to speak at any meeting of Debentureholders shall be the persons entitled to
vote at such meeting and their counsel and any representatives of the Trustee
and any representatives of the Company and its counsel. Notwithstanding the
foregoing, the Trustee may fix, in advance, a Record Date for the determination
of the Debentureholders entitled to notice of or to vote at any meeting of
Debentureholders or any adjournment thereof, which date shall not be more than
60 days nor less than 10 days prior to the date fixed for the meeting.
X.5 Regulations May be Made by Trustee.
Notwithstanding any other provision of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Debentureholders, in regard of proving the holding of Debentures and
of the appointment of proxies, and in regard of the appointment and duties of
inspectors of votes, and the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit. Except as otherwise permitted or
required by any such regulations, the holding of Debentures shall be proved in
the manner specified in Section 9.2 and the appointment of any proxy shall be
proved in the manner specified in said Section 9.2 or by having the signature of
the person executing the proxy witnessed or guaranteed by any bank, banker or
trust company deemed by the Trustee to be satisfactory.
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The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Debentureholders as provided in Section 10.3, in which case
the Company or the Debentureholders calling the meeting, as the case may be,
shall (in like manner) appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the Holders of a
majority in aggregate principal amount of the Debentures represented at the
meeting and entitled to vote.
Subject to the provisions of Section 9.4 and 10.4, at any
meeting each Debentureholder or proxy shall be entitled to one vote for each SF
1,000 principal amount of Debentures; provided, however, that no vote shall be
cast or counted at any meeting in respect of any Debentures challenged as not
outstanding and ruled by the chairman of the meeting to be not outstanding. The
chairman of the meeting shall have no right to vote other than by virtue of
Debentures held by him or instruments in writing as aforesaid duly designating
him as the person to vote on behalf of other Debentureholders. At any meeting of
Debentureholders, the presence of persons holding or representing Debentures in
an aggregate principal amount sufficient to take action on the business for the
transaction of which such meeting was called shall constitute a quorum. Any
meeting of Debentureholders duly called pursuant to the provisions of Sections
10.2 or 10.3 may be adjourned from time to time by the vote of the Holders of a
majority in aggregate principal amount of the Debentures represented at the
meeting and entitled to vote, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
X.6. Manner of Voting at Meetings and Record to be Kept.
The vote upon any resolution submitted to any meeting of
Debentureholders shall be by written ballots on which shall be subscribed the
signatures of the Holders of Debentures or of their representatives by proxy and
the principal amount of the Debentures voted by the ballot. The permanent
chairman of the meeting shall appoint two
98
inspectors of votes, who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Debentureholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts, setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 10.2. The record
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
X.7. Exercise of Rights of Trustee or Debentureholders May Not
be Hindered or Delayed by Call of Meeting of
Debentureholders.
Nothing in this Article Ten contained shall be deemed or
construed to authorize or permit, by reason of any call of a meeting of
Debentureholders or any rights expressly or impliedly conferred hereunder to
make such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Debentureholders under any
of the provisions of this Indenture or of the Debentures.
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X.8. Notice to Debentureholders.
Any notice required to be given, mailed or delivered by the
Trustee to Debentureholders shall be sufficiently given, mailed or delivered if
mailed by first class mail to Debentureholders whose addresses of record are
within the United States or if mailed via airmail to Debentureholders whose
addresses of record are outside the United States.
XI
SUPPLEMENTAL INDENTURES
XI.1. Purposes for Which Supplemental Indentures May be
Entered into Without Consent of Debentureholders.
The Company, when authorized by a resolution of its Board of
Directors, and the Trustee, subject to the conditions and restrictions in this
Indenture contained, may from time to time and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Company pursuant to Article Twelve;
(b) to add to the covenants and agreements of the Company in
this Indenture, to contain such further covenants and agreements
thereafter to be observed, or to surrender any right or power herein
reserved to or conferred upon the Company;
(c) to cure any ambiguity or to correct or supplement any
defective or inconsistent provision contained in this Indenture or in
any supplemental indenture;
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to make provisions with respect to the conversion rights of Holders
of Debentures pursuant to the requirements of Section 4.3(b);
(d) to make such provisions with respect to matters or
questions arising under this Indenture as may be necessary or
desirable and not inconsistent with this Indenture that shall not
adversely effect the interests of the Debentureholders; and
(f) to evidence and provide for the acceptance of appointment
hereunder of a successor Trustee.
The Trustee is hereby authorized to join with the Company in
the execution of any supplemental indenture authorized or permitted by the terms
of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed by the Company and the Trustee without the consent
of the Holders of any of the Debentures at the time outstanding, notwithstanding
any of the provisions of Section 11.2.
XI.2. Modification of Indenture with Consent of Holders of
66-2/3% in Principal Amount of Debentures.
With the consent (evidenced as provided in Section 9.1) of the
Holders (or persons entitled to vote, or to give consents respecting the same)
of not less than 66 2/3% in aggregate principal amount of the Debentures at the
time outstanding, the Company, when authorized by a resolution of its Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the
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rights and obligations of the Holders of the Debentures and of the Company;
provided that, without the consent of the Holders of all Debentures then
outstanding, no such supplemental indenture shall (i) extend the fixed maturity
of any Debenture, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, or (ii) alter the provisions of Article IV hereof
respecting conversion of the Debentures so as to affect the Debentures
adversely, or (iii) modify any of the provisions of this Indenture with respect
to the subordination of the Debentures in a manner adverse to the Holders
thereof, or (iv) reduce the aforesaid percentage of Debentures, the Holders of
which are required to consent to any such supplemental indenture.
Upon the request of the Company, accompanied by a copy of a
resolution of its Board of Directors certified by the Secretary or an Assistant
Secretary of the Company authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Debentureholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the
Debentureholders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Company shall mail a notice, postage prepaid, setting forth in general terms the
substance of such supplemental indenture, to all Debentureholders at their last
addresses appearing upon the register or registers. Any failure of the Company
to mail such notice, or any defect therein, shall not, howev-
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er, in any way impair or affect the validity of any such supplemental indenture.
XI.3. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture by the
Company and the Trustee pursuant to the provisions of this Article or Article
Twelve, this Indenture shall be and be deemed to be modified and amended in
accordance therewith, and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the Holders of Debentures shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
XI.4. Debentures May Bear Notation of Changes.
Debentures authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article or Article
Twelve, or after any action taken at a Debentureholders' meeting pursuant to
Article Ten, may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture or as to any action taken at
any such meeting; and, in such case, suitable notation may be made upon
outstanding Debentures after proper presentation and demand. If the Company or
the Trustee shall so determine, new Debentures so modified as to conform, in the
opinion of the Trustee and the Board of Directors of the Company, to any
modification of this Indenture contained in any supplemental indenture, or to
any action taken at any such meeting, may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures then
outstanding, upon demand of, and without cost to, the Holders thereof upon
surrender of such Debentures.
XI.5. Opinion of Counsel.
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The Trustee, subject to the provisions of Section 8.1, may
require and receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article is authorized or
permitted by the terms of this Indenture and that it is not inconsistent
therewith.
XII
CONSOLIDATION OR MERGER
XII.1. When Company May Merge, Etc.
The Company shall not consolidate with or merge with or into
any other Person or transfer (by lease, assignment, sale or otherwise) all or
substantially all of its properties and assets, in a single transaction or
through a series of related transactions, as an entirety or substantially as an
entirety to another Person or group of affiliated Persons unless:
(a) either the Company shall be the continuing Person, or the
Person (if other than the Company) formed by such consolidation or
into which the Company is merged or to which the properties and assets
of the Company as an entirety or substantially as an entirety are
transferred shall be a Person organized and existing under the laws of
the United States of America or any State thereof 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, all the obligations of the Company under the Debentures
and this Indenture; provided that a corporation at all times shall be
a co-obligor together with the continuing Person or transferee if the
continuing Person or transferee is itself not a corporation;
(b) immediately before and immediately after giving effect to
such transaction, no Event of Default and no Default shall have
occurred and be continuing; and
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(c) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer or lease and such supplemental
indenture comply with this Article XII and that all conditions
precedent herein provided relating to such transaction have been
complied with.
The foregoing shall not be applicable with respect to a
consolidation, merger or transfer that involves less than 25% of the assets of
the Company.
