IMMUNEX CORPORATION
$450,000,000
3% CONVERTIBLE SUBORDINATED NOTE DUE 2006
NOTE PURCHASE AGREEMENT
DATED AS OF MAY 20, 1999
IMMUNEX CORPORATION
00 XXXXXXXXXX XXXXXX
XXXXXXX, XXXXXXXXXX 00000
As of May 20, 1999
American Home Products Corporation
Five Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
The undersigned, Immunex Corporation (together with any Person who
succeeds to all or substantially all of Immunex Corporation's assets and
business, herein called the "Company"), a Washington corporation, hereby
agrees with American Home Products Corporation (the "Purchaser") as follows:
1. AUTHORIZATION OF ISSUE OF NOTE
The Company will authorize the issue and sale of a $450,000,000
principal amount 3% Convertible Subordinated Note due 2006 (the "Note," such
term to include the Note or Notes delivered pursuant to this Agreement and
any such Notes issued in substitution therefor).
The Note shall be substantially in the form of EXHIBIT A, with such
changes therefrom, if any, as may be approved by the Purchaser and the
Company. Certain capitalized terms used in this Agreement are defined in
EXHIBIT B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement and
references to "this Agreement" shall mean this Agreement as it may from time
to time be amended or supplemented.
2. THE CLOSING
The sale and purchase of the Note shall occur at the offices of
Xxxxxxx Coie LLP, 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 at 12 noon
Seattle time, at the closing (the "Closing") on May 20, 1999 or on such other
Business Day thereafter on or prior to May 30, 1999 as may be agreed upon by
the Purchaser and the Company. At the Closing, the Company will deliver to
the Purchaser the Note dated the date of the Closing and registered to
American Home Products Corporation, against delivery to the Company on its
order of immediately available funds in the amount of the purchase price by
wire transfer of immediately available funds for the account of the Company
to account number 153500075822 at U.S. Bank of Washington, N.A.,
ABA#000000000.
3. CONDITIONS TO CLOSING
The Purchaser's obligation to purchase and pay for the Note at the
Closing is subject to the fulfillment to the Purchaser's satisfaction, prior
to or at the Closing, of the following conditions:
3.1 REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
3.2 PERFORMANCE; NO DEFAULT
The Company shall have performed and complied with all covenants
contained in this Agreement required to be performed or complied with by it
prior to or at the Closing, and after giving effect to the issue and sale of
the Note, no Default or Event of Default shall have occurred or be continuing.
3.3 OPINION OF COUNSEL
The Purchaser shall have received an opinion from Xxxxxxx Coie LLP,
counsel to the Company, substantially in the form of EXHIBIT C.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants:
4.1 ORGANIZATION
(a) The Company is a corporation organized and existing under the
laws of the state of Washington and is qualified or licensed to do business
(and is in good standing as a foreign corporation, as applicable) in all
jurisdictions in which the failure to so qualify or to be so licensed could
reasonably be expected to have a Material Adverse Effect. The Company has the
requisite corporate power and authority to own and operate its properties, to
conduct its business as currently conducted, to enter into this Agreement, to
issue and sell the Note and to carry out the terms of this Agreement and the
Note.
(b) The Company has no Subsidiaries other than Immunex Manufacturing
Corp., a corporation organized and existing under the laws of the state of
Washington ("IMC"). IMC is qualified or licensed to do business (and is in
good standing as a foreign corporation, as applicable) in all jurisdictions
in which the failure to so qualify or to be so licensed could reasonably be
expected to have a Material Adverse Effect. IMC has the requisite corporate
power and authority to own and operate its properties and to conduct its
business as currently conducted.
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4.2 CAPITALIZATION
(a) As of April 30, 1999, the authorized capital stock of the
Company consisted of (i) 200,000,000 shares of common stock, par value $0.01
per share ("Common Stock"), of which (A) 81,365,178 shares were issued and
outstanding, (B) 11,182,906 shares were reserved for issuance upon exercise
of stock options under the Immunex Corporation Amended and Restated 1993
Stock Option Plan and (C) 180,000 shares were reserved for issuance upon
exercise of options under the Immunex Corporation Stock Option Plan for
Nonemployee Directors, and (ii) 5,000,000 shares of preferred stock, par
value $0.01 per share ("Preferred Stock"), which have not yet been issued or
designated as to a series by the Board of Directors. As of the date hereof,
of the 200,000,000 shares of authorized Common Stock, (i) 6,000,000
additional shares are reserved for issuance upon exercise of options under
the Immunex Corporation 1999 Stock Option Plan and (ii) 500,000 additional
shares are reserved for issuance upon purchase under the Immunex Corporation
Employee Stock Purchase Plan.
(b) The equity securities of IMC that are issued and outstanding are
duly authorized and validly issued, fully paid and nonassessable, and issued
in compliance with all applicable federal, state and foreign securities laws.
The Company is the record and beneficial owner of all of the outstanding
shares of capital stock of IMC.
(c) All shares of Common Stock and Preferred Stock that are issued
and outstanding are duly authorized and validly issued, fully paid and
nonassessable, and issued in compliance with all applicable federal, state
and foreign securities laws.
(d) Other than as provided for herein, there are no outstanding
rights of first refusal, preemptive rights, options, warrants, conversion
rights or other agreements, either directly or indirectly, for the purchase
or acquisition from the Company or IMC of any shares of capital stock of the
Company or IMC, as the case may be.
(e) The shares of Common Stock issuable on the conversion of the
Note, as provided herein, have been duly and validly reserved for issuance
and, upon issuance in accordance with the terms of this Agreement and the
Note, will be validly issued, fully paid and nonassessable, and issued in
compliance with all applicable federal, state and foreign securities laws.
4.3 AUTHORIZATION
This Agreement and the Note have been duly authorized by all
requisite corporate action on the part of the Company, and this Agreement and
the Note constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as
such enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditor's laws generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).
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4.4 NO CONFLICTS
The execution, delivery and performance of this Agreement and the
Note by the Company, and the consummation of the transactions contemplated
hereby and thereby, will not violate any existing provision of law or statute
or order of any court or other agency of government, or conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute (with due notice or lapse of time or both) a default under, or
result in the creation of any material lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company or IMC under
(a) the articles of incorporation or bylaws of the Company or IMC or (b) any
indenture or mortgage, or material lease, agreement or other instrument to
which the Company or IMC is a party or by which they or any of their
respective properties property is bound or affected.
4.5 NO DEFAULTS
The Company is not in default (a) under its Restated Articles of
Incorporation or its Bylaws; (b) under any material contract, agreement or
instrument to which the Company is a party or by which it or any of its
property is bound or affected, including without limitation any material
indenture, mortgage, lease, license or purchase or sales order; or (c) with
respect to any statute, order, rule or regulation, writ, injunction or decree
of any court or of any federal, state, municipal or other domestic or foreign
governmental department, commission, board, bureau, agency or
instrumentality. To the knowledge of the Company, there presently exists no
material default by any party other than the Company to any of the foregoing,
and no condition, event or act which constitutes, or which after notice,
lapse of time or both would constitute, a material default by the Company or
any other party under any of the foregoing.
4.6 SEC FILINGS
The Company has filed with the Securities and Exchange Commission
(the "SEC") all forms, reports and documents required to be filed with the
SEC by the Company pursuant to the Exchange Act since December 31, 1997
(collectively, the "Company SEC Reports"). The Company SEC Reports (a) comply
in all material respects with the applicable requirements of the Exchange
Act, and (b) do not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The annual financial statements and schedules
included in the Company SEC Reports have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods specified and present fairly the financial position
for the dates specified, and the results of their operations and cash flows
of the Company for the respective periods specified. The quarterly financial
statements and schedules included in the Company SEC Reports present fairly
the financial position for the dates specified and the results of operations
for the quarterly periods presented and are presented on a basis consistent
with the audited financial statements.
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4.7 ABSENCE OF CHANGES
Except as contemplated by this Agreement or disclosed in the Company
SEC Reports, subsequent to December 31, 1998, (a) the Company has not
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions not in the ordinary course of
business, and (b) there has not been any change in the condition (financial
or otherwise), business, properties or results of operations of the Company
which could reasonably be expected to have a Material Adverse Effect.
4.8 TAX RETURNS AND PAYMENTS
The Company has filed all federal, state and foreign income and
franchise tax returns required by law to be filed by it (or obtained
extensions with respect thereto) and has paid all material taxes, assessments
and other material governmental charges which are due and payable by it,
other than those which are not past due or delinquent or the nonpayment of
which is permitted by Section 6.5.
4.9 GOVERNMENTAL CONSENT
No consent, approval or authorization of, or declaration or filing
with, any governmental authority is required for the valid execution,
delivery and performance by the Company of this Agreement or the valid offer,
issue, sale and delivery of the Note pursuant to this Agreement or the
conversion of the Note into shares of Common Stock.
4.10 CLAIMS AND LEGAL PROCEEDINGS
There are no claims, actions, suits, arbitrations, criminal or civil
investigations or proceedings pending or involving or, to the knowledge of
the Company, threatened against the Company or IMC before or by any court or
governmental or nongovernmental department, commission, board, bureau, agency
or instrumentality, or any other Person. To the knowledge of the Company,
there is no valid basis for any claim, action, suit, arbitration,
investigation or proceeding involving the Company or IMC that could
reasonably be expected to have a Material Adverse Effect. There are no
outstanding or unsatisfied judgments, orders, decrees or stipulations to
which the Company or IMC is a party that involve the transactions
contemplated herein or that could reasonably be expected to have a Material
Adverse Effect.
4.11 TITLE TO PROPERTY AND ASSETS
The Company and IMC have good and marketable title to their
respective properties and assets and own such property and assets free and
clear of all mortgages, liens, loans and encumbrances, except such
encumbrances and liens which arise in the ordinary course of business and do
not materially impair the Company's or IMC's ownership or use of such
property or assets. With respect to the property and assets they lease, each
of the Company and IMC is in compliance with such leases and, to the
Company's knowledge, holds a valid leasehold interest free of any liens,
claims or encumbrances. No event has occurred and is
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continuing which, with due notice or lapse of time or both, would constitute
a default or event of default by the Company or IMC, as the case may be,
under any such lease or agreement or, to the Company's knowledge, by any
other Person. The Company's and IMC's respective possession of such property
has not been disturbed and, to the Company's knowledge, no claim has been
asserted against the Company or IMC adverse to their respective rights in
such leasehold interests.
4.12 LICENSES, PERMITS, AUTHORIZATIONS, ETC.
The Company and IMC have received all required governmental
approvals, authorizations, consents, licenses, orders, registrations and
permits of all agencies, whether federal, state, local or foreign (the
"Permits"), the failure to obtain of which would have a Material Adverse
Effect. The Company and IMC are in compliance with the terms of all Permits,
and all Permits are valid and in full force and effect, and no proceeding is
pending or, to the knowledge of the Company, threatened, the object of which
is to revoke, limit or otherwise affect any Permit. Neither the Company nor
IMC has received any notifications of any asserted failure to obtain any
Permit.
