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EXHIBIT 4.3
GENZYME CORPORATION
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
------------------
INDENTURE
Dated as of May 22, 1998
------------------
5-1/4% Convertible Subordinated Notes Due 2005
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CROSS-REFERENCE TABLE
Trust Indenture Indenture
Act Section Section
----------- -------
Section 310(a)(1).................................................. 8.10
(a)(2).................................................... 8.10
(a)(3).................................................... N.A.
(a)(4).................................................... N.A.
(a)(5).................................................... N.A.
(b)....................................................... 8.08; 8.10
(c)....................................................... N.A.
Section 311(a)...................................................... 8.11
(b)....................................................... 8.11
(c)....................................................... N.A.
Section 312(a) ..................................................... 2.05
(b)....................................................... 13.03
(c)....................................................... 13.03
Section 313(a)...................................................... 8.06
(b)(1).................................................... N.A.
(b)(2).................................................... 8.06
(c)....................................................... 8.06
(d)....................................................... 8.06
Section 314(a)..................................................... 5.02; 5.03
(b)....................................................... N.A.
(c)(1).................................................... 13.04
(c)(2).................................................... 13.04
(c)(3).................................................... N.A.
(d)....................................................... N.A.
(e)....................................................... 13.05
(f)....................................................... N.A.
Section 315(a)..................................................... 8.01(b)
(b)....................................................... 8.05
(c)....................................................... 8.01(a)
(d)....................................................... 8.01(c)
(e)....................................................... 7.11
Section 316(a)(last sentence)....................................... 2.09
(a)(1)(A)................................................. 7.05
(a)(1)(B)................................................. 7.04
(a)(2).................................................... N.A.
(b)....................................................... 7.07
(c)....................................................... N.A.
Section 317(a)(1)................................................... 7.08
(a)(2).................................................... 7.09
(b)....................................................... 2.04
Section 318(a)..................................................... 13.01
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N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS
Article Section Heading Page
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
1.01. Definitions.............................................. 1
1.02. Other Definitions........................................ 4
1.03. Incorporation by Reference of Trust Indenture Act........ 5
1.04. Rules of Construction.................................... 5
ARTICLE 2. THE SECURITIES
2.01. Form and Dating......................................... 6
2.02. Execution and Authentication............................ 6
2.03. Registrar, Paying Agent, Conversion
Agent, New York Presenting Agent and
Securities Custodian.................................. 7
2.04. Payment on Securities; Paying Agent to
Hold Money in Trust................................... 8
2.05. Securityholder Lists.................................... 9
2.06. Transfer and Exchange................................... 9
2.07. Replacement Securities.................................. 13
2.08. Outstanding Securities.................................. 13
2.09. Treasury Securities..................................... 13
2.10. Temporary Securities.................................... 14
2.11. Cancellation............................................ 14
2.12. Defaulted Interest...................................... 14
2.13. CUSIP Numbers........................................... 14
ARTICLE 3. REDEMPTION
3.01. Notices to Trustee...................................... 15
3.02. Selection of Securities to Be Redeemed.................. 15
3.03. Notice of Redemption.................................... 15
3.04. Effect of Notice of Redemption.......................... 17
3.05. Deposit of Redemption Price............................. 17
3.06. Securities Redeemed in Part............................. 17
ARTICLE 4. REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDERS UPON A FUNDAMENTAL CHANGE
4.01. Repurchase upon Fundamental Change...................... 17
4.02. Notices, Etc............................................ 18
4.03. Exercising Repurchase Right............................. 18
4.04. Certain Definitions..................................... 19
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Article Section Heading Page
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ARTICLE 5. COVENANTS
5.01. Payment of Securities................................... 21
5.02. SEC Reports............................................. 22
5.03. Compliance Certificate.................................. 22
5.04. Corporate Existence..................................... 22
5.05. Notice of Defaults...................................... 23
5.06. Further Instruments and Acts............................ 23
5.07. Resale of Certain Securities; Reporting Issuer.......... 23
5.08. Registration Rights..................................... 23
ARTICLE 6. SUCCESSORS
6.01. When Company May Merge, Etc............................. 25
ARTICLE 7. DEFAULTS AND REMEDIES
7.01. Events of Default....................................... 26
7.02. Acceleration............................................ 27
7.03. Other Remedies.......................................... 28
7.04. Waiver of Past Defaults................................. 28
7.05. Control by Majority..................................... 28
7.06. Limitation on Suits..................................... 29
7.07. Rights of Holders to Receive Payment.................... 29
7.08. Collection Suit by Trustee.............................. 30
7.09. Trustee May File Proofs of Claim........................ 30
7.10. Priorities.............................................. 30
7.11. Undertaking for Costs................................... 31
ARTICLE 8. TRUSTEE
8.01. Duties of Trustee....................................... 31
8.02. Rights of Trustee....................................... 32
8.03. Individual Rights of Trustee............................ 33
8.04. Trustee's Disclaimer.................................... 33
8.05. Notice of Defaults...................................... 33
8.06. Reports by Trustee to Holders........................... 34
8.07. Compensation and Indemnity.............................. 34
8.08. Replacement of Trustee.................................. 35
8.09. Successor Trustee, Agents by Merger, Etc................ 36
8.10. Eligibility; Disqualification........................... 36
8.11. Preferential Collection of Claims Against Company....... 37
ARTICLE 9. DISCHARGE OF INDENTURE
9.01. Termination of Company's Obligations.................... 37
9.02. Application of Trust Money.............................. 38
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Article Section Heading Page
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9.03. Repayment to Company.................................... 38
9.04. Indemnity for Government Obligations.................... 39
9.05. Reinstatement........................................... 39
ARTICLE 10. AMENDMENTS, SUPPLEMENTS AND WAIVERS
10.01. Without Consent of Holders.............................. 39
10.02. With Consent of Holders................................. 40
10.03. Compliance with Trust Indenture Act..................... 41
10.04. Revocation and Effect of Consents....................... 41
10.05. Notation on or Exchange of Securities................... 41
10.06. Trustee to Sign Amendments, Etc......................... 41
ARTICLE 11. CONVERSION
11.01. Conversion Privilege.................................... 42
11.02. Conversion Procedure.................................... 43
11.03. Fractional Shares....................................... 44
11.04. Taxes on Conversion..................................... 44
11.05. Company to Provide Stock................................ 44
11.06. Adjustment for Change in Capital Stock.................. 45
11.07. Adjustment for Rights Issue............................. 45
11.08. Adjustment for Certain Distributions.................... 46
11.09. Adjustment for All Cash Distribution.................... 47
11.10. Adjustment for Tender or Exchange Offer................. 48
11.11. Current Market Price.................................... 50
11.12. When Adjustment May Be Deferred......................... 50
11.13. When No Adjustment Required............................. 50
11.14. Notice of Adjustment.................................... 51
11.15. Voluntary Reduction..................................... 51
11.16. Notice of Certain Transactions.......................... 51
11.17. Provisions in Case of Consolidation,
Merger of the Company or
Transfer or Lease..................................... 52
11.18. Company Determination Final............................. 53
11.19. Trustee's Disclaimer.................................... 53
ARTICLE 12. SUBORDINATION
12.01. Agreement to Subordinate................................ 53
12.02. Certain Definitions..................................... 53
12.03. Liquidation; Dissolution; Bankruptcy.................... 54
12.04. Company Not to Make Payments with
Respect to Securities in Certain
Circumstances......................................... 55
12.05. Acceleration of Securities.............................. 56
12.06. When Distribution Must Be Paid Over..................... 56
12.07. Notice by Company....................................... 56
12.08. Subrogation............................................. 56
12.09. Relative Rights......................................... 56
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Article Section Heading Page
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12.10. Subordination May Not Be Impaired by Company............ 57
12.11. Distribution or Notice to Representative................ 57
12.12. Rights of Trustee and Paying Agent...................... 57
ARTICLE 13. MISCELLANEOUS
13.01. Trust Indenture Act Controls............................ 59
13.02. Notices................................................. 59
13.03. Communications by Holders with Other Holders............ 60
13.04. Certificate and Opinion as to Conditions Precedent...... 60
13.05. Statements Required in Certificate or Opinion........... 60
13.06. Rules by Trustee and Agents............................. 61
13.07. Legal Holidays.......................................... 61
13.08. Governing Law........................................... 61
13.09. No Recourse Against Others.............................. 61
13.10. Successors.............................................. 61
13.11. Counterpart Originals................................... 62
13.12. Severability............................................ 62
SIGNATURES
APPENDIX 1 RULE 144A/REGULATION S APPENDIX
EXHIBIT A - FORM OF GLOBAL SECURITY
EXHIBIT B - FORM OF DEFINITIVE SECURITY
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Note: This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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INDENTURE dated as of May 22, 1998, between GENZYME CORPORATION, a Massachusetts
corporation (the "Company"), and State Street Bank and Trust Company, a
Massachusetts banking corporation (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 5-1/4% Convertible
Subordinated Notes Due 2005 (the "Securities"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Affiliate" means any person, directly or indirectly, controlling or
controlled by or under direct or indirect common control with the Company. For
the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent, New York
Presenting Agent or Co-Registrar.
"Beneficial Holder" means each participant in the Depository who holds
an interest in a Security as indicated in the Participants List (provided,
however, that the Trustee shall be under no duty to make any inquiry regarding
the accuracy of the Participants List).
"Board of Directors" or "Board" means the Board of Directors of the
Company or any duly authorized committee of the Board.
"Company" means the party named as such above. until a successor
replaces it pursuant to the applicable provisions hereof and thereafter means
the successor.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
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"Depository" means, with respect to the Securities issuable or issued
in whole or in part in global form, the person specified in Section 2.03 as the
Depository with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Genzyme General" means Genzyme Corporation's General Division.
"GMO Stock" means shares of the series designated as Genzyme Molecular
Oncology Division Common Stock of the Company.
"GTR Stock" means shares of the series designated as Genzyme Tissue
Repair Division Common Stock of the Company.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Officer" means the Chairman, the President, any Executive or Senior
Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers. See
Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company. See Sections 13.04 and 13.05.
"Over-Allotment Option" means the option granted by the Company to the
Initial Purchasers to purchase up to $25,000,000 aggregate principal amount of
additional Securities pursuant to the Purchase Agreement, dated May 19, 1998,
between such parties.
"Participants List" means the position listings showing persons that
have a beneficial interest in the Securities evidenced by the Security in global
form held by the Depository and the amount of such interest, but only to the
extent that a copy thereof is furnished by the Depository to the Trustee.
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"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof and, for purposes of Article 4, shall have the additional meaning set
forth in Section 4.04(c).
"Quoted Prices" of the GGD Stock means the last sale price regular way
or, in case no such sale takes place on such day, the average of the closing bid
and asked prices regular way, in either case on the New York Stock Exchange
Composite Tape, or, if the GGD Stock is not listed or admitted to trading on
such Exchange, on the national securities exchange in or nearest the City of New
York on which the GGD Stock is listed or admitted to trading, or if the GGD
Stock is not listed or admitted to trading on any national securities exchange,
the last sale price regular way or, in case no such sale takes place on such
day, the average of the highest reported bid and lowest reported asked prices as
furnished by the National Association of Securities Dealers, Inc. through Nasdaq
or a similar organization if Nasdaq is no longer reporting such information, or
if on any such Trading Day the GGD Stock is not quoted by any such organization,
the average of the highest reported bid and lowest reported asked prices as
available in any other over-the-counter market, or if on such Trading Day the
GGD Stock is not reported in any such market, the fair value of a share of GGD
Stock on such day, as determined in good faith by, and evidenced by a resolution
of, the Board of Directors.
"Record Date," for purposes of Section 11.07, has the meaning set forth
in such Section and, for purposes of Section 11.08, has the meaning set forth in
such Section.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued, authenticated
and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means State Street Bank and Trust Company, as
custodian with respect to the Securities in global form, or any successor entity
thereto.
"Subsidiary" means a corporation, a majority of the voting stock of
which is owned, directly or indirectly, by the
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Company or by one or more Subsidiaries, or by the Company and one or more other
Subsidiaries.
"TIA" means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 and as in effect on the date of this Indenture,
except to the extent any amendment to the Trust Indenture Act expressly provides
for application of the Trust Indenture Act as in effect on another date.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday other than any day on which securities are not traded on the principal
exchange or market on which the securities in question are traded.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the party named as such above until a successor
replaces it pursuant to the applicable provisions hereof and thereafter means
the successor.
SECTION 1.02. Other Definitions.
Defined
Term In Section
---- ----------
"Agent Members" ................................................... App. 1
"Bankruptcy Law" .................................................. 7.01
"Capital Stock".................................................... 4.04
"Company Notice" .................................................. 4.02
"Conversion Agent" ................................................ 2.03
"Current Market Price" ............................................ 11.11
"Custodian" ....................................................... 7.01
"Event of Default" ................................................ 7.01
"Exchange Act" .................................................... 4.04
"Expiration Time".................................................. 11.10
"Final Surrender Date" ............................................ 4.03
"Fundamental Change" .............................................. 4.04
"GGD Stock" ....................................................... 11.01
"Global Security".................................................. App. 1
"Initial Purchasers"............................................... App. 1
"Legal Holiday" ................................................... 13.07
"New York Presenting Agent" ....................................... 2.03
"Paying Agent" .................................................... 2.03
"Purchase Agreement"............................................... App. 1
"Purchased Shares" ................................................ 11.10
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"QIB".............................................................. App. 1
"Registrar" ....................................................... 2.03
"Registration Default"............................................. 5.08
"Registration Rights Agreement".................................... App. 1
"Regulation S"..................................................... App. 1
"Representative" .................................................. 12.02
"Repurchase Date" ................................................. 4.03
"Repurchase Price" ................................................ 4.01
"Rule 144A"........................................................ App. 1
"Senior Indebtedness" ............................................. 12.02
"Shelf Registration Statement"..................................... 12.02
"Transfer Restricted Securities"................................... App. 1
"U.S. Government Obligations" ..................................... 9.01
"Voting Shares" ................................................... 4.04
provided, that whenever the definition contained in such section limits its
application to the term as used in specific sections, the foregoing shall not be
deemed to expand the application of such definition to the term as used in any
section other than such specific sections.
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
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(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2.
THE SECURITIES
SECTION 2.01. Form and Dating. Certain provisions relating to the
Securities are set forth in Appendix 1, the Rule 144A/Regulation S Appendix,
attached hereto (the "Appendix"), which is hereby incorporated in and expressly
made part of this Indenture. The Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A with respect to
Securities in global form or Exhibit B with respect to Securities in definitive
form which are hereby incorporated in and expressly made a part of this
Indenture.