Notwithstanding (a) through (c), any Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or any other Subsidiary or Subsidiaries.
XII.2. Successor Corporation.
Upon any consolidation or merger, or any transfer of assets of
the Company in accordance with Section 12.1, the successor Person formed by such
consolidation or into which the Company is merged or to which such transfer 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. When a successor Person
assumes all of the obligations of the Company hereunder and under the
Debentures, the predecessor shall be released from such obligation.
XIII
SUBORDINATION OF DEBENTURES
XIII.1. Agreement of Debentureholders that Debentures
Subordinate to All Senior Indebtedness.
The Company, for itself, its successors and assigns, covenants
and agrees and each Holder of the Debentures by his acceptance thereof likewise
covenants and
105
agrees that the payment of the principal, premium, if any, and interest on each
and all of the Debentures is hereby expressly subordinated, to the extent and in
the manner hereinafter set forth, to the prior payment in full of all Senior
Indebtedness. The provisions of this Article XIII shall constitute a continuing
offer to all persons who, in reliance upon such provisions, become Holders of,
or continue to hold, Senior Indebtedness, and such provisions are made for the
benefit of the Holders of Senior Indebtedness and such Holders are hereby made
obligees hereunder, the same as if their names were written herein as such, and
they and/or each of them may proceed to enforce such provisions.
XIII.2. Company Not to Make Payment with Respect to Debentures
in Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof (and premium, if any,)
and interest thereon shall first be paid in full, or such payment duly provided
for in cash or in a manner satisfactory to the Holder or Holders of such Senior
Indebtedness, before any payment by the Company is made on account of the
principal of (and premium, if any,) or interest on the Debentures or to acquire
any of the Debentures.
(b) Upon the happening of an event of default with respect to
any Senior Indebtedness, as such event of default is defined therein or in the
instrument under which it is outstanding, permitting the Holders to accelerate
the maturity thereof, and, if the default is other than default in payment of
the principal of (and premium, if any,) or interest on such Senior Indebtedness,
upon written notice thereof given to the Company and the Trustee by the Holder
or Holders of such Senior Indebtedness or their representative or
representatives, then unless and until such event of default shall have been
cured or waived or shall have ceased to exist, no payment shall be made by the
Company with respect to the principal of or interest on the Debentures or to
acquire any of the Debentures, provided that within 180 days after the happening
106
of such event of default the Holders of the Senior Indebtedness accelerate the
maturity thereof.
(c) Notwithstanding any other provision of this Section 13.2,
if the Company shall make any payments to the Trustee on account of the
principal of (and premium, if any) or interest on the Debentures after the
happening of a default in payment of the principal of (and premium, if any) or
interest on Senior Indebtedness, or after receipt by the Company and the Trustee
of written notice as provided in Section 13.6 of this Indenture of an event of
default with respect to any Senior Indebtedness, then, unless and until such
default or event of default shall have been cured or waived or shall have ceased
to exist, such payment (subject to the provisions of Sections 13.6 and 13.7 of
this Indenture) shall be held by the Trustee, in trust for the benefit of, and
shall be paid forthwith over and delivered to, the Holders of Senior
Indebtedness (pro rata as to each of such Holders on the basis of the respective
amounts of Senior Indebtedness held by them) or their representative or the
trustee under the indenture or other agreement (if any) pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in accordance with the terms of such Senior Indebtedness
after giving effect to any concurrent payment or distribution to or for the
Holders of Senior Indebtedness.
(d) The Trustee shall be under no obligation to enforce the
Company's agreement, pursuant to Section 13.2 (a) and (b) of this Indenture, not
to make payments to acquire any of the Debentures or to take any action upon the
breach of such agreement.
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XIII.3. Debentures Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or
Reorganization of the Company.
Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):
(a) The Holders of all Senior Indebtedness shall first be
entitled to receive payment in full of the principal (and premium, if any)
thereof, and interest due thereon before the Holders of the Debentures are
entitled to receive any payment on account of the principal of (and premium, if
any) or interest on the Debentures (other than payment in shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, which
stock and securities are subordinated to the payment of all Senior Indebtedness
and securities received in lieu thereof which may at the time be outstanding);
and
(b) Any payment or distribution of assets of the Company of
any kind of character, whether in cash, property or securities (other than
shares of stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of reorganization
readjustment, which stock and securities are subordinated to the payment of all
Senior Indebtedness and securities received in lieu thereof which may at the
time be outstanding), to which the Holders of the Debentures or the Trustee
would be entitled except for the provisions of this Article Thirteen, shall be
paid by the liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or other trustee or agent, directly to the Holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, to the extent necessary to make payment in
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full of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution or provision therefor to the Holders of such
Senior Indebtedness.
(c) In the event that notwithstanding the foregoing provisions
of this Section 13.3, any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (other than
shares of stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of reorganization or
readjustment, which stock and securities are subordinated to the payment of all
Senior Indebtedness and securities received in lieu thereof which may at the
time be outstanding), shall be received by the Trustee or the Holders of the
Debentures on account of principal (and premium, if any) or interest on the
Debentures before all Senior Indebtedness is paid in full, or effective
provision made for its payment, such payment or distribution (subject to the
provisions of Sections 13.6 and 13.7 of this Indenture) shall be received and
held in trust for and shall be paid over to the Holders of the Senior
Indebtedness remaining unpaid or unprovided for or their representative or
representatives, or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
for application to the payment of such Senior Indebtedness until all such Senior
Indebtedness shall have been paid in full, after giving effect to any concurrent
payment or distribution or provision therefor to the Holders of such Senior
Indebtedness.
XIII.4. Debentureholders to be Subrogated to Right of Holders
of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Debentures shall be subrogated to the rights of the Holders of
Senior Indebtedness to receive payments or distributions of assets of the
Company applicable to the Senior Indebtedness until all amounts owing on the
Debentures shall be paid in full, and for the purpose of such subrogation, no
payments or distributions to the Holders of the Senior Indebtedness by o
109
on behalf of the Company or by or on behalf of the Holders of the Debentures by
virtue of this Article Thirteen which otherwise would have been made to the
Holders of the Debentures, shall be deemed to be payment by the Company to or on
account of the Senior Indebtedness, it being understood that the provisions of
this Article Thirteen are and are intended solely for the purpose of defining
the relative rights of the Holders of the Debentures, on the one hand, and the
Holders of the Senior Indebtedness, the other hand.
XIII.5. Obligations of Company Unconditional.
Nothing contained in this Article Thirteen or elsewhere in
this Indenture or in the Debentures is intended to or shall impair as between
the Company and the Holders of the Debentures, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Debentures the
principal of, premium, if any, and interest on the Debentures, or make payments
in respect of the sinking fund, for the Debentures, as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or the Holder of any
Debenture from exercising all rights and remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article Thirteen of the Holders of Senior Indebtedness in respect of
cash, property, or securities of the Company received upon the exercise of any
such remedy. Upon any distribution of assets of the Company referred to in this
Article Thirteen, the Trustee, subject to the provisions of Section 8.l of this
Indenture, and the Holders of the Debentures shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders of the Debentures, for the purpose
of ascertaining the persons to participate in such distribution, the Holders of
the Senior Indebtedness and other indebtedness of the Company,
111
the amount thereof and all other facts pertinent thereto or to this Article
Thirteen.
XIII.6 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Company shall give prompt written notice to the Trustee of
any default under any Senior Indebtedness or under any agreement pursuant to
which Senior Indebtedness may have been issued. Notwithstanding the provisions
of Section 13.1 of this Indenture or any other provision of this Indenture, the
Trustee shall not at any time be charged with knowledge of the existence of any
facts which would prohibit the making of any payment of monies to or by the
Trustee, unless and until the Trustee shall have received at the principal
office of the Trustee, written notice thereof from the Company or from one or
more Holders of Senior Indebtedness or from any trustee therefor; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Section 8.1 of this Indenture, shall be entitled to assume conclusively that
no such facts exist.