4.13 ENVIRONMENTAL LAWS
To the Company's knowledge, neither the Company nor IMC is in
violation of any applicable statute, law or regulation relating to the
environment, and to the Company's knowledge, no material expenditures are or
will be required in order to comply with any such existing statute, law or
regulation.
4.14 INTELLECTUAL PROPERTY
(a) To the Company's knowledge, the Company and IMC have sufficient
title to and ownership of or rights to use all patents, patent applications,
trade names, trademarks, trademark applications, trade dress, service marks,
copyright, trade secrets, information, proprietary rights and processes
("Intellectual Property") necessary for their respective businesses as now
conducted, or as proposed to be conducted, without any conflict with or
infringement of the rights of others.
(b) The Company is not aware, after due inquiry, that any of its or
IMC's employees are obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of such employee's best efforts to promote the
interests of the Company or IMC or that would conflict with the Company's or
IMC's business as proposed to be conducted. Neither the execution nor
delivery of this Agreement or the Note, nor the carrying on of the Company's
or IMC's business by the employees of and consultants to the Company or IMC,
as the case may be, nor the conduct of the Company's or IMC's business as
proposed, will, to the Company's knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default
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under, any contract, covenant or instrument under which any of such employees
or consultants is now obligated.
(c) Since their respective organization, each of the Company and IMC
has taken reasonable measures to protect the value (and, to the extent
applicable, the confidentiality and security) of all Intellectual Property
used in their respective products, services and business. Each of the
Company's and IMC's employees who, either alone or in concert with others,
developed, invented, discovered, derived, programmed or designed Intellectual
Property or Inventions (as defined below), or who has knowledge of or access
to information about Intellectual Property or Inventions, has entered into
confidentiality, inventions and noncompetition agreements with the Company or
IMC, as the case may be. "Inventions" means all inventions, developments and
discoveries which during the period of an employee's service to the Company
or IMC, as the case may be, he or she makes or conceives of, either solely or
jointly with others, that relate to any subject matter with which his or her
work for the Company or IMC may be concerned, or relate to or are connected
with the business, products, services or projects of the Company or IMC, or
relate to the actual or demonstrably anticipated research or development of
the Company or IMC or involve the use of the Company's or IMC's funds, time,
material, facilities or trade secret information, except as excluded pursuant
to applicable law. No exceptions have been taken by any such employee to the
terms of his or her confidentiality, inventions and noncompetition agreement
with the Company or IMC. The Company, after reasonable investigation, is not
aware that any of its or IMC's employees is in violation thereof, and the
Company will use commercially reasonable efforts to prevent, and to cause IMC
to prevent, any such violation.
(d) Except as set forth in the Company SEC Reports, (i) no claim has
been made (whether written, oral or otherwise) challenging the Company's or
IMC's ownership or rights in any Intellectual Property or claiming that any
other Person has any legal or beneficial ownership with respect thereto; (ii)
no claim has been made (whether written, oral or otherwise) challenging the
validity or enforceability of any material item of the Intellectual Property;
and (iii) to the Company's knowledge, no other Person is infringing or
misappropriating any part of the Intellectual Property or otherwise making
any unauthorized use of the Intellectual Property, except, in each such case,
where such action could not reasonably be expected to result in a Material
Adverse Effect.
4.15 EMPLOYEE ARRANGEMENTS AND PLANS
The Company is in full compliance with the Employee Retirement
Income Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder, except for any failure to comply which will not
result in a Material Adverse Effect.
5. REPRESENTATIONS OF THE PURCHASER
The Purchaser represents, and in issuing the Note to the Purchaser
it is expressly understood and agreed between the Company and the Purchaser,
that the Purchaser is not acquiring the Note hereunder with a view to or for
sale in connection with any distribution
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thereof within the meaning of the Securities Act. The Purchaser understands
that the Note has not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or
if an exemption from registration is available, except under circumstances
where neither such registration nor such an exemption is required by law, and
that the Company is not required to register the Note.
6. PARTICULAR COVENANTS OF THE COMPANY
6.1 PAYMENT OF PRINCIPAL AND INTEREST
The Company covenants and agrees that it will duly and punctually
pay or cause to be paid the principal of and premium, if any, and interest on
the Note at the places, at the respective times and in the manner provided
herein and in the Note.
6.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain an office or agency where the Note may be
surrendered for registration of transfer or exchange or for presentation for
payment or for conversion or redemption and where notices and demands to or
upon the Company in respect of the Note and this Agreement may be served. The
Company will give prompt notice of any change in the location of such office
or agency.
The Company may also from time to time designate a trustee,
co-registrars and one or more offices or agencies where the Note may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations. The Company will give prompt written notice
of any such designation or rescission and of any change in the location of
any such other office or agency.
The Company hereby initially designates itself as paying agent, Note
registrar, Custodian and conversion agent and its principal executive offices
at 00 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx as the office or agency of the
Company for each of the aforesaid purposes.
6.3 EXISTENCE
The Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and rights (charter
and statutory); PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right if the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not disadvantageous in any material respect to
the Purchaser.
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6.4 MAINTENANCE OF PROPERTIES
The Company will cause all properties used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and kept
in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section 6.4 shall prevent the Company
from discontinuing the operation or maintenance of any of such properties if
such discontinuance is, in the judgment of the Company, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Purchaser.
6.5 PAYMENT OF TAXES AND OTHER CLAIMS
The Company will pay or discharge, or cause to be paid or
discharged, before the same may become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any
Significant Subsidiary or upon the income, profits or property of the Company
or any Significant Subsidiary, (b) all claims for labor, materials and
supplies which, if unpaid, might by law become a lien or charge upon the
property of the Company and (c) all stamps and other duties, if any, which
may be imposed by the United States or any political subdivision thereof or
therein in connection with the issuance, transfer, exchange or conversion of
the Note or with respect to this Agreement; PROVIDED, HOWEVER, that, in the
case of clauses (a) and (b), the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge
or claim (x) if the failure to do so will not, in the aggregate, have a
Material Adverse Effect on the Company or (y) if the amount, applicability or
validity is being contested in good faith by appropriate proceedings with
appropriate reserves reflected on the Company's financial statements.
6.6 RULE 144A INFORMATION REQUIREMENT
The Company covenants and agrees that it shall, during any period in
which it is not subject to Section 13 or 15(d) under the Exchange Act, make
available to the Purchaser, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the Purchaser's request and it will
take such further action as the Purchaser may reasonably request, all to the
extent required from time to time to enable the Purchaser to sell the Note or
Common Stock into which the Note is convertible without registration under
the Securities Act within the limitation of the exemption provided by Rule
144A, as such Rule may be amended from time to time. Upon the Purchaser's
request, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements.
6.7 STAY, EXTENSION AND USURY LAWS
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or
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advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Note as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Agreement, and the Company
(to the extent it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law.
6.8 INDENTURE
If reasonably requested by the Purchaser, the Company shall prepare
and execute within sixty (60) days of such request an indenture consistent
with indentures executed in transactions similar to issuance and sale of the
Note and reasonably satisfactory to the Purchaser.
6.9 USE OF PROCEEDS
The proceeds of the sale of the Note shall be used to fund the
acquisition of additional assets of the Company as may be approved from time
to time by the Company's Board of Directors pursuant to the terms of the
Amended and Restated Governance Agreement dated as of December 15, 1992 among
the Company, American Cyanamid Company and Lederle Oncology Corporation.
Pending such use, the proceeds from the sale of the Note shall be invested by
the Company in income securities of a duration and quality consistent with
the Company's investment guidelines in effect as of the date hereof (or as
may be changed with the consent of Purchaser).
7. IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICER AND DIRECTORS
No recourse for the payment of the principal of or premium, if any,
or interest on the Note, 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 Agreement or in the Note, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, shareholder, employee, agent, officer, director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law,
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
Agreement and the issue of the Note.
8. CONVERSION OF NOTE
8.1 RIGHT TO CONVERT.
Subject to and upon compliance with the provisions of this
Agreement, the Purchaser shall have the right, at its sole option, at any
time and from time to time after the Closing
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through the close of business on the final maturity date of the Note to
convert the principal amount of the Note or any portion thereof, in an amount
of at least Fifty Million Dollars ($50,000,000), and in increments of One
Million Dollar ($1,000,000) in excess thereof, into that number of fully paid
and non-assessable shares of Common Stock (as such shares shall then be
constituted after giving effect to any appropriate adjustments) obtained by
dividing the principal amount of the Note, or portion thereof surrendered for
conversion, by the Conversion Price in effect at such time, by surrender of
the Note to be converted in whole or in part in the manner provided in
Section 8.2. Except as otherwise provided herein or in the Governance
Agreement or the Product Rights Agreement, the Purchaser is not entitled to
any rights of a holder of Common Stock until it has converted the Note to
Common Stock, and only to the extent the Note is deemed to have been
converted to Common Stock under this Section 8.
8.2 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK
ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS
In order to exercise the conversion privilege, the Purchaser shall
surrender the Note, duly endorsed, at an office or agency maintained by the
Company pursuant to Section 6.2, and shall give written notice of conversion
in the form provided on the Note (or such other notice that is acceptable to
the Company) that the Purchaser elects to convert the Note or the portion
thereof specified in such notice. Such notice shall also state the name or
names (with addresses) in which the certificates for shares of Common Stock
that shall be issuable upon such conversion shall be issued, and shall be
accompanied by transfer taxes if required pursuant to Section 8.7. Unless the
shares issuable upon conversion of the Note are to be issued in the name of
the Purchaser, the Note shall be duly endorsed in each case by the Purchaser
or be accompanied by instruments of transfer duly executed by the Purchaser
in form satisfactory to the Company.
As promptly as practicable after satisfaction of the requirements
for conversion set forth above, subject to compliance with any restrictions
on transfer, the Company shall issue and shall deliver to the Purchaser or
the then holder of the Note (or portion thereof) at the office or agency
maintained by the Company for such purpose pursuant to Section 6.2, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of the Note or portion thereof in accordance
with the provisions of this Section 8 and a check or cash in respect of (a)
any fractional interest in respect of a share of Common Stock arising upon
such conversion and (b) accrued and unpaid interest, if any, to, but
excluding, the date of such conversion, all as provided in Section 8.3. In
case the Note is surrendered for partial conversion, the Company shall
execute and deliver to the Purchaser, without charge to it, a new Note or
Notes in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to the Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 8.2 have been satisfied as to the Note (or portion thereof), and
the Person in whose name any certificate or
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certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become on such date the holder of record
of the shares represented thereby; PROVIDED, HOWEVER, that in the event of
any such surrender on any date when the stock transfer books of the Company
shall be closed, the Person in whose name the certificates are to be issued
shall constitute the record holder thereof for all purposes on the next
succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
the Note shall be surrendered.