In the limited circumstances described herein, the global Security may
be exchanged for definitive certificated Securities substantially in the form of
Exhibit B.
The Securities shall be issued without coupons and only in
denominations of $1,000 or any integral multiple thereof. Payment of principal
of and premium, if any, and interest on any Security in either global or
definitive form shall be made to the Holder thereof.
SECTION 2.02. Execution and Authentication. Two Officers shall sign the
Securities on behalf of the Company by manual or facsimile signature. The
Company's seal shall be reproduced on the Securities.
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If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The Trustee's signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities for original issue in an aggregate principal amount of $225,000,000
upon a Company order without any further action by the Company; provided,
however, that in the event that the Company sells any Securities pursuant to the
Over-Allotment Option, then the Trustee shall authenticate and deliver
Securities for original issue in an aggregate principal amount of $225,000,000
plus up to an additional $25,000,000 aggregate principal amount of the
Securities sold pursuant to the Over-Allotment Option upon a Company order
without any further action by the Company. The aggregate principal amount of the
Securities outstanding at any time may not exceed the amount set forth in the
foregoing sentence, subject to the proviso set forth therein, except as provided
in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so, other than upon original issuance or
pursuant to Section 2.07. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate.
SECTION 2.03. Registrar, Paying Agent, Conversion Agent, New York
Presenting Agent and Securities Custodian. The Company shall maintain an office
or agency where Securities may be presented for registration of transfer or
exchange (the "Registrar"), an office or agency where Securities may be
presented for payment (the "Paying Agent") and an office or agency where
Securities may be presented for conversion (the "Conversion Agent"). The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may appoint one or more Co-Registrars, one or more
additional Paying Agents and one or more additional Conversion Agents. The
Company may act as Registrar, Paying Agent, Conversion Agent or Co-Registrar.
The term "Paying Agent" includes any additional paying agent; the term
"Conversion Agent" includes any additional conversion agent. The Company shall
notify the
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Trustee of the name and address of any Agent not a party to this Indenture and
shall give the Trustee at least thirty days' notice prior to changing the
Registrar, Paying Agent or Conversion Agent. If the Company fails to maintain a
Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such. The
Company initially appoints the Trustee as Paying Agent, Registrar and Conversion
Agent.
If there is not at least one of each such Registrar or Co-Registrar,
Paying Agent and Conversion Agent located in the Borough of Manhattan, the City
of New York, the Company shall also maintain an office in the Borough of
Manhattan, the City of New York where the securities may be presented for
purposes of transfer and exchange, payment and conversion (the "New York
Presenting Agent"). The Company initially appoints State Street Bank and Trust
Company, having an office at 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to serve as
New York Presenting Agent.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Securities in global form.
The Company initially appoints State Street Bank and Trust Company to
act as Securities Custodian with respect to the Securities in global form.
SECTION 2.04. Payment on Securities; Paying Agent to Hold Money in
Trust. (a) Subject to the following provisions, no later than 11:00 a.m. on the
due date of principal of and premium, if any, and interest on the Securities,
the Company will pay to the Paying Agent in immediately available funds the
amounts, in money of the United States that at the time of payment is legal
tender for payment of public or private debts, in the manner, at the times and
for the purposes set forth herein and in the text of the Securities, and the
Company hereby authorizes and directs the Paying Agent from funds so paid to it
to make or cause to be made payment of the principal of and premium, if any, and
interest on the Securities set forth herein and in the text of the Securities.
The Paying Agent will make payment, from the funds furnished by the Company, of
the principal of and premium, if any, and interest on the Securities by check
drawn upon a bank in the city in which the Paying Agent's principal office is
located, or make payment by wire transfer upon terms acceptable to the Paying
Agent.
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(b) Interest on a Security (other than defaulted interest) shall be
paid on each interest payment date to the Holder thereof at the close of
business on the relevant record date specified in the Securities. Principal of
and premium, if any, on Securities shall be payable only against presentation
and surrender thereof at the principal office of the Paying Agent, unless the
Company shall have otherwise instructed the Trustee in writing.
(c) The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or premium, if any, or interest on the Securities, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. If the Company acts as Paying
Agent, it shall segregate the money held by it for the payment of principal of
and premium, if any, and interest on the Securities and hold it as a separate
trust fund. The Company shall provide ten days prior written notice to the
Trustee that it is to act as Paying Agent with respect to such payment and the
Trustee may rely on such notice. The Company at any time may require a Paying
Agent to pay all money held by the Paying Agent to the Trustee. Upon doing so
the Paying Agent shall have no further liability for the money so paid.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee not less than five days
prior to each interest payment date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. (a) The transfer and exchange of
Securities in global form shall be effected through the Depository, in
accordance with this Indenture and the procedures of the Depository therefor.
When definitive Securities are presented to the Registrar with a request to
register the transfer of such definitive Securities or to exchange such
definitive Securities for an equal principal amount of definitive Securities of
other authorized denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such
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transaction are met; provided, however, that the definitive Securities
surrendered for transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his attorney, duly authorized
in writing; provided, further, that, with respect to any Securities offered and
sold in reliance on the provisions of Regulation S under the Securities Act, the
Registrar shall not register the transfer nor make the exchange of any such
Securities surrendered for transfer or exchange, respectively, other than in
accordance with the provisions of Regulation S under the Securities Act,
pursuant to registration under the Securities Act or pursuant to an available
exemption from registration.
To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee (or an authenticating agent appointed pursuant to
Section 2.02) shall authenticate and deliver definitive Securities at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or other governmental charge payable in connection with
any registration of transfer or exchange (other than any such transfer taxes or
similar governmental charge payable upon exchanges or transfers pursuant to
Sections 2.10, 3.06, 4.03, 10.05 or 11.02). The Registrar shall not be required
to register the transfer of or exchange any definitive Security selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
(b) Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in subsection (c) of this Section), a Security in
global form may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(c) In the event that a Global Security is exchanged for Securities in
definitive registered form pursuant to Xxx-
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tion 2.4 of Appendix 1 or Section 2.10 of the Indenture, prior to the
effectiveness of a Shelf Registration Statement with respect to such Securities,
such Securities may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section 2.06 (including the
certification requirements set forth on the reverse of the Securities intended
to ensure that such transfers comply with Rule 144A or Regulation S, as the case
may be) and such other procedures as may from time to time be adopted by the
Company.
(d) If at any time the Depository for the Securities notifies the
Company that it is unwilling or unable to continue as Depository for the
Securities, the Company may appoint a successor Depository with respect to the
Securities. If a successor Depository for the Securities is not appointed by the
Company within 90 days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of definitive Securities, will authenticate and
deliver, Securities in definitive form, in an aggregate principal amount equal
to the principal amount of the Securities in global form, in exchange for such
Securities in global form.
The Company may at any time and in its sole discretion determine that
the Securities issued in the form of global Securities shall no longer be
represented by such global Securities. In such event the Company will execute,
and the Trustee, upon receipt of an Officers' Certificate for the authentication
and delivery of definitive Securities, will authenticate and deliver, Securities
in definitive form in an aggregate principal amount equal to the principal
amount of the Securities in global form, in exchange for such Securities in
global form.
If a definitive Security is issued in exchange for any portion of a
global Security after the close of business at the office or agency where such
exchange occurs on any record date and before the opening of business at such
office or agency on the next succeeding interest payment date, interest will not
be payable on such interest payment date in respect of such definitive Security,
but will be payable on such interest payment date only to the person to whom
interest in respect of such portion of such global Security is payable in
accordance with the provisions of this Indenture.
Definitive Securities issued in exchange for a Security in global form
pursuant to this Section 2.06 shall be registered in such names and in such
authorized denominations as
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the Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. Upon execution and
authentication, the Trustee shall deliver such definitive Securities to the
Persons in whose names such Securities are so registered.
(e) A definitive Security may not be exchanged by the Holder for a
beneficial interest in Securities in global form except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a definitive
Security, duly endorsed or accompanied by appropriate instruments of exchange or
transfer, as the case may be, in form satisfactory to the Trustee, together with
(i) certification in the form set forth on the reverse of the Security that such
definitive Security is being transferred to a QIB in accordance with Rule 144A
and (ii) written instructions directing the Trustee to make, or to direct the
Securities Custodian to make, an adjustment on its books and records with
respect to such global Security to reflect an increase in the aggregate
principal amount of Securities represented thereby, such instructions to include
information regarding the Depository account to be credited with such increase,
unless the Company shall no longer maintain global securities, then the Trustee
shall cancel such definitive Security and cause, or direct the Securities
Custodian to cause, in accordance with the standing instructions and procedures
existing between the Depository and the Securities Custodian, the aggregate
principal amount of Securities represented by the Security in global form to be
increased accordingly.
(f) At such time as all interests in a Security in global form have
either been exchanged for definitive Securities, redeemed, converted,
repurchased or cancelled, such Security in global form shall be cancelled by the
Trustee in accordance with the standing procedures and instructions existing
between the Depository and the Securities Custodian. At any time prior to such
cancellation, if any interest in a global Security is exchanged for definitive
Securities, redeemed, converted, repurchased or cancelled, the principal amount
of Securities represented by such Security in global form shall, in accordance
with the standing procedures and instructions existing between the Depository
and the Securities Custodian, be reduced and an endorsement shall be made on
such Security in global form, by the Trustee or the Securities Custodian, at the
direction of the Trustee, to reflect such reduction.
Neither the Company nor the Registrar shall be required (i) to issue,
register the transfer of or exchange Securities during a period beginning at the
opening of business fifteen days before the day of any selection of Securities
for redemption under Section 3.02 and ending at the close of business
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on the day of selection, or (ii) to register the transfer or exchange of any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 2.07. Replacement Securities. If the Holder of a Security
claims that the Security has been lost, destroyed or wrongfully taken, or if a
mutilated Security is surrendered to the Trustee, the Company shall issue and
the Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If an indemnity bond is required by the Trustee or the
Company, such bond must be sufficient, in the judgment of both the Trustee and
the Company, to protect the Company, the Trustee, any Agent or any
authenticating agent from any loss which any of them may suffer if a Security is
replaced. The Company may charge for its expenses incurred in replacing a
Security.
Every replacement Security shall be an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. The Securities outstanding at any
time are all Securities authenticated by the Trustee (or an authenticating agent
appointed pursuant to Section 2.02) except for those cancelled by the Trustee,
those delivered to the Trustee for cancellation, those reductions in the
interests in a global Security effected by the Trustee hereunder, and those
described in this Section as not outstanding.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 5.01, they cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities. In determining whether the Holders
of the required principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or an Affiliate shall be
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disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and execute and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Every temporary Security shall
be executed by the Company and authenticated by the Trustee, and registered by
the Registrar, upon the conditions, and with like effect, as a definitive
Security. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Securities in exchange for temporary Securities.
SECTION 2.11. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar, Paying Agent and
Conversion Agent shall promptly forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange, payment or
conversion. The Trustee shall cancel all Securities surrendered for registration
of transfer, exchange, payment, conversion or cancellation and may destroy
cancelled Securities and deliver a certificate of such destruction to the
Company, unless the Company directs the Trustee to deliver cancelled Securities
to the Company. The Company may not issue new Securities to replace Securities
that it has paid or delivered to the Trustee for cancellation or that any
Securityholder has converted pursuant to Article 11.
SECTION 2.12. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, it shall pay the defaulted interest in any lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities are listed. It may pay the defaulted interest, plus any
interest payable on the defaulted interest, to the Persons who are
Securityholders on a subsequent special record date. The Company shall fix the
record date and payment date for the payment of any defaulted interest. At least
15 days before the record date, the Company shall mail to each Securityholder
and the Trustee a notice that states the record date, payment date and amount of
interest to be paid.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in
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use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption
as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.
ARTICLE 3.
REDEMPTION
SECTION 3.01. Notices to Trustee. If the Company wishes to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee of the redemption date and the principal amount of Securities to be
redeemed at least 45 days before the redemption date.
SECTION 3.02. Selection of Securities to Be Redeemed. If less than all
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed by lot, or in its discretion, on a pro rata basis from Securities
outstanding and not previously called for redemption (unless the Company
specifically directs the Trustee otherwise), in such manner as the Trustee shall
deem fair and appropriate. The Trustee shall make the selection (and provide the
Company with written notice of such selection) at least 30 days but not more
than 60 days before the redemption date. Securities and portions of them the
Trustee selects for redemption shall be in amounts of $1,000 or integral
multiples of $1,000. In the event that the Trustee is not the Registrar, the
Registrar shall provide to the Trustee such information as the Trustee may
reasonably request to implement the selection. Provisions of this Indenture that
apply to Securities called for redemption also apply to portions of Securities
called for redemption.
SECTION 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a redemption date, the Company shall mail a notice of redemption
to the Trustee and each Holder whose Securities are to be redeemed.
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The notice shall identify the Securities (including CUSIP numbers, if
any) to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the conversion price;
(4) the name and address of the Paying Agent and Conversion
Agent;
(5) that Securities called for redemption may be converted at
any time before the close of business on the business day immediately
preceding the redemption date;
(6) that Holders who want to convert Securities must satisfy
the requirements set forth in paragraph 8 of the Securities;
(7) that Securities called for redemption must be surrendered
to the Paying Agent in order to collect the redemption price;
(8) that interest on Securities called for redemption ceases
to accrue on and after the redemption date (unless funds in the
requisite amount are not paid or made available for payment on that
date), and the amount of interest accrued on the Securities called for
redemption up to but not including the redemption date;
(9) if less than all of any Security is to be redeemed, the
principal amount of such Security to be redeemed;
(10) the CUSIP number, if any, printed on the Securities being
redeemed; and
(11) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
Upon ten days prior notice to the Trustee, the Company may request that
the Trustee mail the notice of redemption (prepared by the Company) in the
Company's name and at its expense.
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SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption
is mailed, Securities called for redemption, unless theretofore converted into
GGD Stock pursuant to the terms of this Indenture, shall become due and payable
on the redemption date at the redemption price. Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price, plus accrued
interest to the redemption date; provided, however, that any regular semi-annual
payment of interest becoming due on the redemption date shall be payable to the
Holder of any such Security as provided in paragraph 2 of the Securities.
SECTION 3.05. Deposit of Redemption Price. No later than 11:00 a.m. on
the redemption date, the Company shall deposit in immediately available funds
with the Paying Agent money sufficient to pay the redemption price of and
interest accrued to the redemption date on all Securities to be redeemed on that
date other than Securities or portions thereof called for redemption on that
date which have been delivered by the Company to the Trustee for cancellation.