The Trustee shall be entitled to rely on the delivery to it of
a written notice by a person representing himself to be a Holder of Senior
Indebtedness (or a trustee on behalf of such Holder) to establish that such
notice has been given by a Holder of Senior Indebtedness or a trustee on behalf
of any such Holder or Holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any person
as a Holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Thirteen the Trustee may, at its discretion, request
such person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such person, the extent to which
such person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such person under this Article Thirteen,
and, if such evidence is not furnished, the Trustee may defer any payment to
such person pending judicial determination as to the right of such person to
receive such payment, but the Trustee
111
shall not be obligated to institute a judicial proceeding for such purpose; nor
shall the Trustee be charged with knowledge of the curing or waiver of any event
of default of the character referred to in Section 13.2(b) of this Indenture or
that any event or any condition preventing any payment in respect of the
Debentures shall have ceased to exist, unless and until the Trustee shall have
received an Officers' Certificate to such effect.
XIII.7. Application by Trustee of Monies Deposited.
Anything in this Indenture to the contrary notwithstanding,
any deposit of moneys by the Company with the Trustee or any paying agent
(whether or not in trust) for the payment of the principal of (and premium, if
any) or interest on any Debentures shall be subject to the provisions of
Sections 13.1, 13.2, 13.3, and 13.4 of this Indenture except that, if not less
than one day prior to the date on which by the terms of this Indenture any such
monies may become payable for any purpose (including, without limitation, the
payment of either the principal of (and premium, if any) or the interest on any
Debenture and any amounts immediately due and payable upon the execution of any
instrument acknowledging satisfaction and discharge of this Indenture, as
provided in Article Fourteen) the Trustee shall not have received with respect
to such monies the notice provided for in Section 13.6, then anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such date.
XIII.8. Subordination Rights Not Impaired.
Nothing in this Indenture shall: (i) impair, as between the
Company and Holders of Debentures, the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest on the Debentures
in accordance with their terms; (ii) affect the relative rights of Holders of
Debentures and creditors of the Company , other than holders of Senior
Indebtedness; or (iii) prevent any Holder of Debentures from exercising its
available remedies upon a default, subject to the rights of holders of Senior
Indebtedness to receive distributions otherwise payable to Holders of
Debentures. If the Company fails because of this Section 13.8 to pay principal
of or interest on a Debenture on the due date, such failure shall nevertheless
be deemed a default. For the purpose of this Section 13.8, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default as defined in Section 7.1.
The Trustee or any Paying Agent may continue to make payments
on the Debentures and shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of such payments until it
receives notice reasonably satisfactory to it that payments may not be made
under this Section 13.8 and, prior to the receipt of any such notice, the
Trustee shall be entitled to assume conclusively that no such facts exist.
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XIII.9. Trustee to Effectuate Subordination.
Each Holder of the Debentures by his acceptance thereof
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Thirteen and irrevocably appoints the Trustee his attorney-in-fact
for such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise) tending towards liquidation of the business and assets of the
Company, the authority to file a claim for the unpaid balance of its or his
Debentures in the form required in said proceedings and to cause said claim or
proof of debt to be approved. If the Trustee does not exercise its authority to
file a proper claim or proof of debt in the form required in such proceeding
prior to thirty days before the expiration of the time to file such claim or
claims, then the Holder or Holders of Senior Indebtedness are hereby authorized
to and have the right to file and are hereby authorized to file an appropriate
claim for an on behalf of the Holders of said Debentures.
XIII.10. Rights of Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth
in this Article Thirteen in respect of any Senior Indebtedness, at any time held
by it to the same extent as any other Holder of Senior Indebtedness, and nothing
in Section 8.13 of this Indenture or elsewhere in this Indenture shall be
construed to deprive the Trustee or any of its rights as such Holder.
XIII.11. Article Thirteen Not to Prevent Event of Default.
The failure to make a payment on account of principal,
premium, if any, or interest by reason of any provision in this Article Thirteen
shall not be construed
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as preventing the occurrence of an Event of Default under Section 7.1 of the
Indenture.
XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
DEPOSITED MONEYS
XIV.1. Satisfaction and Discharge of Indenture.
If the Company shall deliver to the Trustee for cancellation
all Debentures theretofore authenticated (other than any Debentures that shall
have been destroyed, lost or stolen and that shall have been replaced or paid as
provided in Section 2.9) and not theretofore cancelled, or if all the Debentures
not theretofore delivered to the Trustee for cancellation shall have become due
and payable (the date on which such Debentures become due and payable being
hereinafter in this Article XIV called the "maturity date"), or shall have been
called for redemption pursuant to Article III hereof, or provision satisfactory
to the Trustee shall have been made for the giving of notice of redemption as
provided in said Article III, and the Company shall have deposited in trust with
the Trustee or with any paying agent (other than the Company) funds (to be
immediately available for payment) sufficient to pay at maturity or upon
redemption all of the Debentures (other than any Debentures which have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 2.7) not theretofore cancelled or delivered to the Trustee for
cancellation, including principal (and premium, if any) and interest due or to
become due to such maturity date or date fixed for redemption, as the case may
be, then:
(a) this Indenture shall cease to be of further effect (except
as to any remaining rights of registration of transfer, of exchange and
to convert the Debentures prior to the close of business on the date
fixed for redemption into Common Stock as provided in Article IV) and
on or after such maturity date or date fixed for redemption, as the
case may be, the Trustee, on demand of the Company accompanied by an
115
Officers' Certificate and an Opinion of Counsel, and at the cost and
expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture; and
(b) all obligations of the Company in respect of the
Debentures shall cease and be discharged, and the Holders of such
Debentures shall thereafter be restricted exclusively to such funds for
any and all claims of whatsoever nature on their part under this
Indenture or with respect to such Debentures.
Notwithstanding the satisfaction and discharge of this
Indenture, the rights, remedies, immunities and defenses of the Trustee under
this Indenture, including but not limited to those contained in Section 8.1,
with respect to actions taken or omitted to be taken pursuant to this Indenture
and events occurring prior to such satisfaction and discharge, and the
obligations of the Company to the Trustee under Section 8.6, shall survive.
XIV.2. Application by Trustee of Funds Deposited for Payment
of Debentures.
All moneys deposited with the Trustee pursuant to Section 14.1
shall be held in trust and applied by it to the payment to the Holders of the
particular Debentures, for the payment or redemption of which such moneys have
been deposited with the Trustee, of all sums due and to become due thereon for
principal (and premium, if any) and interest.
XIV.2. Repayment of Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture all moneys then held by any Paying Agent under the provisions of this
Indenture shall, upon demand of the Company or the Trustee, be paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
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XIV.4. Moneys Deposited for Redemption of Debentures
Subsequently Converted to be Returned to Company.
All moneys deposited with the Trustee or any paying agent for
the payment or redemption of Debentures subsequently converted shall be returned
to the Company upon its written request. All moneys deposited with any
conversion agent in connection with the Debentures surrendered for conversion
between the Record Date for the payment of interest on the Debentures and the
interest payment date of such interest shall be paid over to the Company
promptly after such interest payment date.
XIV.5. Payment of Deposited Money to Company After Lapse of
Time.
In case the Holder of any Debenture entitled to payment
hereunder at any time outstanding hereunder shall not, within two years after
the maturity date of such Debenture, or if such Debenture shall have been called
for redemption, then within two years after the date fixed for redemption of
such Debenture, claim the amount on deposit with the Trustee or other depositary
for the payment of such Debenture, the Trustee or other depositary shall pay
over to the Company the amount so deposited, upon receipt of a request signed by
the President, a Vice President or the Treasurer of the Company, and thereupon
the Trustee or other depositary shall be released from any and all further
liability with respect to the payment of such Debenture, and the Holder of said
Debenture as an unsecured creditor shall be entitled (subject to any applicable
statute of limitations) to look only to the Company for the payment thereof.
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XV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
XV.1. Immunity of Incorporators, Stockholders, Officers and
Directors.
Except for liabilities arising under the Securities Act, no
recourse shall be had for the payment of the principal of (and premium, if any)
or the interest on any Debenture, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any Debenture or because of the creation of any indebtedness represented
hereby shall be had against any incorporator, stockholder, officer, trustee,
director, past, present or future, as such of the Company or of any predecessor
or successor corporation, whether by virtue of any constitution, statute or rule
of law or equity, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Debentures.
118
XVI
RIGHT TO REQUIRE REPURCHASE
XVI.1. Right to Require Repurchase.