8.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES; PAYMENT OF
ACCRUED INTEREST
No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon conversion of the Note. If a Note
shall be surrendered for conversion, the number of full shares that shall be
issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Note (or specified portions thereof to the extent
permitted thereby), so surrendered. If any fractional share of stock would be
issuable upon the conversion of the Note, the Company shall make an
adjustment and payment therefor in cash at the current market price thereof
to the Purchaser or any holder thereof. The current market price of a share
of Common Stock shall be the Closing Price on the last Business Day
immediately preceding the day on which the Note (or specified portions
thereof) is deemed to have been converted. If a Note shall be surrendered for
conversion pursuant to this Section 8, the Company shall make an additional
payment in a check or cash to the Purchaser or holder thereof for accrued and
unpaid interest, if any, to, but excluding, the date of such conversion.
8.4 CONVERSION PRICE
The conversion price shall be as specified in the form of Note
(herein called the "Conversion Price") attached as EXHIBIT A hereto, subject
to adjustment as provided in this Section 8. References to the Conversion
Price contained herein shall mean the same as so adjusted from time to time
pursuant to Section 8.5 hereof.
8.5 ADJUSTMENT OF CONVERSION PRICE
The Conversion Price shall be adjusted from time to time by the
Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction, (i) the numerator of which
shall be the number of shares of the Common Stock outstanding at the close of
business on the date fixed for such determination and (ii) the denominator of
which shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination. If any dividend or
distribution of the type described in
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this Section 8.5(a) is declared but not so paid or made, the Conversion Price
shall again be adjusted to the Conversion Price that would then be in effect
if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price (as defined below), on the date fixed for determination
of shareholders entitled to receive such rights or warrants the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date
fixed for determination of shareholders entitled to receive such rights or
warrants by a fraction, (i) the numerator of which shall be (A) the number of
shares of Common Stock outstanding at the close of business on the date fixed
for determination of shareholders entitled to receive such rights or warrants
plus (B) the number of shares of Common Stock that the aggregate offering
price of the total number of shares so offered would purchase at such Current
Market Price, and (ii) the denominator of which shall be (A) the number of
shares of Common Stock outstanding on the date fixed for determination of
shareholders entitled to receive such rights and warrants plus (B) the total
number of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall be successively made whenever any such rights
or warrants are issued, and shall become effective immediately after the
opening of business on the day following the date fixed for determination of
shareholders entitled to receive such rights or warrants. To the extent that
shares of Common Stock are not delivered after the expiration of such rights
or warrants, the Conversion Price shall be readjusted to the Conversion Price
that would then be in effect had the adjustments made upon the issuance of
such rights or warrants been made on the basis of delivery of only the number
of shares of Common Stock actually delivered. In the event that such rights
or warrants are not so issued, the Conversion Price shall again be adjusted
to be the Conversion Price that would then be in effect if such date fixed
for the determination of shareholders entitled to receive such non-issued
rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of Common
Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights or
warrants, the value of such consideration, if other than cash, to be
conclusively determined by the Board of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into
a smaller number of shares of Common Stock, the Conversion Price in effect at
the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
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(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of
the Company (other than any dividends or distributions to which Section
8.5(a) applies) or evidences of its indebtedness or assets or rights or
warrants to subscribe for or purchase any of its securities (including
securities, but excluding any rights or warrants referred to in Section
8.5(b), and excluding any dividend or distribution (x) paid exclusively in
cash from retained earnings or current earnings or (y) referred to in Section
8.5(a)), any of the foregoing hereinafter in this Section 8.5(d) called the
"Securities," then, in each such case (unless the Company elects to reserve
such Securities for distribution to the Purchaser upon the conversion of the
Note so that the Purchaser will receive upon such conversion, in addition to
the shares of Common Stock to which it is entitled, the amount and kind of
such Securities which it would have received if it had converted the Note
into Common Stock immediately prior to the Record Date (as defined in Section
8.5(i)), for such distribution of the Securities), the Conversion Price shall
be reduced so that the same shall be equal to the price determined by
multiplying the Conversion Price in effect on the Record Date with respect to
such distribution by a fraction, (i) the numerator of which shall be (A) the
Current Market Price per share of the Common Stock on such Record Date less
(B) the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board
of Directors) on the Record Date of the portion of the Securities so
distributed applicable to one share of Common Stock, and (ii) the denominator
of which shall be the Current Market Price per share of the Common Stock,
such reduction to become effective immediately prior to the opening of
business on the day following such Record Date; PROVIDED, HOWEVER, that in
the event the then fair market value (as so determined) of the portion of the
Securities so distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price of the Common Stock on the Record
Date, in lieu of the foregoing adjustment, adequate provision shall be made
so that the Purchaser shall have the right to receive upon conversion the
amount of Securities such holder would have received had such holder
converted each Note on the Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such
dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 8.5(d) by reference to the actual or when issued trading market for
any securities, it must in doing so consider the prices in such market over
the same period used in computing the Current Market Price of the Common
Stock.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock, which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be transferred
with such shares of Common Stock; (ii) are not exercisable; and (iii) are also
issued in respect of future issuances of Common Stock, shall be deemed not to
have been distributed for purposes of this Section 8.5 (and no adjustment to the
Conversion Price under this Section 8.5 will be required) until the occurrence
of the earliest Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate adjustment (if any is
required) to the Conversion Price shall be
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made under this Section 8.5(d). If any such right or warrant, including any
such existing rights or warrants distributed prior to the date of this
Agreement, are subject to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date
with respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of
the type described in the preceding sentence) with respect thereto that was
counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 8.5 was made, (i) in
the case of any such rights or warrants that shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price
shall be readjusted upon such final redemption or repurchase to give effect
to such distribution or Trigger Event, as the case may be, as though it were
a cash distribution, equal to the per share redemption or repurchase price
received by a holder or holders of Common Stock with respect to such rights
or warrants (assuming such holder had retained such rights or warrants), made
to all holders of Common Stock as of the date of such redemption or
repurchase, and (ii) in the case of such rights or warrants that shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not
been issued.
For purposes of this Section 8.5(d) and Sections 8.5(a) and (b), any
dividend or distribution to which this Section 8.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (i)
a dividend or distribution of the evidences of indebtedness, assets or shares
of capital stock other than such shares of Common Stock or rights or warrants
(and any Conversion Price reduction required by this Section 8.5(d) with
respect to such dividend or distribution shall then be made) immediately
followed by (ii) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required
by Sections 8.5(a) and (b) with respect to such dividend or distribution
shall then be made), except (A) the Record Date of such dividend or
distribution shall be substituted as "the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution" and
"the date fixed for such determination" within the meaning of Sections 8.5(a)
and (b), and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 8.5(a).
(e) In case the Company shall, by dividend, tender offer, exchange
offer or otherwise, distribute to all holders of its Common Stock cash, then,
in such case, the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on such Record Date by a fraction,
(ii) the numerator of which shall be (A) the Current Market Price of the
Common Stock on the Record Date less (B) the amount of cash so distributed
(and not excluded as provided above) applicable to one share of Common Stock,
and (ii) the
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denominator of which shall be such Current Market Price of the Common Stock,
such reduction to be effective immediately prior to the opening of business
on the day following the Record Date; PROVIDED, HOWEVER, that in the event
the portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the Current Market Price of the Common
Stock on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that the Purchaser shall have the right to receive
upon conversion the amount of cash the Purchaser would have received had it
converted the Note on the Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such
dividend or distribution had not been declared. If any adjustment is required
to be made as set forth in this Section 8.5(e) as a result of a distribution
that is a quarterly dividend, such adjustment shall be based upon the amount
by which such distribution exceeds the amount of the quarterly cash dividend
permitted to be excluded pursuant hereto. If an adjustment is required to be
made as set forth in this Section 8.5(e) above as a result of a distribution
that is not a quarterly dividend, such adjustment shall be based upon the
full amount of the distribution.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders of consideration per share of Common
Stock having a fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors) that as of the last time (the "Expiration Time") tenders
or exchanges may be made pursuant to such tender or exchange offer (as it may
be amended) exceeds the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the Expiration Time by a
fraction, (i) the numerator of which shall be (A) the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by (B) the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, and (ii) the
denominator of which shall be the sum of (A) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
shareholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (B) the product of (x) the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Time and (y) the
Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective immediately prior to
the opening of business on the day following the Expiration Time. In the
event that the Company is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the Conversion
Price that would then be in effect if such tender or exchange offer had not
been made.
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(g) In case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than twenty-five percent (25%) of the
Common Stock outstanding and shall involve the payment by such Person of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive, and described in a resolution of the Board of Directors) at the
last time (the "Offer Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it shall have been amended)
that exceeds the Current Market Price of the Common Stock on the Trading Day
next succeeding the Offer Expiration Time, and in which, as of the Offer
Expiration Time the Board of Directors is not recommending rejection of the
offer, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the Offer Expiration Time by a fraction, (i) the numerator of which
shall be (A) the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Offer Expiration Time multiplied by (B)
the Current Market Price of the Common Stock on the Trading Day next
succeeding the Offer Expiration Time and (ii) the denominator of which shall
be the sum of (A) the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Offer
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Accepted Purchased Shares") and (B) the product of (x)
the number of shares of Common Stock outstanding (less any Accepted Purchased
Shares) on the Offer Expiration Time and (y) the Current Market Price of the
Common Stock on the Trading Day next succeeding the Offer Expiration Time,
such reduction to become effective immediately prior to the opening of
business on the day following the Offer Expiration Time. In the event that
such Person is obligated to purchase shares pursuant to any such tender or
exchange offer, but such Person is permanently prevented by applicable law
from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such tender or exchange offer had not been made.
(h) In the event that the Company distributes rights or warrants
(other than those referred to in Section 8(d)) pro rata to holders of Common
Stock, so long as any such rights or warrants have not expired or been
redeemed by the Company, the holder of any Notes surrendered for conversion
will be entitled to receive upon such conversion, in addition to the shares
of Common Stock issuable upon such conversion, a number of rights or warrants
determined as follows: (i) if such conversion occurs on or prior to the date
for the distribution to the holders of rights or warrants of separate
certificates evidencing such rights or warrants (the "Distribution Date"),
the same number of rights or warrants to which a holder of a number of shares
of Common Stock equal to the number of shares of Common Stock issuable upon
conversion is entitled at the time of such conversion in accordance with the
terms and provisions of and applicable to the rights or warrants, and (ii) if
such conversion occurs after such Distribution Date, the same number of
rights or warrants to which a holder of the number of shares of Common Stock
into which such Note was convertible immediately prior
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to such Distribution Date would have been entitled on such Distribution Date
in accordance with the terms and provisions of and applicable to the rights
or warrants. The Conversion Price of the Note will not be subject to
adjustment on account of any declaration, distribution or exercise of such
rights or warrants.