The Paying Agent shall return to the Company any money not required for that
purpose because of conversion of Securities.
SECTION 3.06. Securities Redeemed in Part. Upon surrender to the
Trustee of a Security that is redeemed in part, the Company shall execute and
the Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE 4.
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDERS UPON A FUNDAMENTAL CHANGE
SECTION 4.01. Repurchase upon Fundamental Change. The Company covenants
and agrees that, in the event that there occurs a Fundamental Change (as defined
in Section 4.04(d) hereof), each Holder will have the right, at such Holder's
option, to require the Company to repurchase all, or any portion that is an
integral multiple of $1,000, of such Holder's Securities on the Repurchase Date
(as defined in Section 4.03 below) selected as provided below at a repurchase
price (the "Repurchase Price") which is equal to 100% of the principal amount of
such Securities plus accrued interest to the Repurchase Date.
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SECTION 4.02. Notices, Etc. Unless the Company shall have theretofore
called for redemption all the outstanding Securities, on or before the 30th day
after the occurrence of a Fundamental Change, the Company shall deliver to the
Trustee, and the Company shall, or, if so requested by the Company upon ten
days' prior written notice, the Trustee shall, in the name of the Company and at
its expense, mail to each Holder at such Holder's address appearing in the
Securities Register a written notice (the "Company Notice") describing the
occurrence of the Fundamental Change and of the repurchase right set forth
herein arising as a result thereof, as well as stating the final date by which
the Securities must be surrendered for repurchase, the conversion price then in
effect, the Repurchase Date, the Repurchase Price and the procedure which the
Holder must follow to elect repurchase. The Company shall also cause a copy of
such notice of the repurchase right to be published in a newspaper of general
circulation in the Borough of Manhattan, The City of New York.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
SECTION 4.03. Exercising Repurchase Right. (a) To elect repurchase of
any Securities or portion thereof, the Holder will be required to surrender, on
or before the Final Surrender Date (as defined below), (i) in the case of global
Securities, to the Conversion Agent by book-entry delivery of the interest in
the Security in global form to be repurchased, or (ii) in the case of definitive
Securities, at any place where principal is payable, such Security duly endorsed
or assigned to the Company or in blank, in any event together with written
notice of the Holder's election to have the Company repurchase all or any $1,000
portion of such Security specified in such notice. Election of repurchase by a
Holder shall be irrevocable (unless the Company defaults in payment of the
repurchase price for the Securities on the repurchase date) and the right to
convert the Securities as to which such Holder has made such election shall
expire when such Securities are so surrendered (unless the Company defaults in
payment of the repurchase price for the Securities on the repurchase date and
such election is revoked). "Final Surrender Date" shall mean the date which is,
subject to any contrary requirements of applicable law, 60 days after the date
of mailing of the Company Notice. "Repurchase Date" shall mean the date selected
by the Company for the repurchase of the Securities that is not
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less than 10 and not more than 30 days after the Final Surrender Date.
(b) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid the Repurchase
Price in cash to the Holder on the Repurchase Date; provided, however, that
installments of interest that mature on or prior to the Repurchase Date shall be
payable in cash to the Holders of such Securities, registered as such at the
close of business on the relevant record date specified in the Securities
according to the terms and provisions of Article 2.
(c) If any Security surrendered for repurchase shall not be so paid on
the Repurchase Date, the principal amount which is payable at maturity shall,
until the Repurchase Price (as calculated at the date of payment) is paid,
continue to bear interest from the Repurchase Date at the rate borne by the
Security and each such Security shall continue to remain convertible into Common
Stock until said Repurchase Price shall have been paid to the Holder or duly
provided for by deposit with the Paying Agent in immediately available funds
without restriction.
(d) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Security so surrendered.
SECTION 4.04. Certain Definitions. For purposes of this Article:
(a) The term "Capital Stock" shall mean capital stock of the
Company that does not rank prior, as to the payment of dividends or as
to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, to shares of
capital stock of any other class of the Company;
(b) The term "Fundamental Change" shall mean any of the
following:
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(i) a "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")),
becoming the "beneficial owner" (as defined in Rule l3d-3
under the Exchange Act) of Voting Shares (as defined below) of
the Company entitled to exercise more than 50% of the total
voting power of all outstanding Voting Shares of the Company
(including any right to acquire Voting Shares that are not
then outstanding of which such person or group is deemed the
beneficial owner); or
(ii) a change in the Board of Directors in
which the individuals who constituted the Board of Directors
at the beginning of the two-year period immediately preceding
such change (together with any other director whose election
by the Board of Directors or whose nomination for election by
the shareholders of the Company was approved by a vote of at
least two-thirds of the directors then in office who either
were directors at the beginning of such period or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
directors then in office; or
(iii) any consolidation of the Company with,
or merger of the Company into, any other Person, any merger of
another Person into the Company, or any sale or transfer of
all or substantially all of the assets of the Company to
another Person (other than (x) a merger which does not result
in any reclassification, conversion, exchange or cancellation
of outstanding shares of GGD Stock, (y) a merger which is
effected solely to change the jurisdiction of incorporation of
the Company or (z) any consolidation with or merger of the
Company into a wholly-owned subsidiary of the Company, or any
sale or transfer by the Company of all or substantially all of
its assets to one or more of its wholly-owned subsidiaries, in
any one transaction or a series of transactions, provided, in
any such case, that the resulting corporation or each such
subsidiary assumes or guarantees the Company's obligations
under the Securities); provided, however, that a Fundamental
Change shall not occur with respect to any such transaction if
either (i) the last sale price of the GGD Stock for any five
Trading Days during the ten Trading Days immediately preceding
the public announcement by the Company of
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such transaction is at least equal to 105% of the conversion
price in effect on such Trading Day or (ii) the consideration
in such transaction to the holders of GGD Stock consists of
cash, securities that are, or immediately upon issuance will
be, listed on a national securities exchange or quoted on the
Nasdaq National Market, or a combination of cash and such
securities, and the aggregate fair market value of such
consideration (which, in the case of such securities, shall be
equal to the average of the last sale prices of such
securities during the ten consecutive Trading Days commencing
with the sixth Trading Day following consummation of the
transaction) is at least 105% of the conversion price in
effect on the date immediately preceding the closing date of
such transaction;
(c) The term "Person" shall include any syndicate or group
which would be deemed to be a "person" under Section 13(d)(3) of the
Exchange Act as in effect on the date of the original execution of this
Indenture; and
(d) The term "Voting Shares" shall mean all outstanding shares
of any class or series (however designated) of Capital Stock entitled
to vote generally in the election of members of the Board of Directors
and includes, without limitation, the GGD Stock, the GTR Stock and the
GMO Stock.
ARTICLE 5.
COVENANTS
SECTION 5.01. Payment of Securities. The Company shall pay the
principal of and premium, if any, and interest on, and Repurchase Price, if any,
of the Securities on the dates and in the manner provided in the Securities and
this Indenture. Principal, premium, if any, Repurchase Price, if any, and
interest shall be considered paid on the date due if the Paying Agent (other
than the Company) holds on that date money sufficient to pay all principal,
premium, if any, and interest then due and that is immediately available on such
date for payment to the Holders and that is not subject to restriction
including, but not limited to, the restrictions set forth in Article 12 hereof.
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The Company shall pay interest on overdue principal and premium, if
any, at the rate per annum borne by the Securities; it shall pay interest on
overdue installments of interest at the same rate per annum to the extent
lawful.
SECTION 5.02. SEC Reports. The Company shall file with the Trustee
within 15 days after the Company is required to file them with the SEC copies of
the annual reports and the information, documents and other reports (or copies
of such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act (as defined in Section 4.04).
Notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall file with the SEC (unless the SEC will not accept such a filing) and
provide the Trustee and Securityholders with the annual reports and the
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to such
Sections, such information, documents and other reports to be so filed and
provided at the times specified for the filing of such information, documents
and reports under such Sections. The Company also shall comply with the other
provisions of TIA Section 314(a).
SECTION 5.03. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For purposes
of this Section 5.03, such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Indenture. The
first certificate pursuant to this Section shall be for the year ending on
December 31, 1998.
SECTION 5.04. Corporate Existence. Subject to Article 6, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights (charter and statutory) and
franchise; provided, however, that the Company shall not be required to preserve
any such right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the
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Company and that the loss thereof is not disadvantageous in any material respect
to the Holders.
SECTION 5.05. Notice of Defaults. In the event that the Company fails
to make any payment in an amount in excess of $20,000,000 when due, after any
applicable grace period, in respect of indebtedness for borrowed money of the
Company or if indebtedness for borrowed money of the Company in an amount in
excess of $20,000,000 is accelerated because of the occurrence of any default
under such indebtedness, the Company will promptly give written notice to the
Trustee of such failure or acceleration, as the case may be, or of the
occurrence of an event which, with the giving of notice or the passage of time,
or both, would entitle the holder or holders of such indebtedness to declare
such indebtedness due and payable before its maturity.
SECTION 5.06. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 5.07. Resale of Certain Securities. During the period beginning
on the last date of original issuance of the Securities and ending on the date
that is two years from such date, the Company will not, and will use its best
efforts not to permit any of its "affiliates" (as defined under Rule 144 under
the Securities Act or any successor provision thereto) to, resell (x) any
Securities which constitute "restricted securities" under Rule 144 or (y) any
securities into which the Securities have been converted under this Indenture
which constitute "restricted securities" under Rule 144, that in either case
have been reacquired by any of them. The Trustee shall have no responsibility in
respect of the Company's performance of its agreement in the preceding sentence.
SECTION 5.08. Registration Rights. The Company agrees that the Holders
(and any Person that has a beneficial interest in a Security) from time to time
of Transfer Restricted Securities are entitled to the benefits of the
Registration Rights Agreement executed by the Company. Pursuant to the
Registration Rights Agreement the Company will, at its cost, (a) use its
reasonable best efforts to file within 60 days after the first date of original
issuance of the Securities a Registration Statement on Form S-3 (a "Shelf
Registration Statement") covering resales of the Securities and
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the GGD Stock issuable upon the conversion pursuant to Rule 415 under the
Securities Act, (b) use its reasonable best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act no
later than 120 days after the first date of original issuance of the Securities
and (c) use its reasonable best efforts to keep the Shelf Registration Statement
effective after its effective date until the date which is the earliest of (i)
the second anniversary of the effective date of the Shelf Registration
Statement, (ii) such time as all the Securities or GGD Stock issuable upon
conversion thereof (the "Registrable Securities") have been sold pursuant to the
Shelf Registration Statement, transferred pursuant to Rule 144 under the
Securities Act or otherwise transferred in a manner that results in such
securities not being subject to transfer restrictions under the Securities Act
and the absence of a need for a restrictive legend regarding registration under
the Securities Act, and (iii) such time as all of the Registrable Securities
held by non-affiliates of the Company are eligible for sale pursuant to Rule
144(k) under the Securities Act or any successor rule or regulation thereto. The
Company will, in the event a Shelf Registration Statement is filed, among other
things, provide to each Holder from whom such Shelf Registration Statement was
filed copies of the prospectus which is a part of the Shelf Registration
Statement, notify each such Holder when the Shelf Registration Statement has
become effective, and take certain other actions as are required to permit
unrestricted resales of the Securities and the GGD Stock issuable upon the
conversion thereof by such Holders to third parties.
If (i) on or prior to the 60th day after the first date of original
issuance of the Securities, the Shelf Registration Statement has not been filed
with the Commission; (ii) on or prior to the 120th day after the first date of
original issuance of the Securities, the Shelf Registration Statement has not
been declared effective by the Commission; or (iii) after the Shelf Registration
Statement has been declared effective, such Shelf Registration Statement ceases
to be effective or usable (subject to certain exceptions described in the
Registration Rights Agreement) in connection with resales of Securities and the
GGD Stock issuable upon the conversion thereof in accordance with and during the
periods specified in the Registration Rights Agreement (each such event referred
to in clauses (i) through (iii), a "Registration Default"), additional interest
will accrue on the Securities over and above the rate set forth in the title of
the Securities, from and including the date on which any such Registration
Default shall occur to but excluding the date on which all Registration De-
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faults have been cured, at the rate of 0.25% per annum for a Registration
Default pursuant to clause (i) above, and at a rate of 0.5% per annum for a
Registration Default pursuant to clauses (ii) and (iii). The Company will have
no other liabilities for monetary damages with respect to its registration
obligations; provided, however, that in the event the Company breaches, fails to
comply with or violates certain provisions of the Registration Rights Agreement,
the Holders shall be entitled to, and the Company shall not oppose the granting
of, equitable relief, including injunction and specific performance.
ARTICLE 6.
SUCCESSORS
SECTION 6.01. When Company May Merge, Etc. The Company shall not
consolidate or merge with or into, or sell, lease, convey or otherwise dispose
of all or substantially all of its assets to, any Person unless:
(1) the Company is the surviving person or that Person is a
corporation organized under the laws of the United States, any state
thereof or the District of Columbia or a corporation or comparable
legal entity organized under the laws of a foreign jurisdiction and
whose equity securities are listed on a national securities exchange in
the United States or authorized for quotation on the Nasdaq National
Market;
(2) that Person assumes by supplemental indenture executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities and this Indenture,
except that it need not assume the obligations of the Company as to
conversion of Securities if pursuant to Section 11.15 the Company or
another Person enters into a supplemental indenture obligating it to
deliver securities, cash or other assets upon conversion of Securities;
(3) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stat-
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ing that such consolidation, merger, transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for related to such transaction have been
complied with.
The surviving, transferee or lessee corporation shall be the successor
Company, but the predecessor Company in the case of a transfer or lease shall
not be released from the obligation to pay the principal amount or Repurchase
Price of and premium, if any, and interest on the Securities.
ARTICLE 7.