(a) In the event of a Change of Control, each Holder shall
have the right to require the Company to repurchase all or a portion of such
Holder's Debentures at a purchase price equal to the principal amount plus
accrued interest to the date of repurchase. Any such tender of Debentures for
repurchase shall be accompanied by the attached Warrants, which may either be
exercised or, upon failure of such exercise, shall expire upon such repurchase.
At the option of the Company, the repurchase price may be paid in cash or by
delivery of Shares having a Market Value equal to the repurchase price. "Market
Value," on a per Share basis, means the amount determined by multiplying (x) the
applicable Stock Price Factor on the date notice of repurchase is given by (y)
the applicable Exchange Rate Factor on such date (provided that in no event
shall the Exchange Rate Factor be less than 1.1175), and by multiplying the
product so achieved by 75%.
A "Change of Control" shall be deemed to have occurred at the
time when persons other than the Existing Control Group shall have become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
more than 50% of the aggregate voting power of the Company, unless such
acquisition shall have been approved by a two-thirds (66 2/3%) majority of the
Continuing Directors of the Company.
(b) In the event the Company does not cause the Debentures to
be listed for trading on the Luxembourg Stock Exchange within ninety (90) days
after the Initial Closing Date, each Holder shall have the right, during the 30
day period following receipt of the notice described in Section 16.2, to require
the Company to repurchase all or a portion of such Holder's Debentures at a
purchase price equal to the principal amount plus accrued interest to the date
of repurchase. Any such tender of Debentures for repurchase shall be accompanied
by the attached Warrants,
119
which may either be exercised or, upon failure of such exercise, shall expire
upon such repurchase. At the option of the Company, the repurchase price may be
paid in cash or by delivery of Shares having a Market Value equal to the
repurchase price. "Market Value," on a per Share basis, means the amount
determined by multiplying (x) the applicable Stock Price Factor on the date
notice of repurchase is given by (y) the applicable Exchange Rate Factor on such
date (provided that in no event shall the Exchange Rate Factor be less than
1.1175), and by multiplying the product so achieved by 75%. In the event that
the Debentures are listed for trading on the Luxembourg Stock Exchange
subsequent to ninety (90) days after the date of authentication, then the
Holders will no longer have the right under this Section 16.1(c) to require the
Company to repurchase any Debentures not theretofore repurchased.
(c) The right to require repurchase at the option of the
Holder is subject to the restriction that the Company may not repurchase any
Debenture at any time when the subordination provisions of this Indenture would
not permit the Company to make a payment of principal, premium or interest on
the Debentures. Except where inconsistent with the provisions of this Article
Sixteen, the redemption provisions of Article Three shall be applicable to
repurchase under this Article Sixteen.
120
XVI.2. Notice; Method of Exercising Repurchase Right.
(a) On or before the 30th calendar day after any Change in
Control, and after the 90th day following the Initial Closing Date if the
Debentures are not then listed on the Luxembourg Stock Exchange, the Company
shall give or cause to be given notice of any event giving rise to the
repurchase right set forth herein arising as a result thereof to each Holder to
the Debentures as such Holder's address appearing in the Debenture Register. The
Company shall also cause a copy of such notice of a repurchase right to be
published once in an Authorized Newspaper. The Company shall notify the Trustee
of the occurrence of any event giving rise to the repurchase right described
herein as promptly as practical after such occurrence.
Each notice of a repurchase right shall state:
(i) the Repurchase Date,
(ii) the Repurchase Price,
(iii) the date by which the repurchase right must be
exercised, and
(iv) a description of the procedure which a Holder must follow
to exercise a repurchase right.
No failure of the Company to give the foregoing notice shall
limit any Holder's right to exercise a repurchase right.
(b) To exercise a repurchase right, a Holder shall deliver to
the Company (or an agent designated by the Company for such purpose in the
notice referred to in (a) above) and the Trustee on or before the thirtieth
calendar day after the date of the Company notice provided under this Section
16.2 (1) written notice of the Holder's exercise of such right, which notice
shall set
121
forth the name of the Holder, the principal amount of the Debentures to be
repurchased and a statement that the option to exercise the repurchase right is
being made thereby; and (2) the Debentures with respect to which the repurchase
right is being exercised, duly endorsed for transfer to the Company. Such
written notice shall be irrevocable. If the Repurchase Date falls between any
regular Record Date and the next succeeding Interest Payment Date, Debentures to
be repurchased must be accompanied by payment from the Holder of an amount in
cash equal to the interest thereon which the registered Holder is to receive on
such Interest Payment Date. Any tender of Debentures for repurchase will be
accompanied by the attached Warrants, which may either be exercised or, upon
failure of such exercise, will expire upon such repurchase.
(c) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid the
price payable with respect to the Debenture or Debentures as to which the
repurchase right has been exercised in cash to the Holder of such Debenture or
Debentures on the Repurchase Date. In the event that a repurchase right is
exercised with respect to less than the entire principal amount of a surrendered
Debenture, the Company shall execute and deliver to the Trustee and the Trustee
shall authenticate for issuance in the name of the Holder a new Debenture or
Debentures, with a Guarantee or Guarantees endorsed thereon, in the aggregate
principal amount of the unrepurchased portion of such surrendered Debenture.
(d) In the event that the Holders exercise their rights to
require the Company to repurchase Debentures pursuant to the provisions of this
Article XVI, the Company shall comply with any applicable tender offer rules
under the Exchange Act, including, to the extent applicable, Rules 13e-4 and
14e-1, as then in effect, with respect to any such purchase.
XVI.3. Deposit of Repurchase Price.
Prior to the Repurchase Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if
122
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 2.7) an amount of money sufficient to pay the Repurchase
Price of the Debentures which are to be repaid on the Repurchase Date.
XVI.4. Debentures Not Repurchased on Repurchase Date.
If any Debenture surrendered for repurchase shall not be so
paid on the Repurchase Date, the principal shall, until paid, bear interest to
the extent permitted by applicable law from the Repurchase Date at a rate per
annum borne by such Debenture.
XVI.5. Debentures Repurchased in Part.
Any Debenture which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that purpose
pursuant to Section 2.6 (with, if the Company or Debenture Registrar so
requires, due endorsement by, or written instrument of transfer in form
satisfactory to the Company and the Debenture Registrar duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Debenture without service charge, a new Debenture or Debentures, with a
Guarantee or Guarantees endorsed thereon, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unrepurchased portion of the principal of the Debenture so surrendered.
XVI.6. Purchase of Warrants.
Any repurchase of Debentures by the Company pursuant to the
provisions of this Article XVI shall be automatically deemed to include the
repurchase by the Company of the related Warrants without additional
consideration, and all such Warrants shall be surrendered by the Holder thereof
for cancellation at the same time, and in the same manner, as the related
Debentures.
123
MISCELLANEOUS PROVISIONS
XVII.1. Successors and Assigns of Company Bound by Indenture.
All the covenants, stipulations, promises and agreements in
this Indenture contained by or in behalf of the Company shall bind its
successors and assigns, whether so expressed or not.
XVII.2.Acts of Board, Committee or Officer of Successor
Corporation Valid.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any corporation that shall at
the time be the lawful successor of the Company.
XVII.3. Surrender of Powers by Company.
The Company by instrument in writing executed by authority of
its Board of Directors and delivered to the Trustee may surrender any of the
powers reserved to the Company and thereupon such power so surrendered shall
terminate both as to the Company and as to any successor corporation.
124
XVII.4. Required Notices or Demands May be Served by Mail.
Except to the extent otherwise provided in this Indenture, any
notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Holders of Debentures
to or on the Company may be given or served by being deposited, postage prepaid,
first class mail, in a post-office letterbox addressed (until another address is
filed in writing by the Company with the Trustee) as follows: Palomar Medical
Technologies, Inc., Attention: President, 00 Xxxxxx Xxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000. Any notice, election, request or demand by the Company or
any Debentureholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made at the principal
office of the Trustee at 0000 00xx Xxxxxx, 0xx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000.
XVII.5.Indenture and Debentures to be Construed in Accordance
with Laws of State of New York.
This Indenture and each Debenture shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the internal laws of said
State. Under the Judiciary Law of the State of New York, a judgment or decree in
an action based upon an obligation denominated in a currency other than U.S.
dollars shall be rendered in the foreign currency of the underlying obligation
and converted into U.S. dollars at a rate of exchange prevailing on the date of
the entry of the judgment or decree.