(i) For purposes of Sections 8 and 9, the following terms shall have
the meaning indicated:
(1) "Closing Price" with respect to any securities on any
day shall mean the closing sale price, regular way, on such day or, in case
no such sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, in each case as quoted on the Nasdaq National
Market or, if such security is not quoted or listed or admitted to trading on
such Nasdaq National Market, on the principal national security exchange or
quotation system on which such security is quoted or listed or admitted to
trading or, if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available, in such
manner as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors for that purpose, or a price
determined in good faith by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.
(2) "Current Market Price" per share of Common Stock on any
date shall be deemed to be the average of the daily Closing Prices for the
five (5) consecutive trading days selected by the Company commencing not more
than twenty (20) Trading Days before, and ending not later than, the earlier
of the day in question and the day before the "ex date" with respect to the
issuance or distribution requiring such computation. For purposes of this
paragraph, the term "ex date," when used with respect to any issuance or
distribution, shall mean the first date on which the Common Stock trades
regular way in such market without the right to receive such issuance or
distribution.
(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's-length transaction.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or in
which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the
date fixed for determination of shareholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security
is quoted on the Nasdaq National Market, a day on which trades may be made
thereon or (y) if the applicable
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security is listed or admitted for trading on the New York Stock Exchange or
another national security exchange, a day on which the New York Stock
Exchange or another national security exchange is open for business or (z) if
the applicable security is not so listed, admitted for trading or quoted, any
day other than a Saturday or Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order
to close.
(j) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 8.5(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if
the period is at least twenty (20) days, the reduction is irrevocable during
the period and the Board of Directors shall have made a determination that
such reduction would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to the Purchaser a
notice of the reduction at least fifteen (15) days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the
reduced Conversion Price and the period during which it will be in effect.
(k) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least one percent
(1%) in such price; PROVIDED, HOWEVER, that any adjustments that by reason of
this Section 8.5(k) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 8 shall be made by the Company and shall be made to the nearest cent
or to the nearest one-hundredth (1/100) of a share, as the case may be. No
adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. To the extent the
Note becomes convertible into cash, assets, property or securities (other
than capital stock of the Company), no adjustment need be made thereafter as
to the cash, assets, property or such securities. Interest will not accrue on
the cash.
(l) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly deliver to the Purchaser a certificate signed by
an executive officer of the Company setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Failure to deliver such notice shall not affect the legality
or validity of any such adjustment.
(m) In any case in which this Section 8.5 provides that an
adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event (i) issuing
to the Purchaser if the Purchaser converted after such record date and before
the occurrence of such event the additional shares of Common Stock
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issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to Section 8.3.
(n) For purposes of this Section 8.5, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury
of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
8.6 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE
If any of the following events occur, namely (a) any
reclassification or change of the outstanding shares of Common Stock (other
than a subdivision or combination to which Section 8.5(c) applies), (b) any
consolidation, merger or combination of the Company with another Person as a
result of which holders of Common Stock shall be entitled to receive stock,
other securities or other property or assets (including cash) with respect to
or in exchange for such Common Stock, or (c) any sale or conveyance of all or
substantially all of the properties and assets of the Company to any other
Person as a result of which holders of Common Stock shall be entitled to
receive stock, other securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing Person, as the case may be, shall execute with the
Purchaser an amendment to this Agreement providing that the Note shall be
convertible into the kind and amount of shares of stock, other securities or
other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of the number of shares of Common Stock into which the
Note was convertible immediately prior thereto (assuming, for such purposes,
a sufficient number of authorized shares of Common Stock is available to
convert the Note) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder
of Common Stock did not exercise his rights of election, if any, as to the
kind or amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance (PROVIDED that, if the kind or amount of stock, other securities
or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purposes of this Section 8.6 the kind and amount of securities,
cash or other property receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such amendment shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 8.
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The above provisions of this Section 8.6 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 8.6 applies to any event or occurrence, Section 8.5
shall not apply.
8.7 TAXES ON SHARES ISSUED
The issue of stock certificates on conversions of the Note shall be
made without charge to the Purchaser or any holder thereof for any tax in
respect of the issue thereof. The Company shall be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of stock as a result of the conversion of the Note (or any portion
thereof).
8.8 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE
WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK
The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares
of Common Stock to provide for the conversion of the Note from time to time
as the Note is presented for conversion.
Before taking any action which would cause an adjustment reducing
the Conversion Price below the then par value, if any, of the shares of
Common Stock issuable upon conversion of the Note, the Company will take all
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue shares of such Common
Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of the Note will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of the Note hereunder require
registration with or approval of any governmental authority under any federal
or state law before such shares may be validly issued upon conversion, the
Company will in good faith and as expeditiously as possible endeavor to
secure such registration or approval, as the case may be.
The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national
securities exchange or automated quotation system, the Company will, if
permitted by the rules of such exchange or automated quotation system, list
and keep listed, so long as the Common Stock shall be so listed on such
exchange or automated quotation system, all Common Stock issuable upon
conversion of the Note; PROVIDED, HOWEVER, that, if the rules of such
exchange or automated quotation system permit the Company to defer the
listing of such Common Stock until the first conversion of the Note into
Common Stock in accordance with the provisions of this Agreement, the Company
covenants to list such Common Stock issuable upon conversion of the Note in
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accordance with the requirements of such exchange or automated quotation
system at such time.
8.9 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock that would require an adjustment in the Conversion Price
pursuant to Section 8.5; or
(b) the Company shall authorize the granting to the holders of all
or substantially all of its Common Stock of rights or warrants to subscribe
for or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of
the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which
the Company is a party and for which approval of any shareholders of the
Company is required, or of the sale or transfer of all or substantially all
of the assets of the Company or any Significant Subsidiary; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company or any significant subsidiary; then
the Company shall mail to the Purchaser as promptly as possible but in any
event at least fifteen (15) days 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 warrants, 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 reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective or occur, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
9. REDEMPTION OF NOTE
9.1 REDEMPTION BY THE COMPANY
Commencing May 20, 2002 until May 20, 2003, the Note may be redeemed
by the Company, in whole or in an amount of at least Fifty Million Dollars
($50,000,000), and in
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increments of One Million Dollar ($1,000,000) in excess thereof, upon notice
as set forth in Section 9.2, at a redemption price equal to the face amount
of the portion of Note to be redeemed plus accrued and unpaid interest, if
any, to, but excluding, the date of redemption (the "Redemption Date"), if
the Closing Price shall have equaled or exceeded one hundred twenty percent
(120%) of the Conversion Price then in effect for the twenty (20) consecutive
Trading Days ending on the date of mailing of the notice of redemption
pursuant to Section 9.2 (the "Notice Date").
At any time on or after May 20, 2003, and prior to maturity, the
Note may be redeemed at the option of the Company, in whole or in an amount
of at least Fifty Million Dollars ($50,000,000), and in increments of One
Million Dollar ($1,000,000) in excess thereof, upon notice as set forth in
Section 9.2, at the face amount of the portion of the Note to be redeemed,
together with accrued and unpaid interest, if any, to, but excluding, the
Redemption Date, if the Closing Price shall have equaled or exceeded the
Conversion Price then in effect for the twenty (20) consecutive Trading Days
ending on the Notice Date. The Note shall remain convertible until fully
redeemed or repaid.
9.2 NOTICE OF REDEMPTION
In case the Company shall desire to exercise the right to redeem all
or, as the case may be, any part of the Note pursuant to Section 9.1, it
shall fix a date for redemption and shall mail or cause to be mailed a notice
of such redemption not fewer than forty-five (45) nor more than sixty (60)
days prior to the date fixed for redemption to the Purchaser. The Company may
not give notice of any redemption of the Note if a default in payment of
interest on the Note has occurred and is continuing. Such mailing shall be
made in accordance with Section 13.6.
Each such notice of redemption shall specify the aggregate principal
amount of the Note to be redeemed, the date fixed for redemption (which shall
be a Business Day), the place or places of payment, that payment will be made
upon presentation and surrender of the Note, that interest accrued to the
Redemption Date will be paid as specified in such notice, and that on and
after such date interest thereon or on the portion thereof to be redeemed
will cease to accrue. Such notice shall also state the current Conversion
Price and that the right to convert the Note or portions thereof into Common
Stock will expire on the Redemption Date. In case the Note is to be redeemed
in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that, on and after
the date fixed for redemption, upon surrender of the Note, a new Note or
Notes in principal amount equal to the unredeemed portion thereof will be
issued.
On or prior to the Redemption Date specified in the notice of
redemption given as provided in this Section 9.2, the Company will set aside,
segregate and hold in trust an amount of money in immediately available funds
sufficient to redeem on the Redemption Date the Note (or portions thereof) so
called for redemption (to the extent not surrendered for conversion into
Common Stock), together with accrued interest to, but excluding, the
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Redemption Date. If the Note is converted pursuant hereto prior to such
redemption, any money so segregated and held in trust for the redemption of
the Note shall be discharged from such trust.
9.3 PAYMENT OF PORTION OF NOTE CALLED FOR REDEMPTION
If notice of redemption has been given as above provided, the Note
or portion of the Note with respect to which such notice has been given
shall, unless converted into Common Stock pursuant to the terms hereof,
become due and payable on the Redemption Date and at the place or places
stated in such notice, together with interest accrued to, but excluding, the
Redemption Date, and on and after such date (unless the Company shall default
in the payment of the Note, together with interest accrued to such date)
interest on the Note or portion of Note so called for redemption shall cease
to accrue and such portion of the Note shall cease after the close of
business on the Business Day next preceding the Redemption Date to be
convertible into Common Stock and the Purchaser shall have no right in
respect of such portion of the Note except the right to receive the principal
amount thereof and unpaid interest to, but excluding, the Redemption Date. On
presentation and surrender of the Note at a place of payment in such notice
specified, the Note or the specified portions thereof shall be paid and
redeemed by the Company, together with interest accrued thereon to, but
excluding, the Redemption Date.
Upon presentation of the Note, if it is to be redeemed in part only,
the Company shall execute authenticate and make available for delivery to the
holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion
of the Note so presented.
Notwithstanding the foregoing, the Company shall not redeem any
portion of the Note or mail any notice of redemption during the continuance
of a default in payment of interest on the Note. If any portion of the Note
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid or duly provided for, bear
interest from the Redemption Date at the rate borne by the Note and the Note
shall remain convertible into Common Stock until the principal shall have
been paid or duly provided for.