DEFAULTS AND REMEDIES
SECTION 7.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest (including
additional interest as provided in Section 5.08) on any Security when
the same becomes due and payable and the Default continues uncured for
a period of 30 days, whether or not such payment is prohibited or
restricted by the provisions of Article 12;
(2) the Company defaults in the payment of (A) principal of or
premium, if any, on any Security when the same becomes due and payable,
whether at maturity, upon redemption or otherwise, or (B) the
Repurchase Price in respect of any Security when due, in either case
whether or not such payment is prohibited or restricted by the
provisions of Article 12;
(3) the Company fails to comply with any of its other
covenants or agreements set forth in this Indenture and the Default
continues for the period and after the notice specified below;
(4) the Company fails to make any payment when due, including
any applicable grace period, in respect of indebtedness for borrowed
money of the Company, which payment is in an amount in excess of
$20,000,000, or the Company defaults with respect to any indebtedness
for borrowed money of the Company, which default results in
acceleration of any such indebtedness which is in an amount of in
excess of $20,000,000;
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(5) the Company pursuant to or within the meaning of any
Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian (as
defined below) of it or for all or substantially all of its
property; or
(D) makes a general assignment for the benefit of its
creditors; or
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case;
(B) appoints a Custodian of the Company or for all or
substantially all of its property; or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90
consecutive days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
A Default under clause (3) above is not an Event of Default until the
Trustee or, subject to Section 2.09, the Holders of at least 25% in principal
amount of the Securities notify the Company in writing of the Default and the
Company does not cure the Default within 60 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default". When a Default is cured, it ceases to
exist.
SECTION 7.02. Acceleration. If any Event of Default described in
Section 7.01(1) through (4) occurs and is continuing, the Trustee, by written
notice to the Company, or, subject to Section 2.09, the Holders of at least 25%
in aggregate principal amount of the outstanding Securities, by
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written notice to the Company and the Trustee, may declare the principal of and
accrued interest on all Securities to be due and payable. Upon such declaration
such principal and interest shall be due and payable immediately. If any Event
of Default described in Section 7.01(5) or (6) occurs the principal of and
accrued interest on all Securities shall automatically become due and payable,
without any action required of the Trustee or the Holders. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
rescind an acceleration and its consequences if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration, if the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction, and
if all payments (including fees and expenses) due to the Trustee have been paid.
SECTION 7.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal or the Repurchase Price of or premium, if any, or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. To the extent
permitted by law. no remedy is exclusive of any other remedy and all remedies
are cumulative.
SECTION 7.04. Waiver of Past Defaults. Subject to Section 2.09, the
Holders of a majority in aggregate principal amount of the Securities by written
notice to the Trustee may waive an existing Default and its consequences except
a Default in the payment of the principal of or premium, if any, or interest on
any Security or a Default under Article 11. When a Default is waived, it is
cured and ceases to exist. This Section 7.04 shall be in lieu of TIA Section
316(a)(1)(B), and TIA Section 316(a)(1)(B) is hereby expressly excluded from
this Indenture and Section, as permitted by the TIA.
SECTION 7.05. Control by Majority. Subject to Section 2.09, the Holders
of a majority in aggregate principal amount of the Securities may direct the
time, method and place of conducting any proceeding for any remedy available to
the
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Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture, is
unduly prejudicial to the rights of another Securityholder, or would expose the
Trustee to liability or expense for which it has not been offered reasonably
satisfactory indemnity. This Section 7.05 shall be in lieu of TIA Section
316(a)(1)(A), and TIA Section 316(a)(1)(A) is hereby expressly excluded from
this Indenture and Section, as permitted by the TIA.
SECTION 7.06. Limitation on Suits. A Securityholder may pursue any
remedy with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense to
be, or which may be, incurred by the Trustee in pursuing the remedy;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the Securities do not give the Trustee a direction
inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 7.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal of and premium, if any, and interest on the Security on or after
the respective due dates expressed in the Security, and to convert such Security
in accordance with Article 11, or to bring suit for the enforcement of any such
payment on or after such respective due dates and such right to convert, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
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SECTION 7.08. Collection Suit by Trustee. If an Event of Default
specified in Section 7.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as Trustee of an express trust against the
Company for the whole amount of principal, premium, if any, Repurchase Price, if
any, and interest remaining unpaid together with interest on overdue principal
and premium, if any, and on the principal amount of any Security for which the
Repurchase Price is overdue, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
per annum set forth in the title of the Securities.
SECTION 7.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceeding relative to the Company, its creditors or its
property.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceedings.
SECTION 7.10. Priorities. If the Trustee collects any money or property
pursuant to this Article 7, it shall pay out the money or property in the
following order:
First: to the Trustee for amounts due under Section 8.07 or
any other provision of this Indenture;
Second: to holders of Senior Indebtedness to the extent
required by Article 12;
Third: to Securityholders for amounts due and unpaid on the
Securities for principal, premium, if any, Repurchase Price, if any,
and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for
principal, premium, if any, Repurchase Price, if any, and interest,
respectively; and
Fourth: to the Company.
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The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 7.10.
SECTION 7.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 7.07, or a suit by a Holder or
Holders of more than 10% in aggregate principal amount of the Securities then
outstanding.
ARTICLE 8.
TRUSTEE
SECTION 8.01. Duties of Trustee. (a) If to the knowledge of the Trustee
an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture, but need not verify the accuracy of the contents
thereof.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 7.05; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law and need not be invested except as agreed to by the Trustee.
SECTION 8.02. Rights of Trustee. Subject to Section 8.01:
(a) the Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document;
(b) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action
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it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel;
(c) the Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care;
(d) the Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers;
(e) the Trustee may consult with counsel reasonably acceptable
to the Trustee, which may be counsel to the Company, and the advice of
such counsel as to matters of law shall be full and complete
authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel;
(f) The Trustee shall not be bound to ascertain or inquire as
to the performance or observance of any covenants, conditions or
agreements on the part of the Company under this Indenture; but the
Trustee may require of the Company full information and advice as to
the performance of the covenants, conditions and agreements aforesaid;
and
(g) the Trustee shall not be required to give any bond or
surety in respect of the execution of its trusts and powers or in
respect of this Indenture.
SECTION 8.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or an Affiliate with the same rights the
Trustee would have if it were not Trustee. Any Agent may do the same with like
rights.
SECTION 8.04. Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, shall not be
accountable for the Company's use of the proceeds from the sale of the
Securities or the use or application of any money received by any Paying Agent
other than the Trustee, and shall not be responsible for any statement in the
Securities other than the Trustee's certificate of authentication.
SECTION 8.05. Notice of Defaults. If a Default occurs and is continuing
and if it is known to the Trustee, the
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Trustee shall mail to each Securityholder, at the name and address which appear
in the Securities Register, a notice of the Default within 90 days after the
Default occurs. Except in the case of a Default in payment of the principal of
or premium, if any, or interest on any Security, the Trustee may withhold the
notice if and so long as its board of directors, the executive committee, or a
trust committee of its directors and/or responsible officers in good faith
determines that withholding the notice is in the interests of Securityholders.
The Trustee shall not be deemed to have notice of any Default or Event of
Default other than as described in clauses (1) or (2) of Section 7.01 unless it
shall have received written notice thereof from the Company or any
Securityholder, or a Trust Officer has actual knowledge thereof. The foregoing
sentence of this Section 8.05 shall be in lieu of the proviso to TIA Section
315(b), and such proviso to TIA Section 315(b) is hereby expressly excluded from
this Indenture and Section, as permitted by the TIA.
SECTION 8.06. Reports by Trustee to Holders. If required by TIA Section
313(a), within 60 days after each April 1 beginning with the April 1 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
report dated as of such April 1 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b), (c) and (d).
A copy of each such report at the time of its mailing to
Securityholders shall also be mailed to the Company and shall be filed with the
SEC and each stock exchange, if any, on which the Securities are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 8.07. Compensation and Indemnity. The Company shall from time
to time pay to the Trustee reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee, within 45
days after receiving request therefor, for all reasonable out-of-pocket
disbursements, fees and expenses incurred by the Trustee in connection with the
performance of its duties under this Indenture, including without limitation
those incurred in connection with the enforcement of any remedy hereunder or the
interpretation of any provision hereunder.
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Such expenses may include the reasonable compensation and out-of-pocket expenses
of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability incurred by it in connection with this Indenture.
The Trustee shall promptly notify the Company of any claim for which the Trustee
may seek indemnity, including costs and expenses of defending itself against any
claim for liability arising from the exercise or performance of any of its
powers or duties hereunder.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of,
premium, if any, and interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.01(5) or (6) occurs, the expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
Notwithstanding any provision hereof to the contrary, the Trustee's
lien shall not be subordinated to that of Senior Indebtedness.
SECTION 8.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
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(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any Securityholder or
Beneficial Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to the lien provided for in Section 8.07), the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders.
SECTION 8.09. Successor Trustee, Agents by Merger, Etc. If the Trustee
or any Agent consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee or
Agent, as the case may be.
SECTION 8.10. Eligibility; Disqualification. This Indenture shall
always have a Trustee who satisfies the requirement of TIA Sections
310(a)(1) and 310(a)(5). The Trustee (or in the case of a corporation included
in a bank holding company system, the related bank holding company) shall have a
combined
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capital and surplus of at least $100,000,000 as set forth in its most recent
published annual report of condition. In addition, if the Trustee is a
corporation included in a bank holding company system, the Trustee,
independently of such bank holding company, shall meet the capital requirements
of TIA Section 310(a)(2). The Trustee shall comply with TIA Section 310(b).
SECTION 8.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 9.
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations. The Company may
terminate all of its obligations under this Indenture if:
(a) (1) the Securities mature within one year or
all of them are to be called for redemption
(and the Securities are redeemable) within one
year and arrangements satisfactory to the
Trustee are made with respect to the giving of
the notice of redemption; and
(2) the Company irrevocably deposits in trust with
the Trustee money or U.S. Government
Obligations sufficient to pay, when due, the
principal of and premium, if any, and interest
on the Securities to maturity or redemption, as
the case may be. The Company may make such
deposit only during the one-year period
referred to in paragraph (1) above and only if
Article 12 permits it; or
(b) all securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities which have been
replaced or paid or Securities for whose payment money or securities
have theretofore been held in trust and thereafter repaid to the
Company, as provided in Section 9.03) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by
it hereunder.
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However, the obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
5.01, 8.07, 8.08, 9.03, 9.04 and 9.05 and in Article 11 shall survive until the
Securities are no longer outstanding. Thereafter the obligations in Sections
8.07, 9.03 and 9.04 shall survive.
After a termination of the Company's obligations in accordance with
this Section, the Trustee upon request shall acknowledge in writing the
discharge of the Company's obligations under this Indenture except for those
surviving obligations specified above.
In order to have money available on a payment date to pay principal of
and premium, if any, or interest on the Securities, the U.S. Government
Obligations shall be payable as to principal or interest on or before such
payment date in such amounts as will provide the necessary money.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged and which are not callable at the issuer's
option.
SECTION 9.02. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to Section
9.01. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and premium, if any, and interest on the Securities.
Money and securities so held in trust are not subject to Article 12.
SECTION 9.03. Repayment to Company. The Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess money or securities
held by them at any time.
Subject to the requirements of applicable law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or premium, if any, or interest that remains unclaimed
for two years; provided, however, that, before being required to make any such
repayment, the Trustee or such Paying Agent shall, if the Company so requests
and at the expense of the Company, cause to be published once a week for two
successive weeks, in each case on any day of the week, in an authorized
newspaper in the Borough of Manhattan, The City of New York, or mail to each
such Holder, a notice (in such form as may be deemed appropriate by such Trustee
or Paying Agent) that said monies remain
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unclaimed and that, after a date named therein, which shall not be less than 30
days from the date of such publication or mailing, any unclaimed balance of said
monies then remaining will be returned to the Company. After payment to the
Company, Securityholders entitled to the money must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another Person.
SECTION 9.04. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee and each Securityholder against any tax, fee
or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such obligations.
SECTION 9.05. Reinstatement. If the Trustee is unable to apply any
money or United States Government Obligations in accordance with Section 9.01 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 9.01 until such time as the Trustee is permitted to apply
all such money or United States Government Obligations in accordance with
Section 9.01; provided, however, that if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or United States
Government Obligations held by the Trustee.
ARTICLE 10.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders. The Company and the Trustee
may amend or supplement this Indenture or the Securities without the consent of
any Securityholder:
(1) to cure any ambiguity, defect or inconsistency herein or in the
Securities;
(2) to comply with Section 6.01;
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(3) to make any change that does not materially adversely affect the
rights of any Securityholder; or
(4) to make provision with respect to the conversion rights of Holders
pursuant to the requirements of Section 11.17.
SECTION 10.02. With Consent of Holders. The Company and the Trustee may
amend or supplement this Indenture or the Securities with the written consent of
the Holders of at least a majority in aggregate principal amount of the
Securities, and the Holders of a majority in aggregate principal amount of the
Securities may waive compliance by the Company with any provision of this
Indenture or the Securities. However, without the consent of each Securityholder
affected, an amendment, supplement or waiver under this Section may not:
(1) change the stated maturity date of the principal of, or interest
on, any Security or adversely affect the right of a Holder to convert any
Security;
(2) reduce the principal amount or Repurchase Price of, or premium, if
any, or interest on, any Security;
(3) change the currency for payment of principal of, or interest on,
any Security;
(4) impair the right to institute suit for the enforcement of any
payment on or with respect to any Security;
(5) make any change in Article 12 that adversely affects the rights of
any Securityholder;
(6) reduce the principal amount of Securities whose Holders must
consent to an amendment or supplement of this Indenture or the waiver of
defaults or compliance hereunder; or
(7) make any change in Section 7.04, 7.07 or this 10.02 (second
sentence).
An amendment under this Section may not make any change that adversely
affects the rights under Article 12 of any holder of an issue of Senior
Indebtedness unless the holders of the issue pursuant to its terms consent to
the change.
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It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof. The Company may establish, by delivery of an Officers' Certificate to
the Trustee, a record date for determining Securityholders of record entitled to
give any consent or waiver.
After an amendment or supplement under this Section becomes effective,
the Company shall mail to Securityholders a notice briefly describing the
amendment or supplement. Any failure of the Company to mail any such notice, or
any defect therein, shall not, however, in any way impair or affect the validity
of any supplemental indenture.
SECTION 10.03. Compliance with Trust Indenture Act. Every amendment to
or supplement of this Indenture or the Securities shall comply with the TIA as
then in effect.
SECTION 10.04. Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a
Security is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to such
Security or portion of a Security if a Trust Officer of the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Securityholder. Notwithstanding the
foregoing, if a record date has been established for the purpose of determining
Securityholders entitled to consent, such written notice of revocation must be
signed by the Securityholder of record as of the record date or his duly
appointed proxy.
SECTION 10.05. Notation on or Exchange of Securities. The Trustee may
place an appropriate notation relating to an amendment, supplement or waiver on
any Security thereafter authenticated. The Company in exchange for all
Securities may issue, and the Trustee shall authenticate, new Securities that
reflect the amendment, supplement or waiver.
SECTION 10.06. Trustee to Sign Amendments, Etc. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or Section
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11.15 or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 8.01) shall be
fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture.