125
XVII.6.Officers' Certificate and Opinion of Counsel to be
Furnished upon Applications or Demands by Company.
Upon any application or demand by the Company to the Trustee
to take or omit to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action or omission have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with and such action or omission does
not violate the terms of this Indenture or the provisions of any applicable law.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the
Company may be based, insofar as it relates to legal matters, upon a
certificate, an opinion of or representations by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous. Any certificate, statement or Opinion of Counsel may be
based (insofar as it relates to factual matters, information with respect to
which is in the possession of the
126
Company) upon the certificate, statement or opinion of or representations by any
officer or officers of the Company with direct knowledge of such factual
matters, unless such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous.
Any certificate, statement or opinion of an officer of the
Company or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of
accountants, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous.
XVII.7. Payments Due on Non-Business Days.
In any case where the date of maturity of interest on or
principal of the Debentures or the date fixed for redemption of any Debenture,
or the last day on which the Holder of any Debenture has the right to exercise
the right of conversion thereof, shall not be a Business Day, then payment of
interest or principal (or premium, if any) or the exercise of such conversion
right, may be made on the next succeeding Business Day with the same force and
effect as if made on the nominal date, and no interest shall accrue for the
period after such nominal date until such next succeeding Business Day.
XVII.8. Effect of Invalidity of Provisions.
In case any one or more of the provisions contained in this
Indenture or in the Debentures shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Debentures, but this Indenture and such Debentures shall be construed as if
such invalid
127
or illegal or unenforceable provision had never been contained herein or
therein.
XVII.9. Execution of Counterparts.
This Indenture may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
American Stock Transfer & Trust Company, the party of the
second part, hereby accepts the trusts in this Indenture declared and provided,
upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, Palomar Medical Technologies, Inc., the
party of the first part, has caused this Indenture to be signed in its corporate
name and acknowledged by Xxxxxx Xxxxxxxx, its Chief Executive Officer and
Chairman of the Board, and its corporate seal to be affixed hereunto; and
American Stock Transfer & Trust Company, the party of the second part, has
caused this Indenture to be signed and acknowledged by its Chairman/CEO and its
corporate seal to be affixed hereunto, all as of the day and year first above
written.
PALOMAR MEDICAL TECHNOLOGIES,
INC.
By: /s/ Xxxxxx Xxxxxxxx
---------------------
Name: Xxxxxx Xxxxxxxx
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
128
STATE OF )
: ss.:
COUNTY OF )
On this ___ day of _________ 1996, before me, the subscriber,
a Notary Public within and for the County of ______________ in the State of
________, personally appeared to me _____________________________, to me
personally known, who, being by me duly sworn, did say that he resides in
_______________________ and is the ______________ of Palomar Medical
Technologies, Inc., one of the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal of the said corporation
and that the seal affixed to said instrument is the corporate seal of said
corporation; and that said instrument was signed and sealed in behalf of said
corporation by authority of its Board of Directors and that he subscribed his
name thereto by like authority.
(Seal)
________________________________
Notary Public
000
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF KINGS )
On this ____ day of ______, 1996, before me, the subscriber, a
Notary Public within and for the County of New York in the State of New York,
personally appeared ___________________ to me personally known, who, being by me
duly sworn, did say that he resides at_______________________________________
and is the ___________________ of American Stock Transfer & Trust Company, a
company described in and which executed the foregoing instrument; that he knows
the seal of said entity and that the seal affixed to said instrument is the seal
of said entity; and that said instrument was signed and sealed in behalf of said
entity by authority of its Board of Directors and that he subscribed his name
thereto by like authority.
(Seal)
-----------------------------
Notary Public
130
EXHIBIT A
[FORM OF FACE OF REGISTERED DEBENTURE]
THE DEBENTURE(S) REPRESENTED HEREBY ARE EACH PART OF A NONDETACHABLE UNIT, EACH
UNIT CONSISTING OF ONE SF 1,000 PRINCIPAL AMOUNT 4.5% CONVERTIBLE SUBORDINATED
DEBENTURE AND 24 COMMON STOCK PURCHASE WARRANTS. SAID DEBENTURE AND WARRANTS MAY
NOT BE TRANSFERRED OR TRADED SEPARATELY, AND ANY PURPORTED TRANSFER OF EITHER OF
SUCH SECURITIES SEPARATELY FROM THE OTHER SHALL BE VOID AND SHALL NOT BE
RECORDED ON THE BOOKS AND RECORDS OF THE COMPANY. DEBENTURES MAY ONLY BE
CONVERTED IN THEIR ENTIRETY; AND EACH DEBENTURE TO BE CONVERTED MUST BE
ACCOMPANIED BY THE RELATED 24 WARRANTS FOR EXERCISE OR CANCELLATION IN
ACCORDANCE WITH THE TERMS THEREOF.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO
REGULATION S, AN EXEMPTION FROM REGISTRATION PURSUANT TO THE PROVISIONS UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THESE SECURITIES MAY NOT BE TRANSFERRED, OFFERED OR SOLD PRIOR TO THE END OF THE
FORTY (40)-DAY PERIOD (THE "RESTRICTED PERIOD") COMMENCING ON THE LATER OF (I)
THE DATE THE SECURITIES ARE FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS
DEFINED IN REGULATION S) OR (II) THE DATE OF THE FINAL CLOSING OF THE OFFERING
OF THE UNITS BY THE COMPANY, UNLESS SUCH TRANSFER, OFFER OR SALE (I) IS MADE IN
AN "OFFSHORE TRANSACTION" AND NOT TO A "U.S. PERSON" (OTHER THAN A
"DISTRIBUTOR") (AS SUCH TERMS ARE DEFINED IN REGULATION S) OR (II) IS MADE
PURSUANT TO REGISTRATION OR AN APPLICABLE EXEMPTION UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE SOLD EXCEPT PURSUANT TO
THE TERMS AND CONDITIONS OF THE OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
BETWEEN THE COMPANY AND THE INITIAL HOLDER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY.
BY REQUESTING THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
AFTER THE RESTRICTED PERIOD, THE HOLDER OF THIS CERTIFICATE REPRESENTS THAT IF
SUCH TRANSFER IS MADE TO A U.S. PERSON, THAT AT THE TIME OF SUCH TRANSFER THE
HOLDER IS NOT AN "AFFILIATE" OF THE COMPANY (AS SUCH TERM IS DEFINED IN THE
SECURITIES ACT) OR AN "UNDERWRITER" OR "DEALER" (AS SUCH TERMS ARE DEFINED IN
THE ACT), HAS NOT ENGAGED IN ANY SHORT SALES OR SIMILAR HEDGE TRANSACTIONS WITH
RESPECT TO THE COMPANY'S SHARES OF COMMON STOCK DURING THE RESTRICTED PERIOD, IS
NOT A "DISTRIBUTOR" AND SUCH TRANSFER IS NOT BEING MADE AS PART OF A PLAN OR
SCHEME TO EVADE THE REGISTRATION PROVISIONS OF THE SECURITIES ACT.
A-1
PALOMAR MEDICAL TECHNOLOGIES, INC.
----------------------------------
THIS SECURITY CANNOT BE EXCHANGED
FOR A BEARER SECURITY
4.5% SUBORDINATED CONVERTIBLE DEBENTURE DUE 2003
No.____________ SF___________
Unit CUSIP U69636 AA 3
Debenture CUSIP U69636 AB 1
PALOMAR MEDICAL TECHNOLOGIES, INC., a corporation duly
organized and existing under the laws of the State of Delaware (the "Company"),
for value received, hereby promises to pay to
_____________________________________, or registered assigns, the principal sum
of SF ________ , on or prior to June , 2003, at its office in Beverly,
Massachusetts, or at its agency in Luxembourg, in such coin or currency of
Switzerland as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest thereon at the rate per annum
specified in the title of this Debenture, in like coin or currency, at said
office in Beverly, Massachusetts, or agency of the Company in Luxembourg
quarterly in arrears on March 31, June 30, September 30 and December 31 in each
year (each an "Interest Payment Date"), commencing on September 30, 1996, to the
Holders thereof as of the March 15, June 15, September 15 or December 15, as the
case may be, next preceding such Interest Payment Date (each, a "Record Date").