10. EVENTS OF DEFAULT
10.1 ACCELERATION
In case one or more of the following Events of Default (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of any installment of interest upon the
Note as and when the same shall become due and payable, and continuance of
such default for a period of thirty (30) days, whether or not such payment is
permitted under Section 11 hereof; or
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(b) default in the payment of the principal of or premium, if any,
on the Note as and when the same shall become due and payable at maturity, by
acceleration or otherwise, whether or not such payment is permitted under
Section 11 hereof; or
(c) failure on the part of the Company duly to observe or perform
any covenants or agreements (other than the payment obligations described in
clause (a) and (b) above) on the part of the Company in the Note or in this
Agreement continued for a period of sixty (60) days after the date on which
written notice of such failure, requiring the Company to remedy the same,
shall have been given by the Purchaser to the Company; or
(d) the Company or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or any Significant Subsidiary or its or
such Significant Subsidiary's debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any Significant Subsidiary or any substantial part of the property of the
Company or any Significant Subsidiary, or shall consent to any such relief or
to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it or any Significant
Subsidiary, or shall make a general assignment for the benefit of creditors,
or shall fail generally to pay its debts as they become due; or
(e) an involuntary case or other proceeding shall be commenced
against the Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or any Significant
Subsidiary or its or such Significant Subsidiary's debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any Significant Subsidiary or any substantial
part of the property of the Company or any Significant Subsidiary, and such
involuntary case or other proceeding shall remain undismissed and unstayed
for a period of ninety (90) consecutive days; or
(f) final unsatisfied judgements not covered by insurance
aggregating in excess of Five Million Dollars ($5,000,000) at any one time
rendered against the Company or any of its Significant Subsidiaries and not
stayed or discharged within sixty (60) days; or
(g) the failure of the Company to perform any conversion of the Note
required under this Agreement and the continuance of such failure for thirty
(30) days; or
(h) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its subsidiaries (or
the payment of which is guaranteed by the Company or any of its
subsidiaries), other than indebtedness owed to the Company or a wholly owned
subsidiary, whether such Indebtedness or guarantee now exists, or is created
after the date of this Agreement, which default (i) is caused by a failure to
pay principal of or premium, if any, on such indebtedness or (ii) results in
the acceleration of such indebtedness prior to maturity, and, in each case,
the principal amount of any such indebtedness, together
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with the principal amount of any other such indebtedness under which there
has been a payment default or the maturity of which has been so accelerated,
aggregates Five Million Dollars ($5,000,000) or more; or
(i) the representations and warranties of the Company in this
Agreement were not true and correct in any material respect when made and at
the time of the Closing;
then, and in each and every such case (other than an Event of Default
specified in Section 10.1(d) or (e) with respect to the Company), unless the
principal of the Note shall have already become due and payable, the
Purchaser, by notice in writing to the Company, may declare the principal of
and premium, if any, on the Note and the interest accrued thereon 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 Agreement or in
the Note contained to the contrary notwithstanding. If an Event of Default
specified in Section 10.1(d) or (e) with respect to the Company occurs, the
principal of the Note and the interest accrued thereon shall be immediately
and automatically due and payable without necessity of further action. This
provision, however, is subject to the conditions that if, at any time after
the principal of the Note shall have been so declared due and payable, and
before any judgment or decree for the payment of the monies due shall have
been obtained or entered as hereinafter provided, the Company shall pay a sum
sufficient to pay all matured installments of interest upon the Note and the
principal of and premium, if any, on the Note which shall have become due
otherwise than solely by a declaration of acceleration (with interest on
overdue installments of interest (to the extent that payment of such interest
is enforceable under applicable law) and on such principal and premium, if
any, at the rate borne by the Note, to the date of such payment or deposit),
and if any and all defaults under this Agreement, other than the nonpayment
of principal of and premium, if any, and accrued interest on the Note which
shall have become due solely by declaration of acceleration, shall have been
cured or waived, then and in every such case the Purchaser, by written notice
to the Company, may waive all defaults or Events of Default 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 Event
of Default, or shall impair any right consequent thereon.
10.2 PAYMENTS OF NOTE ON DEFAULT; SUIT THEREFOR
The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon the Note as and when the same
shall become due and payable, and such default shall have continued for a
period of thirty (30) days, or (b) in case default shall be made in the
payment of the principal of or premium, if any, on the Note as and when the
same shall have become due and payable, whether at maturity of the Note or in
connection with any redemption by the Company under this Agreement or by
declaration of acceleration or otherwise, then, upon the Purchaser's demand,
the Company will pay to the Purchaser the whole amount that then shall have
become due and payable on the Note for principal and premium, if any, or
interest, as the case may be, with interest upon the overdue principal and
premium, if any, and (to the extent that payment of such interest is
enforceable under
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applicable law) upon the overdue installments of interest at a floating LIBOR
Rate adjusted quarterly on each March 31, June 30, September 30 and December
31 during the period that such default is continuing; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Note under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company
or such other obligor, or in the case of any other judicial proceedings
relative to the Company or such other obligor upon the Note, or to the
creditors or property of the Company or such other obligor, then irrespective
of whether the principal of the Note shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Purchaser shall have made any demand pursuant to the provisions of this
Section 10.2, the Purchaser shall be entitled and empowered, by intervention
in such proceedings or otherwise, to file and prove a claim or claims for the
whole amount of principal, premium, if any, and interest owing and unpaid in
respect of the Note, and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents as may be necessary or
advisable in order to have the Purchaser's claims allowed in such judicial
proceedings relative to the Company or any other obligor on the Note, its or
their creditors, or its or their property, and to collect and receive any
monies or other property payable or deliverable on any such claims. To the
extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for
any reason, payment of the same shall be secured by a lien on, and shall be
paid out of, any and all distributions, dividends, monies, securities and
other property which the Purchaser may be entitled to receive in such
proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
11. SUBORDINATION OF NOTE
11.1 AGREEMENT OF SUBORDINATION
The Company covenants and agrees, and the Purchaser covenants and
agrees, that the Note shall be issued subject to the provisions of this
Section 11 and the Purchaser accepts and agrees to be bound by such
provisions.
The payment of the principal of, premium, if any, and interest on
the Note issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior
payment in full in cash or other payment satisfactory to the holders of
Senior Indebtedness of all Senior Indebtedness of the Company, whether
outstanding at the date of this Agreement or thereafter incurred.
No provision of this Section 10 shall prevent the occurrence of any
default or Event of Default hereunder.
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11.2 PAYMENTS ON THE NOTE
No payment shall be made with respect to the principal of, premium,
if any, or interest on the Note if:
(a) a default in the payment of principal, premium, if any, or
interest in respect of Designated Senior Indebtedness occurs and is
continuing (a "Payment Default"), unless and until such Payment Default shall
have been cured or waived or shall have ceased to exist; or
(b) a default, other than a Payment Default, on any Designated
Senior Indebtedness occurs and is continuing that then permit holders of such
Designated Senior Indebtedness to accelerate its maturity and the Purchaser
receives a notice of the default (a "Payment Blockage Notice") from a
Representative of Designated Senior Indebtedness (a "Non-Payment Default").
If the Purchaser receives any Payment Blockage Notice pursuant to
clause (b) above, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section 11.2 unless and until (i) at least three hundred
sixty-five (365) days shall have elapsed since the initial effectiveness of
the immediately prior Payment Blockage Notice and (ii) all scheduled payments
of principal, premium, if any, and interest on the Note that have come due
have been paid in full in cash. No Non-Payment Default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Purchaser shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
The Company may and shall resume payments on and distributions in
respect of the Note upon:
(1) in the case of a Payment Default, the earlier of (i)
the date upon which any such Payment Default is cured or waived or ceases to
exist or the underlying indebtedness has been repaid or (ii) two hundred
seventy (270) days after such Payment Default, or
(2) in the case of a Non-Payment Default, the earlier of
(i) the date upon which such default is cured or waived or ceases to exist or
(ii) one hundred seventy-nine (179) days after the applicable Payment
Blockage Notice is received by the Purchaser if the maturity of such
Designated Senior Indebtedness has not been accelerated and no Payment
Default with respect to any Designated Senior Indebtedness has occurred which
has not been cured or waived (in which case clause (1) shall be applicable)
or (iii) the Person who declared such Payment Blockage approves such payment,
unless this Section 11 otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary
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or in bankruptcy, insolvency, receivership or other proceedings, all amounts
due or to become due upon all Senior Indebtedness shall first be paid in full
in cash or other payment satisfactory to the holders of such Senior
Indebtedness, or payment thereof in accordance with its terms provided for in
cash or other payment satisfactory to the holders of such Senior Indebtedness
before any payment is made on account of the principal of, premium, if any,
or interest on the Note, and upon any such dissolution or winding up or
liquidation or reorganization of the Company or bankruptcy, insolvency,
receivership or other proceeding, any payment by the Company, or distribution
of assets of the Company of any kind or character, whether in cash, property
or securities, to which the Purchaser would be entitled, except for the
provisions of this Section 11, shall (except as aforesaid) be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Purchaser if
received by them or it, directly to the holders of Senior Indebtedness (pro
rata to such holders on the basis of the respective amounts of Senior
Indebtedness held by such holders, or as otherwise required by law or a court
order) or their Representative or Representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full in
cash or other payment satisfactory to the holders of such Senior
Indebtedness, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness, before any payment or
distribution is made to the Purchaser.
For purposes of this Section 11, the words, "cash, property or
securities" shall not be deemed to include 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, the
payment of which is subordinated at least to the extent provided in this
Section 11 with respect to the Note to the payment of all Senior Indebtedness
which may at the time be outstanding.
In the event of the acceleration of the Note because of an Event of
Default, no payment or distribution shall be made to the Purchaser in respect
of the principal of, premium, if any, or interest on the Note, until all
Senior Indebtedness has been paid in full in cash or other payment
satisfactory to the holders of Senior Indebtedness or such acceleration is
rescinded in accordance with the terms of this Agreement. If payment of the
Note is accelerated because of an Event of Default, the Company shall
promptly notify holders of Designated Senior Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by
way of setoff or otherwise), prohibited by the foregoing provisions in this
Section 11.2, shall be received by the Purchaser before all Senior
Indebtedness is paid in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Indebtedness, such payment or distribution shall
be held in trust for the benefit of and shall be paid over or delivered to
the
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holders of Senior Indebtedness or their Representative or Representatives, or
to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Company, for
application to the payment of any Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in cash or other
payment satisfactory to the holders of such Senior Indebtedness, after giving
effect to any concurrent payment or distribution to or for the holders of
such Senior Indebtedness.