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article if the amendment or supplement does not adversely affect the
rights of the Trustee. If the amendment or supplement does adversely affect the
Trustee's rights, the Trustee may, but need not, sign it.
ARTICLE 11.
CONVERSION
SECTION 11.01. Conversion Privilege. A Holder of a Security may convert
it into fully paid and non-assessable shares of GGD Stock at any time during the
period and subject to the terms stated herein and in paragraph 8 of the
Securities. The number of shares issuable upon conversion of a Security is
determined by dividing the principal amount to be converted by the conversion
price in effect on the conversion date, and rounding the result to the nearest
1/l00th of a share, with 500/1,000 of a share to be rounded up.
The initial conversion price is stated in paragraph 8 of the
Securities. The conversion price is subject to adjustment as provided in this
Article 11.
A Holder may convert a portion of a Security if the portion is $1,000
or a whole multiple of $1,000. Provisions of this Indenture that apply to
conversion of all of a Security also apply to conversion of a portion of it.
"GGD Stock" means shares of the series designated as Genzyme General
Division Common Stock of the Company as it exists at the date of this Indenture
or shares of any class or series resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to any
required redemption by the Company.
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SECTION 11.02. Conversion Procedure. To convert a Security a Holder
must satisfy the requirements set forth in paragraph 8 of the Securities. The
date on which the Holder satisfies all those requirements in respect of a
Security is the conversion date of that Security. As soon as practical on or
after the conversion date, the Company shall deliver through the Conversion
Agent a certificate for the number of full shares of GGD Stock issuable upon the
conversion of that Security and a check for any fractional share. The person in
whose name the certificate is registered shall be treated as a shareholder of
record on and after the conversion date.
No payment or adjustment will be made for accrued interest on a
converted Security (other than the payment of interest to the Holder of a
Security at the close of business on a record date pursuant to Section 2.04(b)
hereof), or for dividends or distributions on any GGD Stock issued upon
conversion of any Security.
If a Holder converts more than one Security at the same time, the
number of full shares issuable upon the conversion shall be based on the total
principal amount of the Securities converted.
If GGD Stock is to be issued in the name of a Person other than the
Holder thereof, and the restrictions on transfer of such Security set forth in
the first paragraph of the face of the Security remain in effect, the Holder
must provide certification regarding compliance with the restrictions on
transfer, by executing an assignment in the form attached to the Security.
If the restrictions on transfer of a Security set forth in the first
paragraph on the face of the Security remain in effect, all shares of GGD Stock
delivered upon conversion thereof shall be subject to such restrictions on
transfer and shall bear a restrictive legend substantially in the form of such
paragraph.
Upon surrender of a Security that is converted in part, the Company
shall execute and the Trustee shall authenticate for the Holder a new Security
equal in principal amount to the unconverted portion of the Security
surrendered.
If the last day on which a Security may be converted is a Legal Holiday
in a place where a Conversion Agent is located, the Security may be surrendered
to that Conversion Agent on the next succeeding business day that is not a Legal
Holiday
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with the same force and effect as if surrendered on such last day.
Upon receiving notice of the conversion of an interest in a Security in
global form, the Trustee or the Securities Custodian, at the direction of the
Trustee, shall make a notation on such Security in global form as to the
reduction in the principal amount represented thereby, subject to the terms of
the standing agreements with and procedures of the Depository.
SECTION 11.03. Fractional Shares. The Company will not issue a
fractional share of GGD Stock upon conversion of a Security. Instead the Company
will deliver to the converting Securityholder its check for the current market
value of the fractional share. The current market value of a fraction of a share
is determined by multiplying the current market price of a full share by the
fraction, and rounding the result to the nearest cent, with .5 cents to be
rounded up.
For purposes of this Section, the current market price of a share of
GGD Stock is the Quoted Price of the GGD Stock on the last Trading Day prior to
the conversion date.
SECTION 11.04. Taxes on Conversion. If a Holder of a Security converts
it, the Company shall pay any documentary, stamp or similar issue or transfer
tax due on the issue of shares of GGD Stock upon the conversion. However, the
Holder shall pay any such tax which is due because the shares are issued in a
name other than such Holder's.
SECTION 11.05. Company to Provide Stock. The Company shall reserve at
all times and keep available, free from preemptive rights, out of its authorized
but unissued GGD Stock, enough shares of GGD Stock to permit the conversion of
the Securities.
All shares of GGD Stock which may be issued upon conversion of the
Securities shall be fully paid and nonassessable.
The Company shall endeavor to comply with all applicable securities
laws regulating the offer and delivery of shares of GGD Stock upon conversion of
Securities and shall endeavor to list such shares on each national securities
exchange on which the GGD Stock is listed, or to have such shares approved for
quotation on the Nasdaq National Market or other over-the-counter market on
which the GGD Stock is traded.
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SECTION 11.06. Adjustment for Change in Capital Stock. If the Company:
(1) issues any shares of its capital stock as a dividend (or other
distribution) on its GGD Stock;
(2) subdivides its outstanding shares of GGD Stock into a greater
number of shares;
(3) combines its outstanding shares of GGD Stock into a smaller number
of shares; or
(4) issues by reclassification of its GGD Stock any shares of its
capital stock,
then the conversion privilege and the conversion price in effect
immediately prior to such action shall be adjusted so that the Holder of a
Security thereafter converted will receive the number of shares of capital stock
of the Company that would have been received (and if there is more than one
class or series of such capital stock, then shares of each class or series in
the same proportions that would have been received) upon consummation of such
action by a Holder of the number of shares of GGD Stock into which such Security
might have been converted immediately prior to such action, with the aggregate
conversion price to be divided evenly among the shares to be issued upon
conversion thereof.
The adjustment described in the preceding paragraph shall become
effective immediately after the record date in the case of a dividend or
distribution and immediately after the effective date in the case of a
subdivision, combination or reclassification.
If, after an adjustment, a Holder of a Security may receive shares of
two or more classes or series of capital stock of the Company upon conversion of
such Security, the Company shall determine the allocation of the adjusted
conversion price between or among such classes or series of capital stock. After
such allocation, the conversion privilege and the conversion price of each class
of capital stock shall thereafter be subject to adjustment on terms comparable
to those applicable to GGD Stock in this Article.
SECTION 11.07. Adjustment for Rights Issue. If the Company distributes
any rights or warrants to all holders of its GGD Stock entitling them to
subscribe for or purchase shares of GGD Stock at a price per share less than the
current
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market price per share (as defined in Section 11.11), then, on the Record Date
(as defined in this Section 11.07), the conversion price shall be adjusted in
accordance with the formula:
O + (N x P)
AC = CC x M
-----------
O + N
where:
AC = the adjusted conversion price.
CC = the current conversion price.
O = the number of shares of GGD Stock outstanding on the
Record Date.
N = the number of additional shares of GGD Stock offered.
P = the offering price per share of the additional
shares.
M = the current market price per share of GGD Stock on
the Record Date (as defined in this Section 11.07).
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive such rights or
warrants (for purposes of this Section 11.07 only, the "Record Date").
SECTION 11.08. Adjustment for Certain Distributions. Subject to the
last paragraph of this Section 11.08, if the Company distributes to all holders
of its GGD Stock any cash, debt securities (or other evidences of indebtedness)
or other assets (excluding dividends or distributions for which adjustment is
required to be made under Sections 11.06, 11.07 or 11.09), the conversion price
shall be reduced in accordance with the following formula:
AC = CC x M - P
-----
M
where:
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AC = the adjusted conversion price.
CC = the current conversion price.
M = the current market price per share of GGD Stock on
the Record Date (as defined in this Section 11.08).
P = the aggregate fair market value on the Record Date
(as defined in this Section 11.08) (as determined in
good faith by the Board of Directors and set forth in
a certified resolution filed with the Trustee) of the
cash, debt securities (or other evidences of
indebtedness) or other assets distributed applicable
to one share of GGD Stock.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive such distribution (for
purposes of this Section 11.08 only, the "Record Date").
No adjustment will be made with respect to this Section 11.08 if, in
lieu of such adjustment, the holders of the Securities, upon conversion, will be
entitled to receive, in addition to the shares of GGD Stock into which such
Securities are convertible, the kind and amount of cash, debt securities (or
other evidences of indebtedness) or other assets comprising the distribution
that such holders would have received had they converted their Securities
immediately prior to the Record Date (as defined in this Section 11.08). In
addition, no adjustment will be made in the event that the then fair market
value (as so determined) of the cash, debt securities (or other evidences of
indebtedness) or other assets so distributed applicable to one share of GGD
Stock is equal to or greater than the current market price per share of the GGD
Stock, in which case, in lieu of such adjustment, adequate provision shall be
made so that each holder of Securities shall have the right to receive upon
conversion the amount of cash, debt securities (or other evidences of
indebtedness) or other assets such holder would have received had such holder
converted each Security on the Record Date (as defined in this Section 11.08).
SECTION 11.09. Adjustment for All Cash Distribution. Subject to the
last two paragraphs of this Section 11.09, if the Company shall pay or make a
dividend or other distribution consisting exclusively of cash to all holders of
its GGD Stock,
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the conversion price shall be reduced in accordance with the following formula:
AC = CC x M - C
-----
M
where:
AC = the adjusted conversion price.
CC = the current conversion price.
M = the current market price per share of GGD Stock on
the date fixed for payment of such distribution.
C = the amount of cash so distributed and not excluded
(as provided below) applicable to one share of GGD
Stock.
The adjustment shall become effective immediately prior to the opening
of business on the day following the date fixed for payment of such
distribution.
For the purposes of this Section 11.09, (A) the portion of regular cash
dividends on the GGD Stock that does not exceed the per share amount of the
immediately preceding regular cash dividend on the GGD Stock (as adjusted to
reflect any of the events referred to in Sections 11.06, 11.07, 11.08, 11.09 and
11.10) shall be excluded and (B) the portion of such regular cash dividends on
the GGD Stock, to the extent that the annualized per share amount thereof does
not exceed 15% of the current market price per share of the GGD Stock as of the
trading day immediately preceding the date of declaration of such dividend,
shall be excluded.
No adjustment will be made in the event that the amount of cash so
distributed applicable to one share of GGD Stock is equal to or greater than the
current market price per share of the GGD Stock, in which case, in lieu of such
adjustment, adequate provision shall be made so that each Securityholder shall
have the right to receive upon conversion the amount of cash such Holder would
have received had such Holder converted each Security immediately prior to the
record date for the distribution of the cash.
SECTION 11.10. Adjustment for Tender or Exchange Offer. Subject to the
last paragraph of this Section 11.10, in
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the event that a tender or exchange offer (other than an odd-lot offer) made by
the Company or any subsidiary of the Company for all or a portion of the GGD
Stock shall expire and such tender or exchange offer (including any amendment in
effect immediately prior to the expiration thereof) shall require the payment to
stockholders of consideration per share of GGD Stock having a fair market value
(as determined in good faith by the Board of Directors and set forth in a
certified resolution filed with the Trustee) that, as of the last time (the
"Expiration Time") tenders or exchanges may be made pursuant to such tender or
exchange offer, exceeds 110% of the current market price per share of GGD Stock
at the Expiration Time, the conversion price shall be reduced in accordance with
the following formula:
AC = CC x O x M
-----------
P + (T x M)
where:
AC = the adjusted conversion price.
CC = the current conversion price.
O = the number of shares of GGD Stock outstanding
(including any tendered or exchanged shares) at the
Expiration Time.
P = the fair market value of the aggregate consideration
payable to shareholders of GGD Stock based on the
acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares of GGD
Stock validly tendered or exchanged and not withdrawn
as of the Expiration Time (the shares of GGD Stock so
accepted, up to any such maximum, being referred to
as the "Purchased Shares").
T = the number of shares of GGD Stock outstanding (less
any Purchased Shares) on the Expiration Time.
M = the current market price per share of GGD Stock at
the Expiration Time.
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The adjustment shall become effective immediately prior to the opening
of business on the day following the Expiration Time.
In the event that the Company or its subsidiary, if applicable, 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.
SECTION 11.11. Current Market Price. For purposes of Sections 11.07,
11.08, 11.09 and 11.10, the current market price per share of GGD Stock on any
date is the average of the Quoted Prices of the GGD Stock for five consecutive
Trading Days selected by the Company commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the date in question and the
Trading Day before the "ex" date, if any, with respect to the issuance or
distribution requiring such computation. The term "'ex' date," when used with
respect to any issuance or distribution, means the first Trading Day on which
the GGD Stock trades regular way in the market from which the Quoted Price is
then to be determined without the right to receive such issuance or
distribution.
SECTION 11.12. When Adjustment May Be Deferred. No adjustment in the
conversion price need be made unless the adjustment would require an increase or
decrease of at least 1% in the conversion price then in effect. Any adjustments
which are not made shall be carried forward and taken into account in any
subsequent adjustment.
All calculations under this Article shall be made to the nearest cent
or to the nearest 1/100th of a share, as the case may be, with .005 cents and
500/1,000 of a share to be rounded up.
SECTION 11.13. When No Adjustment Required. No adjustment need be made
for rights to purchase Common Stock pursuant to a Company plan for reinvestment
of dividends or interest.
No adjustment need be made for a change in the par value (including a
change to no par value) of the Common Stock.
To the extent the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
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Notwithstanding any provision to the contrary in this Indenture, no
adjustment shall be made in the conversion price which would have the effect of
reducing the conversion price below the par value of the Common Stock.
SECTION 11.14. Notice of Adjustment. Whenever the conversion price is
adjusted, the Company shall promptly mail to Securityholders a notice of the
adjustment and file with the Trustee a certificate from the Company's
independent public accountant briefly stating the facts requiring the adjustment
and the manner of computing it. In the absence of manifest error, such
certificate shall be presumptive evidence that the adjustment is correct.
SECTION 11.15. Voluntary Reduction. 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 20 days and if the reduction is irrevocable during the period.
Notwithstanding any provision to the contrary in this Indenture, the reduction
of the conversion price pursuant to this Section 11.15 shall not require the
consent of the Trustee or any Securityholder.
Whenever the conversion price is reduced, the Company shall mail to
Securityholders and the Trustee a notice of the reduction. The Company shall
mail the notice at least 15 days before the date the reduced conversion price
takes effect. The notice shall state the reduced conversion price and the period
during which it will be in effect.
A reduction of the conversion price is deemed not to be in effect for
purposes of calculating adjustments pursuant to Sections 11.06 through 11.10.