The interest on the Debentures shall be computed on the basis
of a 360-day year of twelve 30-day months and in any case where the date for any
payment on the Debentures is not a Business Day, such payment may be made on the
next succeeding Business Day and have the same force and effect as if made on
such original payment date, and no interest shall accrue for the period from and
after such original payment date. The principal, or premium, if any, and
interest on the Debentures shall be payable in Swiss Francs. At the option of
the Company, payment of interest may be made by check mailed to the address of
the person entitled thereto as such address shall appear in the Register.
The Person in whose name any Debenture is registered at the
close of business on the Record Date with respect to an Interest Payment Date
shall be entitled to receive the interest payable on such interest payment date
notwithstanding the cancellation of such Debenture upon any transfer, exchange
or conversion thereof subsequent to
A-2
such Record Date and prior to such Interest Payment Date; provided that if and
to the extent the Company shall default in the payment of the interest due on
such Interest Payment Date, such defaulted interest shall be paid to the persons
in whose names the Debentures are registered on a subsequent record date
established by notice given by mail by or on behalf of the Company to the
Holders of Debentures not less than 15 days preceding such subsequent record
date, such Record Date to be not less than five days preceding the date of
payment of such defaulted interest. Notwithstanding the foregoing, such
defaulted interest may be paid at any time in any other lawful manner not
inconsistent with the terms of the Debentures or the requirements of any
securities exchange on which the Debentures may be listed, and upon such notice
as may be required by such exchange.
If any Debenture or portion thereof is called for redemption
on a redemption date after the close of business on the Record Date preceding an
Interest Payment Date and notice of such redemption has been mailed and funds
for such redemption have been duly provided, interest accrued to the redemption
date on such Debenture or portion so called shall be paid only against surrender
of the Debenture for redemption in accordance with said notice.
Subject to the terms of the Indenture, the Company shall pay
to any "United States Alien" certain customary additional amounts in the event
of changes in the United States income tax laws affecting withholding taxes on
payments under the Debentures ("Additional Payments"), in order that every new
payment of principal and interest on such Debenture, after deduction or
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the
government of the United States or any state thereof or by any authority or
agency thereof shall not be less that the amount provided for in such Debenture
to be then due and payable, subject to certain customary exceptions. The Company
shall provide customary indemnification for Holders affected by the foregoing.
If the Company is required to make additional payments to
Holders thereof by reason of deductions or withholdings for or on account of any
taxes, assessments or other governmental charges (the "withholding taxes"), the
Company shall deliver to the Trustee for delivery to the Holders at the time of
any such payment a statement specifying the amount of taxes so paid by the
Company as additional interest.
A-3
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
DEBENTURE SET FORTH BELOW, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee by the manual signature of one of its authorized
officers, this Debenture shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Debenture to
be duly executed in its corporate name.
Dated:
PALOMAR MEDICAL TECHNOLOGIES,
INC.
By:________________________________
Attest: Title:
-----------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the
within-mentioned Indenture.
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By:________________________________
Title:
A-4
[FURTHER PROVISIONS]
PALOMAR MEDICAL TECHNOLOGIES, INC.
4.5% SUBORDINATED CONVERTIBLE DEBENTURE DUE 2003
This Debenture is one of a duly authorized issue of Debentures
of the Company designated as its 4.5% Subordinated Convertible Debentures due
2003 (the "Debentures"), limited to the aggregate principal amount of
Twenty-five Million Swiss Francs (SF 25,000,000), all issued or to be issued
under and pursuant to an indenture dated as of June 24, 1996 (the "Indenture"),
duly executed and delivered by the Company and American Stock Transfer & Trust
Company, a corporation duly organized and existing under the laws of New York,
as trustee (the "Trustee"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the Holders of
the Debentures.
The indebtedness evidenced by the Debentures is, to the extent
and in the manner set forth in the Indenture, expressly subordinated and subject
in right of payment to the prior payment in full of all Senior Indebtedness, as
defined in the Indenture, and this Debenture is issued subject to such
provisions, and each Holder of this Debenture, by accepting the same, agrees to
and shall be bound by such provisions, and authorizes the Trustee on his behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate such subordination as provided in the Indenture and appoints the
Trustee his attorney-in-fact for any and all such purposes.
Transfer of Debentures. Upon surrender at such office or
agency of any Debentures for registration of transfer, the Company shall execute
and register and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Debenture or Debentures for the same aggregate
principal amount, and no registration of transfer of any Debentures shall be
valid as against the Company or the Trustee unless made at such office or
agency.
The authorized denominations of Debentures shall be
interchangeable in equal aggregate principal amounts. Debentures to be exchanged
shall be surrendered at the office or agency to be maintained by the Company,
Redemption at Option of Company. The Debentures may be
redeemed by the Company, as a whole or from time to
A-5
time in part, at any time on or after the third anniversary of the Initial
Closing Date and prior to maturity or conversion, at a redemption price equal to
100% of the principal amount to be redeemed plus accrued and unpaid interest to
the date fixed for redemption.
The Debentures may also be redeemed, at any time as a whole
but not in part, at a redemption price equal to 100% of the principal amount
plus accrued and unpaid interest to the date fixed for redemption, if, as a
result of any change in or amendment to the laws, regulations or published tax
rulings of the United States, or any political subdivision or taxing authority
thereof or therein, affecting taxation, or any change in the official
administration, application or interpretation of such laws, regulations or
published tax rulings either generally or in relation to the Debentures, which
change or amendment becomes effective on or after the Initial Closing Date or
which change in official administration, application or interpretation shall not
have been available to the public prior to such date and is notified to the
Company on or after such date, it is determined by the Company that the Company
would be required to pay any Additional Payments pursuant to the Indenture or
the terms of any Debenture in respect of interest on the next succeeding
Interest Payment Date. At the option of the Company, such redemption may be paid
in cash or by delivery of shares of Common Stock in the manner described in the
Indenture.
Discharge of Company's Obligations Upon Deposit of Redemption
Moneys. If proper notice of redemption shall have been given, and if the Company
shall have deposited with the Trustee or with any Paying Agent (other than the
Company), for the benefit of the Holders of any of the Debentures called for
redemption in whole or in part, funds (to be immediately available for payment)
sufficient to redeem the Debentures to be redeemed on the date fixed for
redemption, at the applicable redemption price, together with accrued and unpaid
interest to the date fixed for redemption, then all obligations of the Company
in respect of such Debentures shall cease and be discharged (except the
obligation to issue shares of Common Stock of the Company upon conversion of
Debentures on or prior to the redemption date in accordance with the terms of
this Indenture and the Debentures), and the Holders of such Debentures shall
thereafter be restricted exclusively to such funds for any and all claims of
whatever nature on their part under the Indenture, or in respect of such
Debentures (except with respect to any rights of conversion as above stated).
Sinking Fund. As and for a mandatory sinking fund, the Company
shall pay to the Trustee, not less than
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one Business Day, on or before the anniversary of the Initial Closing Date in
each of the years 2000 to 2003 2 (each a "Sinking Fund Payment Date") an amount
of money equal to 25% of the aggregate amount of Debentures originally issued at
100% of their principal amount together with accrued and unpaid interest thereon
to the applicable Sinking Fund Payment Date, subject to reduction as provided in
the Indenture. The Trustee shall apply cash sinking fund payments to the
redemption of Debentures on the applicable Sinking Fund Payment Date.
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Right of Debentureholders to Convert Debenture Into Common
Stock. The Debentures may be converted by Holders, in whole or in part, from
time to time, commencing ninety days following the Initial Closing Date and on
or before the close of business prior to the seventh anniversary of the Initial
Closing Date, or the date of redemption (or if that day is not a Business Day,
on the preceding Business Day), at any time on at least five days' written
notice to the Company, at the conversion prices described below (except that, in
respect of any Debenture or Debentures, or portion thereof, called for
redemption before such date pursuant to the Indenture, such right shall
terminate at the close of business on the date fixed for such redemption unless
the Company shall default in payment due upon redemption thereof) to convert,
subject to the terms and provisions of the Indenture, the principal amount of
any such Debenture or Debentures, or portion thereof as hereinafter provided,
into (a) such whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock (the "Debenture Conversion Shares") as
determined by dividing (y) the principal amount of Debentures to be converted by
(z) the Holder Conversion Price, (b) an amount of money payable in Swiss Francs
equal to the accrued and unpaid interest thereon to the date of conversion, and
(c) an amount of money equal to the value of the fractional share remainder, if
any, resulting from the calculation described in clause (a) above, to be paid in
Swiss Francs based on the Holder Conversion Price per share.