11.3 SUBROGATION OF NOTE
Subject to the payment in full of all Senior Indebtedness, the
rights of the holder of the Note shall be subrogated to the extent of the
payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Section 11 (equally and ratably with the
holders of all indebtedness of the Company that by its express terms, is
subordinated to other indebtedness of the Company to substantially the same
extent as the Note is subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal, premium, if any,
and interest on the Note shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Purchaser would
be entitled except for the provisions of this Section 11, and no payment over
pursuant to the provisions of this Section 11, to or for the benefit of the
holders of Senior Indebtedness by the Purchaser, shall, as among the Company,
its creditors other than holders of Senior Indebtedness, and the Purchaser be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness; and no payments or distributions of cash, property or
securities to or for the benefit of the Purchaser pursuant to the subrogation
provisions of this Section 11, which would otherwise have been paid to the
holders of Senior Indebtedness, shall be deemed to be a payment by the
Company to or for the account of the Note. It is understood that the
provisions of this Section 11 are and are intended solely for the purposes of
defining the relative rights of the Purchaser, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Section 11 or elsewhere in this Agreement
or in the Note is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Purchaser,
the obligation of the Company, which is absolute and unconditional, to pay to
the Purchaser the principal of, premium, if any, and interest on the Note 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 Purchaser
and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Purchaser from
exercising all remedies otherwise permitted by applicable law upon default
under this Agreement, subject to the rights, if any, under this Section 11 of
the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
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11.4 AUTHORIZATION TO EFFECT SUBORDINATION
The Purchaser, by its acceptance thereof, authorizes and directs the
Company on the Purchaser's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Section 11
and appoints the Company to act as the Purchaser's attorney-in-fact for any
and all such purposes. If the Company does not file a proper proof of claim
or proof of debt in the form required in any bankruptcy, dissolution, winding
up, liquidation or reorganization proceeding at least thirty (30) days before
the expiration of the time to file such claim, the holders of any Senior
Indebtedness or their representatives are hereby authorized to file an
appropriate claim for and on behalf of the Purchaser.
11.5 NO IMPAIRMENT OF SUBORDINATION
No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and
covenants of this Agreement, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with.
11.6 CERTAIN CONVERSIONS NOT DEEMED PAYMENT
For the purposes of this Section 11 only, (a) the issuance and
delivery of junior securities upon conversion of the Note in accordance with
Section 8 shall not be deemed to constitute a payment or distribution on
account of the principal of, premium, if any, or interest on the Note or on
account of the purchase or other acquisition of the Note, and (b) the
payment, issuance or delivery of cash (except in satisfaction of fractional
shares pursuant to Section 8.3), property or securities (other than junior
securities) upon conversion of a Note shall be deemed to constitute payment
on account of the principal of, premium, if any, or interest on such Note.
For the purposes of this Section 11.6, the term "junior securities" means (a)
shares of any stock of any class of the Company or (b) securities of the
Company that are subordinated in right of payment to all Senior Indebtedness
that may be outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater extent than,
the Note is so subordinated as provided in this Section. Nothing contained in
this Section 11 or elsewhere in this Agreement or in the Note is intended to
or shall impair, as among the Company, its creditors (other than holders of
Senior Indebtedness) and the Purchaser, the right, which is absolute and
unconditional, of the Purchaser to convert the Note in accordance with
Section 8.
11.7 SENIOR INDEBTEDNESS ENTITLED TO RELY
The holders of Senior Indebtedness (including, without limitation,
Designated Senior Indebtedness) shall have the right to rely upon this
Section 11, and no amendment or
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modification of the provisions contained herein shall diminish the rights of
such holders unless representatives of such holders shall have agreed in
writing thereto.
11.8 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT
Upon any payment or distribution of assets of the Company referred
to in this Section 11, the Purchaser shall be entitled to rely upon any order
or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization,
distribution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or dissolution, delivered to the Purchaser, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Section 11.
11.9 DISTRIBUTION OR NOTICE TO REPRESENTATIVE
Whenever a distribution is to be made or a notice given to a holder
of Senior Indebtedness of the Company, the distribution may be made and the
notice given to its representative (if any).
11.10 PURCHASER NOT A FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS
The Purchaser shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and shall not be liable to any
such holders if it shall mistakenly pay over or distribute to the Company or
any other person, money or assets to which holders of Senior Indebtedness of
the Company shall be entitled by virtue of this Section 11 or otherwise.
12. TRANSFER
12.1 RESTRICTIONS ON TRANSFER
(a) Unless (i) the Company consents in writing prior to such
transfer, (ii) such transfer is to a Person that is an Affiliate of the
Purchaser or (iii) such transfer is made in accordance with the terms of this
Section 12, the Purchaser shall not transfer the Note to any Person.
(b) Notwithstanding anything to the contrary contained herein, the
Purchaser may only transfer the Note in accordance with this Section 12 if
the aggregate principal amount of the portion of the Note to be so
transferred is greater than Fifty Million Dollars ($50,000,000).
12.2 FIRST REFUSAL RIGHTS
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(a) At least six (6) Business Days prior to the effective date of
any proposed transfer of any portion of the Note (a "Transfer"), the
Purchaser or the then holder of such portion of the Note (each, a
"Transferring Holder") shall deliver a written notice (the "Offer Notice") to
the Company specifying in reasonable detail the identity of the prospective
transferee(s), the aggregate principal amount of the portion of the Note to
be transferred (the "Subject Securities") and the price (if any) and other
terms and conditions of the proposed Transfer. The Transferring Holder shall
not consummate such proposed Transfer until at least six (6) Business Days
after the delivery of the Offer Notice, unless the parties to the Transfer
have been finally determined pursuant to this Section 12 prior to the
expiration of such 6-Business Day period (the date of the first to occur of
such delivery or such final determination is referred to herein as the
"Authorization Date").
(b) The Company may elect to redeem all (but not less than all) of
the Subject Securities, at a redemption price equal to the price specified in
the Offer Notice by delivering written notice of such election to the
Transferring Holder as soon as practicable, but in any event within five (5)
Business Days after delivery of the Offer Notice.
(c) If the Company has elected to redeem all of the Subject
Securities from the Transferring Holder, such redemption shall be consummated
(i) as soon as practicable after delivery of the election notice(s) to the
Transferring Holder, but in any event within twenty (20) days after the
Authorization Date, and (ii) in accordance with the terms of Section 9.3.
(d) If the Company does not elect to redeem all of the Subject
Securities, the Transferring Holder may, within the forty-five (45) days
following the Authorization Date, transfer such Subject Securities to the
transferee(s) specified in the Offer Notice on terms no more favorable to the
transferee(s) thereof than specified in the Offer Notice. Any Subject
Securities not so transferred within such 45-day period shall again be
subject to the provisions of this Section 12 upon any subsequent Transfer.
12.3 TRANSFER PROCEDURES
(a) The Company shall cause to be kept at its offices a register
(the register maintained in such office and in any other office or agency of
the Company designated pursuant to Section 6.2 being herein sometimes
collectively referred to as the "Note register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of the Note and of Transfers of the Note. The Note register
shall be in written form or in any form capable of being converted into
written form within a reasonably prompt period of time. The Company is hereby
appointed "Note registrar" for the purpose of registering the Note and
Transfers of the Note as herein provided. The Company may appoint one or more
co-registrars in accordance with Section 6.2.
(b) Upon surrender for registration of transfer of any Note to the
Note registrar or any co-registrar, and satisfaction of the requirements for
such transfer set forth in this Section 12 the Company shall execute and
deliver in the name of the designated transferee or
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transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may
be required by this Agreement.
(c) Notes may be exchanged for other Notes of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Notes to be exchanged at any such office or agency maintained by the Company
pursuant to Section 6.2. Whenever any Notes are so surrendered for exchange,
the Company shall execute, and deliver, the Notes which the holder making the
exchange is entitled to receive bearing registration numbers not
contemporaneously outstanding.
(d) All Notes issued upon any registration of Transfer or exchange
of Notes shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Agreement, as the Notes
surrendered upon such registration of Transfer or exchange.
(e) All Notes presented or surrendered for registration of Transfer
or for exchange, redemption or conversion shall (if so required by the
Company or the Note registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Note registrar, and the Notes shall be duly executed by the
Purchaser or holder thereof or its attorney duly authorized in writing.
(f) No service charge shall be made for any registration of Transfer
or exchange of Notes, but the Company may require payment of a sum sufficient
to cover any tax, assessment or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes.
(g) Neither the Company nor any Note registrar shall be required to
exchange or register a Transfer of any Notes or portions thereof surrendered
for conversion pursuant to Section 8.
(h) Every Note that bears or is required under this Section 12 to
bear the legend set forth in this Section 12.3(h) (together with any Common
Stock issued upon conversion of the Note and required to bear the legend set
forth in Section 12.3(h), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 12
(including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company,
and the holder of each such Note, by such holder's acceptance thereof, agrees
to be bound by all such restrictions on transfer. As used in Sections 12.3(h)
and 12.3(i), the term "transfer" encompasses any sale, pledge, transfer or
other disposition whatsoever of any Restricted Security.
Any certificate evidencing such Note (and all securities issued in
exchange therefor or substitution thereof, other than Common Stock, if any,
issued upon conversion thereof, which shall bear the legend set forth in
Section 12.3(i), if applicable) shall bear a legend in substantially the
following form unless otherwise agreed by the Company in writing:
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THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES THAT IT
WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE NOTE EVIDENCED HEREBY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY
OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
IMMUNEX CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A DENOMINATION OF NO LESS THAN
$250,000 THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE COMPANY A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH
LETTER IS ATTACHED AS ANNEX A), (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR
(E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER); (3) AGREES THAT PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (2)(E) ABOVE), IT WILL FURNISH TO THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE NOTE EVIDENCED HEREBY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE COMPANY. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR IS A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
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EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE
(2)(E) ABOVE OR UPON ANY TRANSFER OF THE NOTE EVIDENCED HEREBY UNDER RULE 144
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE
TERMS "UNITED STATES" AND "UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Note (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance
with their terms or as to conditions for removal of the foregoing legend set
forth therein have been satisfied may, upon surrender of such Note for
exchange to the Note registrar in accordance with the provisions of this
Section 12, be exchanged for a new Note or Notes, of like tenor and aggregate
principal amount, which shall not bear the restrictive legend required by
this Section 12.3(h).
(i) Any stock certificate representing Common Stock issued upon
conversion of any Note shall bear a legend in substantially the following
form, unless such Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and
which continues to be effective at the time of such transfer) or such Common
Stock has been issued upon conversion of the Note that have been transferred
pursuant to a registration statement that has been declared effective under
the Securities Act, or unless otherwise agreed by the Company in writing with
written notice thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF
AGREES THAT, UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144 UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO IMMUNEX CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT) IN A DENOMINATION OF NO LESS THAN $250,000
THAT PRIOR TO SUCH TRANSFER, FURNISHES TO CHASEMELLON SHAREHOLDER SERVICES,
LLC, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
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THE RESTRICTIONS ON TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM
OF WHICH LETTER IS ATTACHED AS ANNEX A), (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR
(E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE (1)(E) ABOVE), IT WILL FURNISH TO CHASEMELLON SHAREHOLDER SERVICES,
LLC, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO
CLAUSE (1)(E) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "UNITED
STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer
shall have expired in accordance with their terms or as to which the
conditions for removal of the foregoing legend set forth therein have been
satisfied may, upon surrender of the certificates representing such shares of
Common Stock for exchange in accordance with the procedures of the transfer
agent for the Common Stock, be exchanged for a new certificate or
certificates for a like number of shares of Common Stock, which shall not
bear the restrictive legend required by this Section 12.3(i).