SECTION 11.16. Notice of Certain Transactions. If:
(1) the Company takes any action which would require an adjustment in
the conversion price pursuant to Section 11.08 but, in lieu of such
adjustment, the Securityholders are entitled to participate therein (as
described in the last paragraph of Section 11.08);
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 11.17; or
(3) there is a dissolution or liquidation of the Company,
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the Company shall mail to Securityholders and the Trustee a notice stating the
record date for any such distribution or the effective date of any such
subdivision, combination, reclassification, consolidation, merger, transfer,
lease, liquidation or dissolution. The Company shall mail the notice at least 15
days before such date. Failure to mail the notice or any defect in it shall not
affect the validity of any transaction referred to in clause (1), (2) or (3) of
this Section.
SECTION 11.17. Provisions in Case of Consolidation, Merger of the
Company or Transfer or Lease. If the Company is a party to a consolidation or
merger or a transfer or lease of all or substantially all of its assets not
prohibited by Section 6.01 or a merger which reclassifies or changes its
outstanding GGD Stock, the Person formed by such consolidation or resulting from
such merger or which assumes or leases such assets shall enter into a
supplemental indenture.
The supplemental indenture shall provide that the Holder of a Security
may convert it into the kind and amount of securities, cash or other assets
receivable upon the consolidation, merger, transfer or lease by a holder (other
than any party to such transaction or any of its affiliates) of the number of
shares of GGD Stock into which such Security might have been converted
immediately before the effective date of such transaction, assuming such holder
of GGD Stock failed to exercise his rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such
consolidation, merger, transfer or lease (provided that, if the kind or amount
of securities, cash or other property receivable upon such consolidation,
merger, transfer or lease is not the same for each share of GGD Stock held
immediately prior to such consolidation, merger, transfer or lease by others
than the parties to such transaction or their affiliates and in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purposes of this Section the kind and amount of securities, cash
and other property receivable upon such consolidation, merger, transfer or lease
by 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). The
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for in this Article.
If the issuer of securities deliverable upon conversion of Securities is an
affiliate of the surviving, transferee or lessee corporation, that issuer shall
join in the supplemental indenture. The successor Company shall mail to each
Securityholder a notice briefly describing the supplemental indenture.
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If this Section applies to a particular event, Section 11.06 shall not
apply to such event.
SECTION 11.18. Company Determination Final. Subject to compliance with
the terms of this Indenture (including without limitation Section 11.14) and of
the Securities, any determination which the Company or its Board of Directors
must make pursuant to Section 11.03, 11.06, 11.08, 11.10, 11.11 or 11.12 shall
be conclusive.
SECTION 11.19. Trustee's Disclaimer. The Trustee has no duty to
determine when an adjustment under this Article should be made, how it should be
made or what it should be. The Trustee has no duty to determine the market price
or market value of any fractional or other share. The Trustee has no duty to
determine whether any provisions of a supplemental indenture under Section 11.17
are correct. The Trustee makes no representation as to the validity or value of
any securities or assets issued upon conversion of the Securities. The Trustee
shall not be responsible for the Company's failure to comply with this Article.
Each Conversion Agent other than the Company shall have the same protection
under this Section as the Trustee.
ARTICLE 12.
SUBORDINATION
SECTION 12.01. Agreement to Subordinate. The Company agrees, and each
Securityholder by accepting a Security agrees, that the indebtedness evidenced
by the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article, to the prior payment in full of all Senior
Indebtedness, and that the subordination is for the benefit of the holders of
Senior Indebtedness.
SECTION 12.02. Certain Definitions.
"Senior Indebtedness" means:
(a) the principal of, interest (including, to the extent permitted by
applicable law, interest on or after the commencement of a proceeding
referred to in clauses (5) or (6) of Section 7.01 whether or not
representing an allowed claim in such proceeding) on and any other amounts
owing with respect to (i) any indebtedness of the Company,
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now or hereafter outstanding, in respect of borrowed money (other than
the Securities), (ii) any indebtedness of the Company, now or hereafter
outstanding, evidenced by a bond, note, debenture, capitalized lease,
reimbursement obligation with respect to any letter of credit or other
similar instrument, (iii) any other written obligation of the Company, now
or hereafter outstanding, to pay money issued or assumed as all or part of
the consideration for the acquisition of property, assets or securities and
(iv) any guaranty or endorsement (other than for collection or deposit in
the ordinary course of business) or discount with recourse of, or other
agreement (contingent or otherwise) to purchase, repurchase or otherwise
acquire, to supply or advance funds or to become liable with respect to
(directly or indirectly), any indebtedness or obligation of any person of
the type referred to in the preceding subclauses (i), (ii) and (iii) now or
hereafter outstanding; and
(b) any refundings, renewals or extensions of any indebtedness or other
obligation described in clause (a) of this Section 12.02.
Notwithstanding the foregoing, if, by the terms of the instrument
creating or evidencing any indebtedness or obligation referred to in clauses (a)
and (b) above, it is expressly provided that such indebtedness or obligation is
not senior in right of payment to the Securities, such indebtedness or
obligation shall not be included as Senior Indebtedness.
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
SECTION 12.03. Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation, dissolution or
winding up of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property:
(1) holders of Senior Indebtedness shall be entitled to receive payment
in full, in cash or in a manner satisfactory to the holders of such Senior
Indebtedness, of all Senior Indebtedness before Securityholders shall be
entitled to receive any payments of principal of or premium, if any, or
interest on Securities; and
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(2) until the Senior Indebtedness is paid in full in cash or in a
manner satisfactory to the holders of such Senior Indebtedness, any distribution
to which Securityholders would be entitled but for this Article shall be made to
holders of Senior Indebtedness as their interests may appear, except that
Securityholders may receive securities that are subordinated to Senior
Indebtedness to at least the same extent as the Securities.
A distribution may consist of cash, securities or other property.
SECTION 12.04. Company Not to Make Payments with Respect to Securities
in Certain Circumstances. (a) Upon the maturity of any Senior Indebtedness by
lapse of time, acceleration or otherwise, all principal thereof, premium, if
any, and interest thereon and any other amounts owing in respect thereof shall
first be paid in full, or such payment duly provided for in cash or in a manner
satisfactory to the holders of such Senior Indebtedness, before any payment is
made on account of the principal of or premium, if any, or interest on the
Securities or to acquire any of the Securities.
(b) Upon the happening of a default or event of default in the payment
of the principal, premium, if any, or interest on the Senior Indebtedness, then,
unless such default or event of default has been cured or waived or shall have
ceased to exist, no payment shall be made by the Company with respect to the
principal, premium, if any, or interest on (or otherwise in respect of) the
Securities or to acquire any of the Securities.
(c) Upon the happening of a default or event of default in respect of
the Senior Indebtedness (other than a default or event of default in payment of
the principal, premium, if any, or interest on the Senior Indebtedness) and if
the Trustee and the Company receives a notice of such default or event of
default from the holders of the Senior Indebtedness or their Representative (a
"Payment Blockage Notice"), then no payment shall be made by the Company with
respect to the principal, premium, if any, or interest on (or otherwise in
respect of) the Securities until the earlier of (i) the date on which such
default or event of default shall have been cured or waived or shall have ceased
to exist or (ii) the 179th day after the date of such receipt of such Payment
Blockage Notice. No more than one Payment Blockage Notice shall be effective for
purposes of this section during any 365 consecutive day period. For purposes of
this paragraph, no such default or event of de-
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fault that existed upon first delivery of any Payment Blockage Notice shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless such
default or event of default shall have been cured or waived for a period of 180
consecutive days.
SECTION 12.05. Acceleration of Securities. If payment of the Securities
is accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration.
SECTION 12.06. When Distribution Must Be Paid Over. If a distribution
is made to Securityholders that, because of this Article, should not have been
made to them, the Securityholders who receive the distribution shall hold it in
trust for holders of Senior Indebtedness and pay it over to them as their
interests may appear.
SECTION 12.07. Notice by Company. The Company shall promptly notify the
Trustee and the Paying Agent of any facts known to the Company that would cause
a payment of principal of or premium, if any, or interest on the Securities to
violate this Article.
SECTION 12.08. Subrogation. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to the Securityholders have been applied to the payment of
Senior Indebtedness. A distribution made under this Article to holders of Senior
Indebtedness which otherwise would have been made to Securityholders is not, as
between the Company and Securityholders, a payment by the Company on Senior
Indebtedness.
SECTION 12.09. Relative Rights. This Article defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the obligation
of the Company, which is absolute and unconditional, to pay principal of
and premium, if any, and interest on the Securities in accordance with
their terms;
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(2) affect the relative rights of Securityholders and creditors of the
Company, other than holders of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to
Securityholders.
If the Company fails because of this Article to pay principal of or
premium, if any, or interest on a Security on the due date, such failure shall
nevertheless be deemed a Default.
SECTION 12.10. Subordination May Not Be Impaired by Company. No right
of any holder of Senior Indebtedness to enforce the subordination of the
indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with the terms of this
Indenture.
SECTION 12.11. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative.
SECTION 12.12. Rights of Trustee and Paying Agent. Notwithstanding any
provisions of this Indenture to the contrary, the Trustee and any Paying Agent
may continue to make payments on the Securities and shall not at any time be
charged with knowledge of the existence of any facts which would prohibit the
making of such payments until it receives written notice (received by a Trust
Officer, in the case of the Trustee) reasonably satisfactory to it that payments
may not be made under this Article and, prior to the receipt of any such notice,
the Trustee, subject to the provisions of Section 8.01, and any Agent shall be
entitled to assume conclusively that no such facts exist. The Company, an Agent,
a Representative or a holder of Senior Indebtedness may give the notice. If an
issue of Senior Indebtedness has a Representative, only the Representative (or
any Representative, if more than one) may give the notice with respect to such
Senior Indebtedness.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a Representative) to establish that such notice has been given
by a holder of Senior
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Indebtedness (or a Representative), and shall be entitled to rely on any written
notice by a Person representing himself to be a holder of Senior Indebtedness to
the effect that such issue of Senior Indebtedness has no Representative.
Except as provided in Section 9.02, any deposit of monies by the
Company with the Trustee or any Paying Agent (whether or not in trust) for the
payment of the principal of or premium, if any, or interest on, or Repurchase
Price, if any, of any Securities shall be subject to the provisions of this
Article 12, except that if, at least three business days prior to the date on
which by the terms of this Indenture any such monies may become payable for any
purpose (including, without limitation, the payment of, principal of, or
premium, if any, or interest on any Security), the Trustee shall not have
received with respect to such monies the notice provided for in this Section
12.12, then the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received and
shall not be affected by any notice to the contrary which may be received by it
within three business days prior to or on or after such date. This Section shall
be construed solely for the benefit of the Trustee and Paying Agent and shall
not otherwise affect the rights of holders of Senior Indebtedness. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of the Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article 12, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive payment.
The Trustee shall not be deemed to owe any fiduciary duty to holders of
Senior Indebtedness by virtue of the provisions of this Article 12. The
Trustee's responsibilities to the holders of Senior Indebtedness are limited to
those set forth in this Article and no implied covenants or obligations shall be
read into this Indenture. The Trustee shall not become liable to the holders of
Senior Indebtedness if it makes a payment prohibited by this Article in good
faith.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have
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-59-
if it were not Trustee. Any Agent may do the same with like rights.
SECTION 12.13. Effectuation of Subordination by Trustee. Each Holder of
Securities, by acceptance thereof, authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
ARTICLE 13.
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication to the Company or
the Trustee by the other shall be duly given if in writing and delivered in
person or by overnight courier or mailed by first class mail or transmitted by
telephone facsimile transmission (and receipt confirmed) addressed as follows:
If to the Company: Genzyme Corporation
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
If to the Trustee: State Street Bank and Trust
Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust
Administration
Facsimile: (000) 000-0000
With a copy to:
Peabody & Xxxxxx
00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
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The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address as shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Securityholder or any defect in
it shall not affect its sufficiency with respect to other Securityholders. If
the Company mails a notice or communication to Securityholders, it shall mail a
copy to the Trustee and each Agent at the same time.
If a notice or communication is delivered, mailed or transmitted in the
manner provided above within the time prescribed, it is duly given, whether or
not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than pursuant to Section 5.03) shall
include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
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(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, such examination
or investigation as is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition has been complied
with; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 13.06. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or a meeting of Securityholders. The Registrar,
Paying Agent, New York Presenting Agent and Conversion Agent may each make
reasonable rules and set reasonable requirements for its respective functions.
SECTION 13.07. Legal Holidays. A "Legal Holiday" is a Saturday, Sunday
or a day on which banking institutions in either New York, New York or in
Boston, Massachusetts are not required to be open. If a payment date is a Legal
Holiday at a place of payment, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If a regular record date is a Legal Holiday, the record date
shall not be affected.
SECTION 13.08. Governing Law. The laws of the State of New York shall
govern this Indenture and the Securities without regard to principles of
conflicts of law.
SECTION 13.09. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
SECTION 13.10. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
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SECTION 13.11. Counterpart Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
SECTION 13.12. Severability. In case any provision in this Indenture or
in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim therefor against
any party hereto.
69
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
GENZYME CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
70
APPENDIX 1
RULE 144A/REGULATION S APPENDIX FOR OFFERINGS TO QUALIFIED
INSTITUTIONAL BUYERS PURSUANT TO RULE 144A AND TO CERTAIN
PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S
CERTAIN PROVISIONS RELATING TO THE SECURITIES
1. Definitions.
1.1 Definitions.
For the purposes of this Appendix the following terms shall
have the meanings indicated below:
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Initial Purchasers" means Credit Suisse First Boston
Corporation, Xxxxx & Company and Xxxxxxx, Sachs & Co.
"Purchase Agreement" means the Purchase Agreement dated May
19, 1998, by and among the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement dated May 15, 1998, by and among the Company and the Initial
Purchasers.
"Securities" means the 5-1/4% Convertible Subordinated Notes
Due 2005, issued under this Indenture on or about the date hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration
statement issued by the Company, in connection with the offer and sale of
Securities, pursuant to the Registration Rights Agreement.
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"Transfer Restricted Securities" means each Security until (i)
the date on which such Note has been effectively registered under the Securities
Act and disposed of in accordance with the Resale Shelf Registration Statement
or (ii) the date on which such Note is distributed to the public pursuant to
Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under
the Securities Act.
1.2 Other Definitions.
Term Defined in Section:
---- ------------------
"Agent Members"........................... 2.1(b)
"Global Security"......................... 2.1(a)
"Regulation S"............................ 2.1(c)
"Rule 144A"............................... 2.1(a)
2. The Securities.
2.1 Form and Dating.
The Securities are being offered and sold by the Company
pursuant to the Purchase Agreement.