"Holder Conversion Price" means the product of (w) the
applicable Stock Price Factor, (x) the applicable Exchange Rate Factor, (y) the
applicable Holder Conversion Percentage Factor and (z) the applicable
Antidilution Factor.
"Stock Price Factor" means a factor, to be calculated by the
Company with respect to each December 15, February 15, April 15, June 15, August
15, and October 15 (each a "Reset Date"), and to be applicable in the two full
calendar months following the Reset Date, and equal to the average daily Nasdaq
closing price per Share (or, if the Company is listed or quoted on an exchange
in the United States other than Nasdaq, the closing price on such exchange), for
the thirty trading days immediately preceding the applicable Reset Date;
provided that in no event shall the Stock Price Factor be less than U.S. $12.00
(subject to adjustment), regardless of the actual Stock Price Factor otherwise
determined.
"Exchange Rate Factor" means a factor, to be calculated by the
Company with respect to each Reset Date, and to be applicable in the two full
calendar months
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following the Reset Date, and equal to the average Noon Buying Rate (as defined
below) for the thirty trading days immediately preceding the applicable Reset
Date; provided that in no event shall the Exchange Rate Factor be less than
1.1175. "Noon Buying Rate" means the exchange rate for one U.S. dollar expressed
in Swiss Francs, based upon the noon buying rate in New York City for cable
transfers in Swiss Francs, as certified for customs purposes by the Federal
Reserve Bank of New York.
"Holder Conversion Percentage Factor" means a conversion
percentage, determined on the date notice of conversion is given, which shall be
(i) 100% until the day preceding the third anniversary of the Initial Closing
Date, (ii) 95% from the third anniversary of the Initial Closing Date until the
day preceding the fourth anniversary of the Initial Closing Date; (iii) 90% from
the fourth anniversary of the Initial Closing Date until the day preceding the
fifth anniversary of the Initial Closing Date; (iv) 85% from the fifth
anniversary of the Initial Closing Date until the day preceding the sixth
anniversary of the Initial Closing Date; and (v) 80% from the sixth anniversary
of the Initial Closing Date until the seventh anniversary of the Initial Closing
Date.
If any Debenture is converted in part, the Company, on
surrender of such Debenture for conversion, shall execute such new Debenture or
Debentures and shall deliver to the Trustee (a) the surrendered Debenture for
cancellation, or if such Debenture has been duly cancelled by the Company, such
duly cancelled Debenture, (b) such new Debenture or Debentures for
authentication, and (c) unless the Trustee is a conversion agent, a statement
signed by any officer of the Company, or by any agent maintained by the Company
for conversion of Debentures, stating the principal amount of the surrendered
Debenture which has been converted and requesting the authentication of such new
Debenture or Debentures; and thereupon the Trustee shall authenticate and the
Company shall deliver or cause to be delivered such new Debenture or Debentures
to such Debentureholder.
Right of Company to Convert Debenture into Common Stock of
Company. The Debentures may be converted by the Company, in whole or from time
to time in part, into (a) that whole number of Debenture Conversion Shares
determined by dividing (y) the sum of the principal amount of Debentures to be
converted, by (z) the Company Conversion Price, (b) an amount of money payable
in Swiss Francs equal to the accrued and unpaid interest thereon to the date of
conversion, and (c) an amount of money equal to the value of the fractional
share remainder, if any, resulting from the calculation described in clause (a)
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above, to be paid in Swiss Francs based on the Company Conversion Price per
share.
"Company Conversion Price" means the product of (w) the
applicable Stock Price Factor, (x) the applicable Exchange Rate Factor, (y) the
applicable Company Conversion Percentage Factor and (z) the applicable
Antidilution Factor.
"Company Conversion Percentage Factor" means a conversion
percentage, determined on the date notice of conversion is given, which shall be
(i) 100% until the day preceding the third anniversary of the Initial Closing
Date, (ii) 92.5% from the third anniversary of the Initial Closing Date until
the day preceding the fourth anniversary of the Initial Closing Date; (iii)
87.5% from the fourth anniversary of the Initial Closing Date until the day
preceding the fifth anniversary of the Initial Closing Date; (iv) 82.5% from the
fifth anniversary of the Initial Closing Date until the day preceding the sixth
anniversary of the Initial Closing Date; and (v) 77.5% from the sixth
anniversary of the Initial Closing Date until the seventh anniversary of the
Initial Closing Date.
Exercise of Conversion Privilege. Debentures may be converted
only in units of SF 1,000 and integral multiples thereof. A holder of Debentures
desiring to convert Debentures will not be required to exercise the attached
Warrants. However, if the Warrants are unexercised, they will expire upon such
conversion by the holder of Debentures or upon conversion or redemption at the
option of the Company. In addition, during the period beginning 90 days after
the Initial Closing Date and ending 119 days following the Initial Closing Date,
any conversion of Debentures will necessarily result in the expiration of the
Warrants attached thereto.
A Holder may exercise the conversion privilege by completing
the Conversion Notice below and surrendering to the Company, at the office or
agency to be maintained by the Company for that purpose, the Debenture or
Debentures so to be converted. The Conversion Notice shall also state the name
or names (together with address and tax identification number to the extent
required), if different from the name of the registered Holder, in which the
certificate or certificates for such shares of Common Stock shall be issued.
Debentures surrendered for conversion shall (if so required by the Company or
the Trustee) be duly endorsed by, or accompanied by instruments of transfer in
form satisfactory to the Company duly executed by, the registered Holder or his
duly authorized attorney, and be accompanied by a signature guaranty by a
commercial bank or trust company or other institution which may be
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required under applicable laws or regulations, and any Debentures so surrendered
during the period from the close of business on any Record Date for the payment
of interest on the Debentures to the opening of business on the interest payment
date shall (except in the case of Debentures or portions thereof which have been
called for redemption on a redemption date within such period) be accompanied by
payment in funds acceptable to the Company of an amount equal to the interest
payable on such interest payment date; provided that no such payment need be
made if there shall exist at the time of conversion a default in the payment of
interest on the Debentures. An amount equal to the quarterly interest payment
due in respect of any Debenture converted shall be paid by the Company on the
interest payment date to the Debentureholder of such converted Debenture on such
Record Date, provided that if the Company defaults in payment of interest on
such interest payment date, the amount previously paid by the Debentureholder to
the Company in respect of interest upon conversion of Debentures shall be repaid
to the Debentureholder. Except as expressly set forth in this paragraph, no
payment or adjustment shall be made on conversion of any Debenture for interest
accrued thereon or for dividends on securities issued upon such conversion.
Adjustment of Antidilution Factor. The Antidilution Factor
referred to above in the calculation of the Conversion Prices shall be subject
to adjustment from time to time as follows:
(a) In the event that the Company shall at any time after the
date hereof subdivide or combine the outstanding shares of Common Stock or issue
additional shares of Common Stock as a dividend or other distribution on the
Common Stock, the Antidilution Factor in effect immediately prior to such
subdivision or combination of shares or share dividend or distribution shall be
proportionately adjusted so that, with respect to each such subdivision of
shares or share dividend or distribution, the number of shares of the Common
Stock deliverable upon conversion of each SF 1,000 principal amount of the
Debentures shall be increased in proportion to the increase in the number of
shares of the then outstanding Common Stock resulting from such subdivision of
shares or share dividend or distribution.
(b) Notwithstanding anything in Sections 4.1 and 4.2 to the
contrary, in the case of any capital reorganization or any reclassification of
the Common Stock, or in the case of the consolidation or merger of the Company
with or into any other corporation or in case of any sale or transfer of all or
substantially all of the assets of the Company as may be permitted by the
provisions hereof,
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the Company and each Holder of the Debentures then outstanding shall have the
right thereafter to convert the principal amount of each such Debenture into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification, consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock of the Company into
which such Debenture might have been converted immediately prior to such
reorganization, reclassification, consolidation, merger, sale or transfer; and,
in any such case, appropriate adjustment (as determined in good faith by the
Board of Directors of the Company) shall be made in order that the rights and
interests of the holders thereafter shall be as nearly equivalent as may be
practicable to the rights and interests provided for in the Indenture.