13. MISCELLANEOUS
13.1 NOTE PAYMENTS
The Company agrees that, so long as the Purchaser shall hold the
Note, it will make payments of principal thereof and premium, if any, and
interest thereon, which comply with the terms of this Agreement, by wire or
electronic funds transfer of immediately available funds for credit to the
Purchaser's account number 000-000-000 at Chase Manhattan Bank,
ABA#000-000-000, or such other account or accounts in the United States as
the Purchaser may designate in writing, notwithstanding any contrary
provision herein or in any Note with respect to the place of payment. In the
event that the Purchaser is not the sole holder of this Note, the Company
will pay to the registered holder(s), as set forth in the Note register at
the office or agency of the Company on a pro rata basis. If the Company
receives wiring
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instructions five (5) Business Days prior to the Interest Payment Date, the
Company shall by wire or electronic funds transfer of immediately available
funds make payment of principal, premium and interest.
13.2 EXPENSES
The Company will pay all costs and expenses incurred by the
Purchaser in connection with any amendments, waivers or consents under or in
respect of this Agreement or the Note requested by the Company (whether or
not such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this
Agreement or the Note, and (b) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of
the Company or in connection with any workout or restructuring of the
transactions contemplated hereby and by the Note.
13.3 CONSENT TO AMENDMENTS
This Agreement may be amended, and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed
by it, if the Company shall obtain the written consent to such amendment,
action or omission to act, of the Purchaser. Notwithstanding anything to the
contrary contained herein, the Company and Purchaser shall cooperate to amend
this Agreement at the Purchaser's request to permit multiple holders of
portions of the Note, and the Purchaser shall cause all prospective
transferees to be bound by the provisions of this Agreement, as amended. All
permitted transferees of the Note will receive all rights, and be subject to
all obligations, of Purchaser hereunder upon execution and delivery of such
amended Agreement.
13.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
All representations and warranties contained herein or made in
writing by or on behalf of the Company in connection herewith shall survive
the execution and delivery of this Agreement and the Note, the transfer by
the Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any Transferee, regardless of
any investigation made at any time by or on behalf of the Purchaser or any
Transferee. All representations, warranties and covenants contained herein
made by the Purchaser or any holder shall survive the execution and delivery
of this Agreement and the Note, and may be relied upon by the Company and its
successors and assigns. Subject to the preceding sentences, this Agreement
and the Note embody the entire agreement and understanding between the
Purchaser and the Company, and supersede all prior agreements and
understandings, relating to the subject matter hereof.
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13.5 SUCCESSORS AND ASSIGNS
All covenants and other agreements in this Agreement contained by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so
expressed or not.
13.6 NOTICES
All written communications provided for hereunder shall be sent by
facsimile transmission and promptly confirmed by nationwide overnight
delivery service (with charges prepaid) and (x) if to the Purchaser,
addressed to it at Five Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000, Attn:
Senior Vice President and General Counsel, fax: (000) 000-0000, phone: (973)
000-0000, or at such other address as the Purchaser shall have specified to
the Company in writing, and (y) if to the Company, addressed to it at 51
University, Xxxxxxx, Xxxxxxxxxx 00000, Attn: Senior Vice President and
General Counsel, fax: (000) 000-0000, phone: (000) 000-0000, or at such other
address as the Company shall have specified to the Purchaser in writing. Any
such notice or communication, if addressed, sent and delivered as provided
above, shall be deemed effective upon the actual receipt of such notice or
communication.
13.7 DESCRIPTIVE HEADINGS
The descriptive headings of the several paragraphs of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
13.8 GOVERNING LAW
This Agreement shall be construed and enforced in accordance with,
and the rights of the Parties shall be governed by, the law of the State of
New York.
13.9 COUNTERPARTS
This Agreement may be executed simultaneously in two (2) or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more
than one such counterpart.
13.10 SEVERABILITY
Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall (to the full extent permitted by law) not invalidate
or render unenforceable such provision in any other jurisdiction.
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13.11 PUBLICITY
No party hereto shall issue any press release or otherwise make any
statements to any third party with respect to this Agreement, the issuance of
the Note or the other transactions contemplated hereby. Notwithstanding the
foregoing, the Company may issue a press release announcing this Agreement,
the issuance of the Note and the other transactions contemplated hereby (a)
with the consent of Purchaser, which consent may not be unreasonably
withheld, or (b) as required by law.
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The execution hereof by the Purchaser shall constitute a contract
among the Company and the Purchaser for the uses and purposes herein above
set forth.
Very truly yours,
IMMUNEX CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: CEO
----------------------------------
Agreed and accepted:
AMERICAN HOME PRODUCTS
CORPORATION
By /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------------
Title: Vice President
----------------------------------
EXHIBIT A
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES THAT IT
WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE NOTE EVIDENCED HEREBY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY
OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
IMMUNEX CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A DENOMINATION OF NO LESS THAN
$250,000 THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO IMMUNEX CORPORATION (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER IS ATTACHED AS ANNEX A),
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) AGREES THAT
PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(E)
ABOVE), IT WILL FURNISH TO IMMUNEX CORPORATION SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY PRIOR TO
THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE
EVIDENCED HEREBY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO IMMUNEX
CORPORATION. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR IS A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO IMMUNEX CORPORATION, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE NOTE
EVIDENCED HEREBY PURSUANT TO CLAUSE (2)(E) ABOVE OR UPON ANY TRANSFER OF THE
NOTE EVIDENCED HEREBY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "UNITED
STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
-2-
IMMUNEX CORPORATION
3% CONVERTIBLE SUBORDINATED NOTE DUE 2006
No.: A-1 $450,000,000
Immunex Corporation, a corporation duly organized and validly
existing under the laws of the State of Washington (herein called the
"Company", which term includes any successor corporation), for value received
hereby promises to pay to American Home Products Corporation or registered
assigns, the principal sum of Four Hundred Fifty Million Dollars
($450,000,000) on May 20, 2006, at the office or agency of the Company, in
such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts,
and to pay interest, semi-annually on April 30 and October 31 of each year,
commencing October 31, 1999, on said principal sum at said office or agency,
in like coin or currency, at the rate per annum of 3%, until payment of said
principal sum has been made. Interest on the Note will accrue from the most
recent date to which interest has been paid, or if no interest has been paid,
from May 20, 1999. The interest payable on the Note on any April 30 or
October 31 will be paid to the Person entitled thereto as it appears in the
Note register at the close of business on the record date, which shall be the
April 15 or October 15 (whether or not a Business Day) next preceding such
April 30 or October 31. Interest may, at the option of the Company, be paid
either (i) by check mailed to the registered address of such Person or (ii)
by transfer to an account maintained by such Person located in the United
States. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, including, without limitation, provisions
subordinating the payment of principal of and premium, if any, and interest
on the Note to the prior payment in full of all Senior Indebtedness, as
defined herein, and provisions giving the holder of this Note the right to
convert this Note into Common Stock of the Company on the terms and subject
to the limitations referred to on the reverse hereof. Such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Note shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of said State.
-3-
IN WITNESS WHEREOF, Immunex Corporation has caused this Note to be
duly executed under its corporate seal to be affixed or imported hereon.
IMMUNEX CORPORATION
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Attest:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Dated:
-----------------------------
-4-
[FORM OF REVERSE SIDE OF NOTE]
IMMUNEX CORPORATION
3% CONVERTIBLE SUBORDINATED NOTE DUE 2006
This Note is duly authorized and designated as its 3% Convertible
Subordinated Note due 2006 (herein called the "Note"), limited to the
aggregate principal amount of $450,000,000 pursuant to the Note Purchase
Agreement dated as of May 20, 1999 (herein called the "Note Purchase
Agreement"), between the Company and the Purchaser.
In case an Event of Default, as defined in the Note Purchase
Agreement, shall have occurred and be continuing, the principal of, premium,
if any, and accrued interest on the Note may be declared, and upon said
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Note Purchase Agreement.
The Purchaser may waive any past default or Event of Default and its
consequences. Any such consent or waiver by the Purchaser shall be conclusive
and binding upon such holder and upon all future holders and owners of this
Note and any Notes which may be issued in exchange or substitute hereof,
irrespective of whether or not any notation thereof is made upon this Note or
such other Notes.
The indebtedness evidenced by the Note is, to the extent and in the
manner provided in the Note Purchase Agreement, expressly subordinate and
subject in right of payment to the prior payment in full of all Senior
Indebtedness of the Company, as defined in the Note Purchase Agreement,
whether outstanding at the date of the Note Purchase Agreement or thereafter
incurred, and this Note is issued subject to the provisions of the Note
Purchase Agreement with respect to such subordination. Each holder of this
Note, by accepting the same, agrees to and shall be bound by such provisions
and authorizes the Company on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and
appoints the Company his attorney-in-fact for such purpose.
No reference herein to the Note Purchase Agreement and no provision
of this Note or of the Note Purchase Agreement shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Note at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.
Interest on the Note shall be computed on the basis of a three
hundred sixty (360) day year.
At the office or agency of the Company referred to on the face
hereof, and in the manner and subject to the limitations provided in the Note
Purchase Agreement, without payment of any service charge but with payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration or exchange of the Note, the Note
may be exchanged for a like aggregate principal amount of Notes of other
authorized
-5-
denominations, which may in turn be exchanged for a like aggregate principal
amount of Notes of other authorized denominations.
The Note is not subject to redemption through the operation of any
sinking fund.
Subject to the provisions of the Note Purchase Agreement, the holder
hereof has the right, at its option, at any time through the close of
business on the final maturity date of the Note to convert the principal
hereof or any portion of such principal in an amount of at least $50,000,000,
and in increments of $1,000,000 in excess thereof, into that number of shares
of the Company's Common Stock, as said shares shall be constituted at the
date of conversion, obtained by dividing the principal amount of this Note or
portion thereof to be converted, by $173.68 (the "Conversion Price") or such
Conversion Price as adjusted from time to time as provided in the Note
Purchase Agreement, upon surrender of this Note, together with a conversion
notice as provided in the Note Purchase Agreement, to the Company at the
office or agency of the Company maintained for that purpose in accordance
with the terms of the Note Purchase Agreement, and, unless the shares
issuable on conversion are to be issued in the same name as this Note, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or by his duly authorized
attorney. No adjustment in respect of interest or dividends will be made upon
any conversion. No fractional shares will be issued upon any conversion, but
an adjustment in cash will be made, as provided in the Note Purchase
Agreement, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Note or Notes for conversion. If the Note
(or any portion thereof) shall be surrendered for conversion pursuant to the
Note Purchase Agreement, the Company shall make an additional payment in a
check or cash to the Purchaser or holder thereof for accrued and unpaid
interest, if any, to, but excluding, the date of such conversion.