(a) Global Securities. Securities offered and sold to a QIB in
reliance on Rule 144A under the Securities Act ("Rule 144A") as provided in the
Purchase Agreement, shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form without
interest coupons set forth in Exhibit A to the Indenture with the global
securities legend on Exhibit A to the Indenture and restricted securities legend
set forth in Section 2.2 (each, a "Global Security"), which shall be deposited
on behalf of the purchasers of the Securities represented thereby with the
Trustee, at its New York office, as custodian for the Depository (or with such
other custodian as the Depository may direct), and registered in the name of the
Depository or a nominee of the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depository or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
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-3-
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Security, and the Depository
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this
Section 2.1 or Section 2.2 or 2.4, owners of beneficial interests in Global
Securities will not be entitled to receive physical delivery of certificated
Securities. Securities offered and sold in reliance on Regulation S under the
Securities Act ("Regulation S") as provided in the Purchase Agreement shall be
issued initially in the form of one or more certificated Securities in
definitive, fully registered form without interest coupons, as set forth in
Exhibit B to the Indenture, with the restricted securities legend set forth in
Section 2.2(a), which shall be duly executed by the Company and authenticated by
the Trustee as provided in the Indenture. Upon transfer of such definitive
Securities to a QIB, such definitive Securities will, unless the restricted
securities legend on such Global Security has previously been removed, be
exchanged for an interest in the Global Security pursuant to the provisions of
Section 2.06 of the Indenture.
2.2 Legend.
(a) Except as permitted by the following paragraphs (b) and
(c), each Security certificate evidencing a Transfer Restricted Security (and
all Securities issued in exchange
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therefor or in substitution thereof) shall bear a legend in substantially the
following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND THE COMMON
STOCK ISSUABLE UPON CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS
HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY AND THE COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT
(A) THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION THEREOF
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)
INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (ii) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE), OR (iv) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i)
THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
AND THE COMMON STOCK, ISSUABLE UPON CONVERSION THEREOF FROM IT, OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(b) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act, or after the second
anniversary of the original issuance date of the Security (or such earlier date
after which the Security may be freely transferred without registration under
the Securities Act or without being subject to transfer restrictions pursuant to
the Securities Act, as may be
74
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provided in Rule 144(k) under the Securities Act (or any successor provision
thereto) or otherwise) the Registrar shall permit the Holder thereof to exchange
such Transfer Restricted Security for a certificated Security that does not bear
the legend set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security, if the Holder certifies in writing to the
Registrar that its request for such exchange was made in reliance on Rule 144
(such certification to be in the form set forth on the reverse of the Security).
(c) After a transfer of any Securities during the period of
the effectiveness of a Shelf Registration Statement with respect to such
Securities, as the case may be, all requirements pertaining to legends on such
Security will cease to apply, the requirements requiring any such Security
issued to certain Holders be issued in global form will cease to apply, and a
certificated Security without legends will be available to the transferee of the
Holder of such Securities upon exchange of such transferring Holder's
certificated Security or directions to transfer such Holder's interest in the
Global Security, as applicable.
2.3 Assignment.
Whenever any certification is required to be given to evidence
compliance with certain restrictions relating to assignment of Transfer
Restricted Securities, the Assignment Form set forth in Exhibit 1 hereto shall
be used in lieu of the Assignment Form attached to the Form of Securities set
forth in Exhibit A or Exhibit B.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depository or with
the Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.2 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a "clearing agency"
registered under the Securities Exchange Act of 1934, as amended, and a
successor depositary is not appointed by the Company within 90 days after such
notice, or (ii) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of certificated Securities under
this Indenture.
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(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depository
to the Trustee located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Security, an equal aggregate principal amount of certificated
Securities of authorized denominations. Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depository shall direct. Any certificated
Security delivered in exchange for an interest in the Global Security shall,
except as otherwise provided by Section 2.2, bear the restricted securities
legend set forth in Section 2.2(a).
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a), the Company will promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
76
EXHIBIT 1
TO
RULE 144A/REGULATION S APPENDIX 1
[For use with Transfer Restricted Securities]
ASSIGNMENT FORM
To assign this Security or, in the event of conversion, shares of
Genzyme General Division Common Stock, fill in the form below:
I or we assign and transfer this Security or, shares of Genzyme General
----
Division Common Stock, to
--------------------------------------------------------------------------------
(Insert assignee's social security
or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to
----------------------------------------------
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date: Your signature:
-------------------------- --------------------------------
(Sign exactly as your name
appears on the face of
this Security)
Signature Guaranteed:
----------------------------------------------------------
In connection with any transfer of any of the Securities evidenced by
this certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
are owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with its
terms:
77
PAGE 2 of EXHIBIT 1
TO
RULE 144A/REGULATION S APPENDIX 1
[Check One]
(1) / / to the Company or a Subsidiary thereof; or
(2) / / to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act of 1933, as amended) that purchases
for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer
is being made in reliance on Rule 144A, in each case pursuant
to and in compliance with Rule 144A under the Securities Act
of 1933; or
(3) / / outside the United States to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act of
1933, as amended; or
(4) / / pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(5) / / pursuant to another available exemption from the registration
requirements of 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.
Unless one of the items above is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if item (3) or (5)
is checked, the Company or the Trustee may require, prior to registering any
such transfer of the Notes, in their sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3)
or (5)) and other information as the Trustee or the Company have reasonably
requested 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 of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any person other
than the Holder hereof unless
78
PAGE 3 of EXHIBIT 1
TO
RULE 144A/REGULATION S APPENDIX 1
and until the conditions to any such transfer of registration set forth herein
and in Section 2.06 of the Indenture shall have been satisfied.
Dated: Signed:
----------------------- ----------------------------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee:
-----------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the Company and the
transferor are relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
----------------------- ----------------------------------
NOTICE: To be executed by
an executive officer
79
EXHIBIT A
FORM OF SECURITY IN GLOBAL FORM
(Face of Security)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
No. $__________
CUSIP No.
GENZYME CORPORATION
5-1/4% Convertible Subordinated Note Due 2005
Genzyme Corporation, a Massachusetts corporation, promises to pay to
or registered assigns, the principal sum of
Dollars on June 1, 2005. The aggregate amount of outstanding Securities
represented hereby may from time to time be reduced or increased to reflect
exchanges by means of notations on the Schedule of Exchanges for Definitive
Securities on the reverse hereof.
Interest Payment Dates: June 1 and December 1.
Record Dates: May 15 and November 15.
A-1
80
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Dated:
GENZYME CORPORATION
By:
----------------------------------
By:
----------------------------------
Authenticated:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:
--------------------------------
Authorized Signer
A-2
81
(Reverse of Security)
GENZYME CORPORATION
5-1/4% Convertible Subordinated Note Due 2005
1. INTEREST.
GENZYME CORPORATION (the "Company"), a Massachusetts corporation,
promises to pay interest on the principal amount of this Security at the rate of
5-1/4% per annum. The Company will pay interest semi-annually on June 1 and
December 1 each year, commencing on December 1, 1998 to holders of Securities at
the close of business on the relevant record dates specified above. Interest on
the Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from May 22, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities (except defaulted
interest) to the persons who are registered holders of Securities at the close
of business on the May 15 or November 15 next preceding the interest payment
date (including Securities that are cancelled after the record date and on or
before the interest payment date). Holders must surrender Securities to a Paying
Agent to collect principal and any premium payments. The Company will pay
principal, premium, if any, and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT, REGISTRAR, CONVERSION AGENT.
Initially, State Street Bank and Trust Company (the "Trustee") will act
as Paying Agent, Registrar and Conversion Agent. The Company may change any
Paying Agent, Registrar, Conversion Agent or co-registrar by giving notice to
the Trustee. The Company may act as Paying Agent, Registrar, Conversion Agent or
co-registrar.
4. INDENTURE.
The Company issued this Security as one of a duly authorized issue of Notes of
the Company designated as its 5-1/4% Convertible Subordinated Notes Due 2005
(the "Securities") under an Indenture dated as of May 22, 1998 (the
"Indenture"), between the Company and the Trustee. The terms of the Securities
include those stated in the Indenture. The Securities are subject to
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82
all such terms, and Securityholders are referred to the Indenture for a
statement of such terms. Terms used herein that are defined in the Indenture
shall have the respective meanings assigned thereto in the Indenture. The
Securities are general unsecured obligations of the Company limited to
$225,000,000 in aggregate principal amount ($250,000,000 if the Over-Allotment
Option is exercised in full).
5. OPTIONAL REDEMPTION.
The Securities may not be redeemed prior to June 10, 2001, and are
redeemable, subject to the subordination provisions described below, on such
date and thereafter at the option of the Company, as a whole or from time to
time in part, at the following prices (expressed as percentages of the principal
amount) plus accrued interest to, but not including, the redemption date:
102.63% if redeemed on or before May 31, 2002 and thereafter if redeemed during
the 12-month period beginning on the dates indicated below:
Year Percentage
2002 101.75%
2003 100.88%
2004 100.00%
No sinking fund is provided for the Securities.
6. REDEMPTION AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE.
If a Fundamental Change (as defined below) occurs, each holder of
Securities shall have the right, at the holder's option, to require the Company
to repurchase all of such holder's Securities, or any portion thereof that is an
integral multiple of $1,000, on the date (the "Repurchase Date") selected by the
Company that is not less than 10 nor more than 30 days after the Final Surrender
Date (as defined below), at a price equal to 100% of the principal amount
thereof, plus accrued interest to the Repurchase Date (the "Repurchase Price").
Unless the Company shall have theretofore called for redemption all the
outstanding Securities, on or before the 30th day after the occurrence of a
Fundamental Change, the Company is obligated to mail or cause the Trustee to
mail to all holders of record of the Securities a notice (the "Company Notice")
describing, among other things, the occurrence of such Fundamental Change and of
the repurchase right arising as a result thereof. The Company must deliver a
copy of the Company Notice to the Trustee and cause a copy of such notice to be
published in a newspaper of general circulation in the Borough of Manhattan, The
City of New York. To exercise the repurchase
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right, a holder of Securities must surrender, on or before the date which,
subject to any contrary requirements of applicable law, is 60 days after the
date of mailing of the Company Notice (the "Final Surrender Date") the
Securities with respect to which the right is being exercised, which, in the
case of definitive Securities, must be duly endorsed for transfer to the
Company.
The term "Fundamental Change" shall mean any of the following:
(i) a "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended)
becoming the "beneficial owner" (as defined in Rule l3d-3 under such
Act) of Voting Shares (as defined below) of the Company entitled to
exercise more than 50% of the total voting power of all outstanding
Voting Shares of the Company (including any right to acquire Voting
Shares that are not then outstanding of which such person or group is
deemed the beneficial owner); or
(ii) a change in the Board of Directors in which the
individuals who constituted the Board of Directors at the beginning of
the two-year period immediately preceding such change (together with
any other director whose election by the Board of Directors or whose
nomination for election by the shareholders of the Company was approved
by a vote of at least two-thirds of the directors then in office who
either were directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors then in office; or
(iii) any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the
Company, or any sale or transfer of all or substantially all of the
assets of the Company to another Person (other than (x) a merger which
does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Genzyme General Division Common
Stock ("GGD Stock"), (y) a merger which is effected solely to change
the jurisdiction of incorporation of the Company or (z) any
consolidation with or merger of the Company into a wholly owned
subsidiary of the Company, or any sale or transfer by the Company of
all or substantially all of its assets to one or more of its wholly
owned subsidiaries, in any one transaction or a series of transactions,
provided, in any such case, that the resulting corporation or each such
subsidiary assumes or guarantees the Company's obligations under the
Securities); provided, however, that a Fundamental Change shall
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not occur with respect to any such transaction if either (i) the last
sale price of the GGD Stock for any five Trading Days during the ten
Trading Days immediately preceding the public announcement by the
Company of such transaction is at least equal to 105% of the conversion
price in effect on such Trading Day or (ii) the consideration in such
transaction to the holders of GGD Stock consists of cash, securities
that are, or immediately upon issuance will be, listed on a national
securities exchange or quoted on the Nasdaq National Market, or a
combination of cash and such securities, and the aggregate fair market
value of such consideration (which, in the case of such securities,
shall be equal to the average of the last sale prices of such
securities during the ten consecutive Trading Days commencing with the
sixth Trading Day following consummation of the transaction) is at
least 105% of the conversion price in effect on the date immediately
preceding the closing date of such transaction.
"Voting Shares" is defined to mean all outstanding shares of any class
or series (however designated) of Capital Stock entitled to vote generally in
the election of members of the Board of Directors and includes, without
limitation, the GGD Stock, the GTR Stock and the GMO Stock.
7. NOTICE OF REDEMPTION.
Notice of redemption pursuant to paragraph 5 must be mailed at least 30
days, but not more than 60 days, before the redemption date to the Trustee and
each holder of Securities to be redeemed at his address as shown on the register
kept by the Registrar. Securities in denominations larger than $1,000 may be
redeemed in part, but only in integral multiples of $1,000. On and after the
redemption date, interest shall cease to accrue on Securities or any portion of
them called for redemption; provided that funds in the requisite amount are paid
or made available for payment on that date.
8. CONVERSION.
Subject to the provisions of this paragraph 8, a holder of a Security
may convert such Security into GGD Stock of the Company. If the Security is
called for redemption, the holder may convert such Security at any time before
the close of business on the business day immediately preceding the redemption
date (unless the Company defaults in payment of the redemption price, in which
case the conversion right will terminate on the date such default is cured). The
holder may also convert such Security at any time before the close of business
on its maturity date. The initial conversion price is $39.60 per share, subject
to adjustment in certain events. The number
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of shares issuable upon conversion of a Security is determined by dividing the
principal amount to be converted by the conversion price in effect on the
conversion date, and rounding the result to the nearest 1/l00th of a share, with
500/1,000 of a share to be rounded up. Upon conversion, no payment or adjustment
for accrued interest on a converted Security (other than the payment of interest
to the Holder of a Security at the close of business on a record date pursuant
to paragraph 2 hereof) or for dividends or distributions on the GGD Stock will
be made. The Company will deliver a check for any fractional share issuable upon
conversion.
To convert a Security, a holder must (1) complete the appropriate
instruction form for conversion pursuant to the Depository's book-entry
conversion program, (2) deliver to the Conversion Agent by book-entry delivery
the interest in the Security in global form to be converted, (3) furnish the
appropriate endorsements and transfer documents if required by the Registrar or
Conversion Agent, and (4) pay any tax or duty which may be payable in respect of
any transfer involving the issue or delivery of GGD Stock in the name of a
Person other than the Holder thereof. A holder may convert a portion of a
Security if the portion is $1,000 or an integral multiple of $1,000.