(c) Whenever the Company shall fix a record date for the
holders of the Common Stock for the purpose of determining the holders entitled
to subscribe for or purchase shares of Common Stock at a price per share less
than the Closing Price of the Common Stock as of such record date, the
Antidilution Factor shall be adjusted so that the number of shares of the Common
Stock into which each SF 1,000 principal amount of the Debentures shall
thereafter be convertible shall be determined by multiplying the number of
shares of the Common Stock into which such SF 1,000 principal amount of the
Debentures was theretofore convertible by a fraction of which the numerator
shall be the number of shares of the Common Stock outstanding immediately prior
to the taking of such record plus the number of additional shares of Common
Stock offered for subscription or purchase and of which the denominator shall be
the number of shares of the Common Stock outstanding immediately prior to the
taking of such record plus the number of shares of the Common Stock which the
aggregate offering price (without deduction of any expenses, including
commissions or discounts) of the total number of shares of the Common Stock so
offered would purchase at the Closing Price of the Common Stock as of such
record date.
(d) Whenever the Company shall fix a record date for the
holders of the Common Stock for the purpose of determining the holders entitled
to receive any distribution of evidences of its indebtedness, capital stock or
assets (other than a regularly scheduled cash dividend and dividends payable in
stock for which adjustment is made pursuant to the Indenture), or rights to
subscribe for or purchase any evidences of the Company's indebtedness or assets
(other than rights referred to in the preceding paragraph), the Antidilution
Factor shall be appropriately adjusted.
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Events of Default. In case an Event of Default, as defined in
the Indenture, shall have occurred and be continuing, the principal of all of
the Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture, by either the Trustee or the holders of at least a majority in
aggregate principal amount of the Debentures then outstanding.
Registered Holder as Absolute Owner. The Company, the Trustee,
any paying agent, any conversion agent and any Debenture Registrar may deem and
treat the person in whose name any Debenture shall be registered upon the books
of the Company as the absolute owner of such Debenture (whether or not such
Debenture shall be overdue and notwithstanding any notice of ownership or
writing thereon made by anyone other than the Company or any Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal of (and premium, if any) and interest on (subject to the provisions of
the Indenture) such Debenture and for all other purposes; and neither the
Company nor the Trustee nor any paying agent nor any conversion agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
Modification of Indenture with Consent of Holders of 66-2/3%
in Principal Amount of Debentures. With the consent of the Holders (or persons
entitled to vote, or to give consents respecting the same) of not less than 66
2/3% in aggregate principal amount of the Debentures at the time outstanding,
the Company, when authorized by a resolution of its Board of Directors, and the
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or of modifying in any manner the rights and
obligations of the Holders of the Debentures and of the Company; provided that,
without the consent of the Holders of all Debentures then outstanding, no such
supplemental indenture shall (i) extend the fixed maturity of any Debenture, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, or (ii) alter the provisions of Article IV hereof respecting conversion
of the Debentures so as to affect the Debentures adversely, or (iii) modify any
of the provisions of this Indenture with respect to the subordination of the
Debentures in a manner adverse to the Holders thereof, or (iv) reduce the
aforesaid percentage of Debentures, the Holders of which are required to consent
to any such supplemental indenture.
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Immunity of Incorporators, Stockholders, Officers and
Directors. Except for liabilities arising under the Securities Act, no recourse
shall be had for the payment of the principal of (and premium, if any) or the
interest on any Debenture, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or in any supplemental indenture, or
in any Debenture or because of the creation of any indebtedness represented
hereby shall be had against any incorporator, stockholder, officer, trustee,
director, past, present or future, as such of the Company or of any predecessor
or successor corporation, whether by virtue of any constitution, statute or rule
of law or equity, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of the Indenture and the issue of the Debentures.
Right to Require Repurchase. In the event of a Change of
Control, each Holder shall have the right to require the Company to repurchase
all or a portion of such Holder's Debentures at a purchase price equal to the
principal amount plus accrued interest to the date of repurchase. Any such
tender of Debentures for repurchase shall be accompanied by the attached
Warrants, which may either be exercised or, upon failure of such exercise, shall
expire upon such repurchase. At the option of the Company, the repurchase price
may be paid in cash or by delivery of Shares having a Market Value equal to the
repurchase price. "Market Value," on a per Share basis, means the amount
determined by multiplying (x) the applicable Stock Price Factor on the date
notice of repurchase is given by (y) the applicable Exchange Rate Factor on such
date (provided that in no event shall the Exchange Rate Factor be less than
1.1175), and by multiplying the product so achieved by 75%.
A "Change of Control" shall be deemed to have occurred at the
time when persons other than the Existing Control Group shall have become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
more than 50% of the aggregate voting power of the Company, unless such
acquisition shall have been approved by a two-thirds (66 2/3%) majority of the
Continuing Directors of the Company.
In the event the Company does not cause the Debentures to be
listed for trading on the Luxembourg Stock Exchange within ninety (90) days
after the Initial Closing Date, each Holder shall have the right, during the 30
day period following receipt of the notice described in
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Section 16.2, to require the Company to repurchase all or a portion of such
Holder's Debentures at a purchase price equal to the principal amount plus
accrued interest to the date of repurchase in a manner similar to that set forth
in the second preceding paragraph.
The right to require repurchase at the option of the Holder is
subject to the restriction that the Company may not repurchase any Debenture at
any time when the subordination provisions of the Indenture would not permit the
Company to make a payment of principal, premium or interest on the Debentures.
Indenture and Debentures to be Construed in Accordance with
Laws of State of New York. The Indenture and each Debenture shall be deemed to
be a contract made under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the internal laws of said
State. Under the Judiciary Law of the State of New York, a judgment or decree in
an action based upon an obligation denominated in a currency other than U.S.
dollars shall be rendered in the foreign currency of the underlying obligation
and converted into U.S. dollars at a rate of exchange prevailing on the date of
the entry of the judgment or decree.
No reference herein to the Indenture and no provisions of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Debenture at the time and place and at the
rate and in the manner herein prescribed.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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CONVERSION NOTICE
The undersigned holder of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or portion hereof (which is SF )
below designated, into Common Shares in accordance with the terms of the
Indenture referred to in this Debenture, delivers herewith the amount of
interest payable on the next Interest Payment Date if this conversion is made
between the Record Date for such Interest Payment Date and such Interest Payment
Date, and directs that such shares, together with a check in payment for any
fractional share and any Debentures representing any unconverted principal
amount hereof, be delivered to and be registered in the name of the undersigned
unless a different name has been indicated below. If the Common Shares are to be
registered in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto.
Dated:
______________________________
(Signature must be guaranteed
by a bank or stockbroker who is
a member of a national stock
exchange)
If shares or Debentures If only a portion of the
are to be registered in Debentures is to be converted,
the name of a Person please indicate:
other than the
Debentureholder, please 1. Principal Amount to
print such Person's be converted:
name and address, and SF
taxpayer identification
number, if applicable: 2. Amount and denomination
of Registered Debentures
representing unconverted
principal amount to be
_______________________ issued:
_______________________ Amount: SF
_______________________ Denominations: SF
(SF 1,000)
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CERTIFICATE
This is to certify that as of the date hereof with respect to
SF ________ principal amount of the above-captioned debentures presented or
surrendered on the date hereof (the "Surrendered Debentures") for registration
of transfer, or for exchange or conversion where the securities issuable upon
such exchange or conversion are to be registered in a name other than that of
the undersigned Holder (each such transaction being a "transfer"), the
undersigned Holder (as defined in the Indenture) certifies that the transfer of
Surrendered Debentures complies with the restrictive legend set forth on the
face of the Surrendered Debentures for the reason checked below:
_______ The transfer of the Surrendered Debentures complies
with Rule 144 under the U.S. Securities Act of 1933,
as amended (the "Securities Act"); or
_______ The transfer of the Surrendered Debentures complies
with Rule 144A under the Securities Act; or
_______ The transfer of the Surrendered Debentures complies
with Rule 903 or 904 of Regulation S under the
Securities Act.
[Name of Holder]
Dated: __________, ___*
* To be dated the date
of presentation or
surrender
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