Upon due presentment for registration of transfer of this Note at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Note Purchase Agreement, a new Note or Notes of
authorized denominations for an equal aggregate principal amount will be
issued to the transferee in exchange thereof; subject to the limitations
provided in the Note Purchase Agreement, without charge.
The Company, any paying agent, any conversion agent and any Note
registrar may deem and treat the registered holder hereof as the absolute
owner of this Note (whether or not this note shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Company or any Note registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor any Trustee nor any other
authenticating agent nor any paying agent nor other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of
the sum or sums paid, satisfy and discharge liability for monies payable on
this Note.
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof; and no recourse under or upon any obligation, covenant or agreement
of the Company in the Note Purchase Agreement or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against
any
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incorporator, shareholder, employee, agent, officer or director or
subsidiary, as such, past, present or future, of the Company or of any
successor Person, either directly or through the Company or any successor
Person, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
This Note shall be deemed to be a contract made under the laws of
New York, and for all purposes shall be construed in accordance with the laws
of New York.
Terms used in this Note and defined in the Note Purchase Agreement
are used herein as therein defined.
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CONVERSION NOTICE
TO: IMMUNEX CORPORATION
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note into shares of Common Stock of
Immunex Corporation in accordance with the terms of the Note Purchase
Agreement referred to in this Note, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Notes representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below.
Any amount required to be paid to the undersigned on account of interest
accompanies this Note.
Dated:
Signature(s)
Fill in the registration of shares of Common Stock to be issued, and
Notes to be delivered, other than to and in the name of the registered holder:
(Name)
(Street Address)
(City, State and Zip Code)
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Please print name and address
Principal amount to be converted
(if less than all): $
Social Security or Other Taxpayer
Identification Number:
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ASSIGNMENT
For value received _________________________ hereby sell(s),
assign(s) and transfer(s) unto _________________________ (Please insert
social security or other Taxpayer Identification Number of assignee) the
within Note, and hereby irrevocably constitutes and appoints
_________________________ attorney to transfer the said Note on the books of
the Company, with full power of substitution in the premises.
In connection with any transfer of the Note within the United States
or to, or for the account of, U.S. persons (in each case as defined in
Regulation S under the Securities Act) and within the period prior to the
expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision) (other than any
transfer pursuant to a registration statement that has been declared
effective under the Securities Act), the undersigned confirms that such Note
is being transferred:
To Immunex Corporation or a subsidiary thereof; or
Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended, in a
minimum denomination of $100,000; or
Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such Note
is not being transferred to an "affiliate" of the Company as defined in Rule
144 under the Securities Act of 1933, as amended (an "Affiliate").
The transferee is an Affiliate of the Company.
Dated:
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Signature(s)
NOTICE: The signature of the conversion notice or the assignment
must correspond with the name as written upon the face of the Note in every
particular without alteration or enlargement or any change whatever.
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EXHIBIT B
AFFILIATE: The term "Affiliate" shall mean any Person directly or
indirectly controlling, controlled by or under direct or indirect control
with either the Company or the Purchaser, as the case may be. A Person shall
be deemed to control a corporation or other entity if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of such corporation or other entity, whether through
the ownership of voting securities, by contract or otherwise. For purposes of
this Agreement, the Company and the Purchaser shall not be deemed to be
Affiliates of each other.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the
Board of Directors of the Company or a committee of such Board duly
authorized to act for it hereunder.
BUSINESS DAY: The term "Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which the
banking institutions in The City of New York are authorized or obligated by
law or executive order to close or be closed.
CONVERSION PRICE: The term "Conversion Price " shall have the
meaning specified in Section 8.4.
DEFAULT: The term "default" shall mean any event that is, or after
notice or passage of time, or both, would be, an Event of Default.
DESIGNATED SENIOR INDEBTEDNESS: The term "Designated Senior
Indebtedness" shall mean any Senior Indebtedness with an aggregate principal
amount in excess of Fifteen Million Dollars ($15 million) in which the
instrument creating or evidencing the same or the assumption or guarantee
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Senior Indebtedness shall be "Designated Senior
Indebtedness" for purposes of this Agreement (PROVIDED that such instrument,
agreement or other document may place limitations and conditions on the right
of such Senior Indebtedness to exercise the rights of Designated Senior
Indebtedness). If any payment made to any holder of any Designated Senior
Indebtedness or its Representative with respect to such Designated Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the reinstated Indebtedness of the Company arising as a
result of such rescission or return shall constitute Designated Senior
Indebtedness effective as of the date of such recission or return.
EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 9.1(a), (b), (c), (d),(e), (f), (g), (h) or (i).
EXCHANGE ACT: The term "Exchange Act " shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, as in effect from time to time.
INDEBTEDNESS: The term "Indebtedness" shall mean, with respect to
any Person, and without duplication, (a) all indebtedness, obligations and
other liabilities (contingent or otherwise) of such Person for borrowed money
(including obligations of the Company in respect of overdrafts, and any loans
or advances from banks, whether or not evidenced by notes or similar
instruments, and all commitment, standby and other fees due and payable to
financial institutions with respect to credit facilities available to such
Person) or evidenced by bonds, debentures, notes or similar instruments
(whether or not the recourse of the lender is to the whole of the assets of
such Person or to only a portion thereof), other than any account payable or
other accrued current liability or obligation incurred in the ordinary course
of business in connection with the obtaining of materials or services; (b) to
the extent not otherwise included in this definition, net obligation of such
Person under foreign exchange contracts, currency exchange agreements and
interest rate protection agreements, the amount of any such obligations to be
equal at any time to the termination value of such agreement or arrangement
giving rise to such obligation that would be payable by such Person at such
time; (c) all reimbursement obligations and other liabilities (contingent or
otherwise) of such Person with respect to letters of credit, bank guarantees
or bankers' acceptances; (d) all obligations and liabilities (contingent or
otherwise) in respect of leases of real or personal property or other assets
of such Person required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease obligations on the
balance sheet of such Person; (e) all direct or indirect guaranties or
similar agreements by such Person in respect of, and obligations or
liabilities (contingent or otherwise) of such Person to purchase or otherwise
acquire or otherwise assure a creditor against loss in respect of,
indebtedness, obligations or liabilities of another Person of the kind
described in clauses (a) through (d); (f) any indebtedness or other
obligations described in clauses (a) through (e) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held
by such Person, regardless of whether the indebtedness or other obligation
secured thereby shall have been assumed by such Person; and (g) any and all
deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (a) through (f).
LIBOR: The term "LIBOR" shall mean the per annum rate of interest
published from time to time by THE WALL STREET JOURNAL as being the one-month
London Interbank Offered Rate (identified in THE WALL STREET JOURNAL as the
average of interbank offered rates for one-month dollar deposits in the
London market based on quotations of five major banks for contracts entered
into two (2) days prior to the first Business Day of the month in which LIBOR
is to be determined), or if THE WALL STREET JOURNAL shall for any reason
cease or fail to publish a one-month "LIBOR" rate, such other comparable
interest rate index as the Representative shall reasonably designate in
writing to the Company as a substitute therefor. If THE WALL STREET JOURNAL
quotes or publishes more than one such one-month "LIBOR" rate, the highest of
such rate will be used.
LIBOR RATE: The term "LIBOR Rate" shall mean a rate per annum
determined for such month in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):
LIBOR Rate = LIBOR
-------------------------------
1.00 - LIBOR Reserve Percentage
-2-
LIBOR RESERVE REQUIREMENTS: The term "LIBOR Reserve Requirements"
shall mean, for any month, the aggregate (without duplication) of the maximum
rates (expressed as a decimal fraction) of reserve requirements in effect on
the first day of such month (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the
Board of Governors of the Federal Reserve System or other government
authority having jurisdiction with eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of such Board as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof and any successor regulation thereto) maintained by a
member bank of such Federal Reserve System).
MATERIAL ADVERSE EFFECT: The term "Material Adverse Effect" shall
mean (a) a material adverse change in, or a material adverse effect upon, the
operations, business, properties, assets, condition (financial or otherwise)
or prospects of the Company or the Company and its Subsidiaries taken as a
whole; (b) a material impairment of the ability of the Company or any
Subsidiary to perform under this Agreement or the Note and to avoid any Event
of Default; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against the Company or any Subsidiary of
this Agreement or the Note.
PERSON: The term "Person" shall mean a corporation, an association,
a partnership, a limited liability corporation, an individual, a joint
venture, a joint stock company, a trust, an unincorporated organization or a
government or an agency or a political subdivision thereof.
REPRESENTATIVE: The term "Representative" shall mean the (a)
indenture trustee or other trustee, agent or representative for any Senior
Indebtedness or (b) with respect to any Senior Indebtedness that does not
have any such trustee, agent or other representative, (i) in the case of such
Senior Indebtedness issued pursuant to an agreement providing for voting
arrangements as among the holders or owners of such Senior Indebtedness, any
holder or owner of such Senior Indebtedness acting with the consent of the
required Persons necessary to bind such holders or owners of such Senior
Indebtedness and (ii) in the case of all other such Senior Indebtedness, the
holder or owner of such Senior Indebtedness.
SECURITIES ACT: The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.
SENIOR INDEBTEDNESS: The term "Senior Indebtedness " shall mean the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding,
whether or not a claim for post-petition interest is allowable as a claim in
any such proceeding) on or in connection with, and all fees, costs, expenses
and other amounts accrued or due on or in connection with, Indebtedness of
the Company, whether outstanding on the date of this Agreement or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company
(including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to, the foregoing); provided,
however, that Senior Indebtedness will not include:
(a) any Indebtedness which, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is
provided that the obligations in
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respect of such Indebtedness are not superior in right or, or
are subordinate to, payment of the Note;
(b) any obligation of the Company to any Subsidiary;
(c) any liability for Federal, state, foreign, local or other taxes
owed or owing by the Company;
(d) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guaranties
thereof or instruments evidencing such liabilities);
(e) any Indebtedness, guarantee or obligation of the Company that
is expressly subordinate or junior in right of payment to any
other Indebtedness, guarantee or obligation of the Company; or
(f) any capital stock.
SIGNIFICANT SUBSIDIARY: The term "Significant Subsidiary" shall
mean, as of any date of determination, a Subsidiary of the Company that would
constitute a "significant subsidiary" as such term is defined under Rule 1-02
of Regulation S-X of the SEC.
SUBSIDIARY: The term "Subsidiary" shall mean, with respect to any
Person, (i) any corporation, association or other business entity of which
more than fifty percent (50%) of the total voting power of shares of capital
stock entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of
the other subsidiaries of that Person (or a combination thereof) and (ii) any
partnership (a) the sole general partner or managing general partner of which
is such Person or a subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more subsidiaries of such
Person (or any combination thereof).
TRADING DAY: The term "Trading Day" shall have the meaning
specified in Section 8.5(h)(5).
TRIGGER EVENT: The term "Trigger Event" shall have the meaning
specified in Section 8.5(d).
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