If GGD Stock is to be issued in the name of a Person other than the
Holder thereof, and the restrictions on transfer of such Security set forth in
the first paragraph of the face of the Security remain in effect, the Holder
must provide certification through the Assignment Form attached hereto.
If the restrictions on transfer of a Security set forth in the first
paragraph of the face of the Security remain in effect, all shares of GGD Stock
delivered upon conversion thereof shall bear a restrictive legend substantially
in the form of such paragraph.
The conversion price will be adjusted for the issuance of capital stock
of the Company as a dividend or distribution on its GGD Stock; subdivisions,
combinations or certain reclassifications of GGD Stock; distributions to all
holders of GGD Stock of rights or warrants to purchase GGD Stock at less than
the current market price at the time; distributions to such holders of GGD Stock
of cash, debt securities (or other evidences of indebtedness) or other assets of
the Company (excluding dividends or distributions for which adjustment is
required to be made pursuant to another provision); certain dividends or other
distributions consisting exclusively of cash to all holders of GGD Stock; or for
payments to holders of GGD Stock pursuant to certain tender or exchange offers.
No adjustment in the conversion price will be required unless such
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adjustment would require a change of at least 1% in the conversion price then in
effect; provided that any adjustment that would otherwise be required to be made
shall be carried forward and taken into account in any subsequent adjustment.
However, no adjustment need be made if Securityholders are entitled to
participate in certain of the above transactions or in certain other cases. The
Company from time to time may voluntarily reduce the conversion price for a
period of at least 20 days.
If the Company is a party to a consolidation or merger, or a transfer
or a lease of all or substantially all of its assets or a merger which
reclassifies or changes its outstanding GGD Stock, the right to convert a
Security into GGD Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another person.
9. SUBORDINATION.
The Securities are subordinated to Senior Indebtedness, which is
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company agrees,
and each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give effect
to such provisions, and each Securityholder appoints the Trustee his
attorney-in-fact for any and all such purposes.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
This global security represents such of the outstanding Securities as
shall be specified herein or endorsed hereon in accordance with the Indenture.
The aggregate amount of outstanding Securities represented hereby may from time
to time be reduced or increased to reflect exchanges. The definitive Securities
are in registered form without coupons in denominations of $1,000 and whole
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not exchange or register the transfer of any
Security or portion of a Security selected for redemption, except the unredeemed
portion of any Security being redeemed in part. Also, it need not exchange or
register the transfer of any Securities for a period of 15 days before a
selection of Securities to be redeemed.
11. AMENDMENT, SUPPLEMENT, WAIVER.
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Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented, with the consent of the Company and the holders of a
majority in aggregate principal amount of the Securities, and any existing
default may be waived with the consent of the holders of a majority in aggregate
principal amount of the Securities. Without the consent of any Securityholder,
the Indenture or the Securities may be amended, inter alia, to cure any
ambiguity, defect or inconsistency, to provide for assumption of Company
obligations to Securityholders in the case of a merger or acquisition, or to
make any change that does not materially adversely affect the rights of any
Securityholder.
12. DEFAULTS AND REMEDIES.
An Event of Default is default in the payment of interest on the
Securities continued for 30 days, whether or not such payment is prohibited or
restricted by the subordination provisions of the Indenture; default in payment
of principal of or premium, if any, on the Securities when due and payable,
whether or not such payment is prohibited or restricted by the subordination
provisions of the Indenture; default in payment of the Repurchase Price to be
paid upon a redemption at the option of the Holder pursuant to paragraph 6;
failure by the Company for 60 days after certain notice to it to comply with any
of its other agreements in the Indenture; default in the payment of other
evidences of indebtedness of the Company if such payment exceeds $20,000,000 or
acceleration of payments with respect to indebtedness of the Company in excess
of $20,000,000; and certain events of bankruptcy or insolvency. If an Event of
Default occurs and is continuing, the Trustee or the holders of at least 25% in
aggregate principal amount of the Securities may declare the principal of, and
accrued interest on, all the Securities to be due and payable immediately.
Certain events of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence
of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity satisfactory to
it before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing default
(except a default in payment of principal or premium, if any, or interest) if it
determines that withholding notice is in their interests. The Company must
furnish an annual compliance certificate to the Trustee.
13. TRUSTEE DEALINGS WITH COMPANY.
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Xxxxx Xxxxxx Xxxx and Trust Company, the Trustee and any agent under
the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it were not
Trustee or agent.
14. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
15. AUTHENTICATION.
This Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent on the face hereof.
16. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
17. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption.
18. GOVERNING LAW.
The laws of the State of New York shall govern the Indenture and the
Securities.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE. IT
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ALSO WILL FURNISH THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE
TO: GENZYME CORPORATION, XXX XXXXXXX XXXXXX, XXXXXXXXX, XXXXXXXXXXXXX 00000,
ATTENTION: INVESTOR RELATIONS DEPARTMENT.
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SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Date of Amount of Amount of increase Principal amount of this Signature of authorized
Exchange decrease in in Principal Amount of Global Security officer of Trustee or
Principal Amount this Global Security following such decrease Securities Custodian
of this Global or increase
Security
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ASSIGNMENT FORM
To assign this Security or, in the event of conversion, shares of
Genzyme General Division Common Stock, fill in the form below:
I or we assign and transfer this Security or, shares of Genzyme General
----
Division Common Stock, to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security
or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Security on the
------------------------------------
books of the Company. The agent may substitute another to act for him.
Date: Your signature:
-------------------- --------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guaranteed:
--------------------------------------------------------
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EXHIBIT B
FORM OF DEFINITIVE SECURITY
(Face of Security)
No. $
CUSIP No. -----------
GENZYME CORPORATION
5-1/4% Convertible Subordinated Note Due 2005
Genzyme Corporation, a Massachusetts corporation, promises to pay
to or registered assigns, the principal sum of
------------------ --------------
Dollars on June 1, 2005.
Interest Payment Dates: June 1 and December 1.
Record Dates: May 15 and November 15.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Dated:
GENZYME CORPORATION
By:
---------------------------------
By:
---------------------------------
Authenticated:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:
-------------------------------
Authorized Signer
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(Reverse of Security)
GENZYME CORPORATION
5-1/4% Convertible Subordinated Note Due 2005
1. INTEREST.
GENZYME CORPORATION (the "Company"), a Massachusetts corporation,
promises to pay interest on the principal amount of this Security at the rate of
5-1/4% per annum. The Company will pay interest semi-annually on June 1 and
December 1 each year, commencing on December 1, 1998 to holders of Securities at
the close of business on the relevant record dates specified above. Interest on
the Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from May 22, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities (except defaulted
interest) to the persons who are registered holders of Securities at the close
of business on the May 15 or November 15 next preceding the interest payment
date (including Securities that are cancelled after the record date and on or
before the interest payment date). Holders must surrender Securities to a Paying
Agent to collect principal and any premium payments. The Company will pay
principal, premium, if any, and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT, REGISTRAR, CONVERSION AGENT.
Initially, State Street Bank and Trust Company (the "Trustee") will
act as Paying Agent, Registrar and Conversion Agent. The Company may change any
Paying Agent, Registrar, Conversion Agent or co-registrar by giving notice to
the Trustee. The Company may act as Paying Agent, Registrar, Conversion Agent or
co-registrar.
4. INDENTURE.
The Company issued this Security as one of a duly authorized issue of Notes of
the Company designated as its 5-1/4% Convertible Subordinated Notes Due 2005
(the "Securities") under an Indenture dated as of May 22, 1998 (the
"Indenture"), between the Company and the Trustee. The terms of the Securities
include those stated in the Indenture. The Securities are subject to
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all such terms, and Securityholders are referred to the Indenture for a
statement of such terms. Terms used herein that are defined in the Indenture
shall have the respective meanings assigned thereto in the Indenture. The
Securities are general unsecured obligations of the Company limited to
$225,000,000 in aggregate principal amount ($250,000,000 if the Over-Allotment
Option is exercised in full).
5. OPTIONAL REDEMPTION.
The Securities may not be redeemed prior to June 10, 2001, and are
redeemable, subject to the subordination provisions described below, on such
date and thereafter at the option of the Company, as a whole or from time to
time in part, at the following prices (expressed as percentages of the principal
amount) plus accrued interest to, but not including, the redemption date:
102.63% if redeemed on or before May 31, 2002 and thereafter if redeemed during
the 12-month period beginning on the dates indicated below:
YEAR PERCENTAGE
2002 101.75%
2003 100.88%
2004 100.00%
No sinking fund is provided for the Securities.
6. REDEMPTION AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE.
If a Fundamental Change (as defined below) occurs, each holder of
Securities shall have the right, at the holder's option, to require the Company
to repurchase all of such holder's Securities, or any portion thereof that is an
integral multiple of $1,000, on the date (the "Repurchase Date") selected by the
Company that is not less than 10 nor more than 30 days after the Final Surrender
Date (as defined below), at a price equal to 100% of the principal amount
thereof, plus accrued interest to the Repurchase Date (the "Repurchase Price").
Unless the Company shall have theretofore called for redemption all
the outstanding Securities, on or before the 30th day after the occurrence of a
Fundamental Change, the Company is obligated to mail or cause the Trustee to
mail to all holders of record of the Securities a notice (the "Company Notice")
describing, among other things, the occurrence of such Fundamental Change and of
the repurchase right arising as a result thereof. The Company must deliver a
copy of the Company Notice to the Trustee and cause a copy of such notice to be
published in a newspaper of general circulation in the Borough of Manhattan, The
City of New York. To exercise the repurchase
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right, a holder of Securities must surrender, on or before the date which,
subject to any contrary requirements of applicable law, is 60 days after the
date of mailing of the Company Notice (the "Final Surrender Date") the
Securities with respect to which the right is being exercised, which, in the
case of definitive Securities, must be duly endorsed for transfer to the
Company.
The term "Fundamental Change" shall mean any of the following:
(i) a "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended)
becoming the "beneficial owner" (as defined in Rule l3d-3 under such
Act) of Voting Shares (as defined below) of the Company entitled to
exercise more than 50% of the total voting power of all outstanding
Voting Shares of the Company (including any right to acquire Voting
Shares that are not then outstanding of which such person or group is
deemed the beneficial owner); or
(ii) a change in the Board of Directors in which the
individuals who constituted the Board of Directors at the beginning of
the two-year period immediately preceding such change (together with
any other director whose election by the Board of Directors or whose
nomination for election by the shareholders of the Company was approved
by a vote of at least two-thirds of the directors then in office who
either were directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors then in office; or
(iii) any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the
Company, or any sale or transfer of all or substantially all of the
assets of the Company to another Person (other than (x) a merger which
does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Genzyme General Division Common
Stock ("GGD Stock"), (y) a merger which is effected solely to change
the jurisdiction of incorporation of the Company or (z) any
consolidation with or merger of the Company into a wholly owned
subsidiary of the Company, or any sale or transfer by the Company of
all or substantially all of its assets to one or more of its wholly
owned subsidiaries, in any one transaction or a series of transactions;
provided, in any such case, that the resulting corporation or each such
subsidiary assumes or guarantees the Company's obligations under the
Securities); provided, however, that a Fundamental Change shall
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not occur with respect to any such transaction if either (i) the last
sale price of the GGD Stock for any five Trading Days during the ten
Trading Days immediately preceding the public announcement by the
Company of such transaction is at least equal to 105% of the conversion
price in effect on such Trading Day or (ii) the consideration in such
transaction to the holders of GGD Stock consists of cash, securities
that are, or immediately upon issuance will be, listed on a national
securities exchange or quoted on the Nasdaq National Market, or a
combination of cash and such securities, and the aggregate fair market
value of such consideration (which, in the case of such securities,
shall be equal to the average of the last sale prices of such
securities during the ten consecutive Trading Days commencing with the
sixth Trading Day following consummation of the transaction) is at
least 105% of the conversion price in effect on the date immediately
preceding the closing date of such transaction.
"Voting Shares" is defined to mean all outstanding shares of any
class or series (however designated) of Capital Stock entitled to vote generally
in the election of members of the Board of Directors and includes, without
limitation, the GGD Stock, the GTR Stock and the GMO Stock.
7. NOTICE OF REDEMPTION.
Notice of redemption pursuant to paragraph 5 must be mailed at least
30 days, but not more than 60 days, before the redemption date to the Trustee
and each holder of Securities to be redeemed at his address as shown on the
register kept by the Registrar. Securities in denominations larger than $1,000
may be redeemed in part, but only in integral multiples of $1,000. On and after
the redemption date, interest shall cease to accrue on Securities or any portion
of them called for redemption; provided that funds in the requisite amount are
paid or made available for payment on that date.
8. CONVERSION.
Subject to the provisions of this paragraph 8, a holder of a
Security may convert such Security into GGD Stock of the Company. If the
Security is called for redemption, the holder may convert such Security at any
time before the close of business on the business day immediately preceding the
redemption date (unless the Company defaults in payment of the redemption price,
in which case the conversion right will terminate on the date such default is
cured). The holder may also convert such Security at any time before the close
of business on its maturity date. The initial conversion price is $39.60 per
share, subject to adjustment in certain events. The number
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of shares issuable upon conversion of a Security is determined by dividing the
principal amount to be converted by the conversion price in effect on the
conversion date, and rounding the result to the nearest 1/l00th of a share, with
500/1,000 of a share to be rounded up. Upon conversion, no payment or adjustment
for accrued interest on a converted Security (other than the payment of interest
to the Holder of a Security at the close of business on a record date pursuant
to paragraph 2 hereof) or for dividends or distributions on the GGD Stock will
be made. The Company will deliver a check for any fractional share issuable upon
conversion.
To convert a Security, a holder must (1) complete and sign the
conversion notice on the reverse of the Security, (2) surrender the Security to
a Conversion Agent, (3) furnish the appropriate endorsements and transfer
documents if required by the Registrar or Conversion Agent, and (4) pay any tax
or duty which may be payable in respect of any transfer involving the issue or
delivery of GGD Stock in the name of a Person other than the Holder thereof. A
holder may convert a portion of a Security if the portion is $1,000 or an
integral multiple of $1,000.
If GGD Stock is to be issued in the name of a Person other than the
Holder thereof, and the restrictions on transfer of such Security set forth in
the first paragraph of the face of the Security remain in effect, the Holder
must provide certification through the Assignment Form attached hereto.
If the restrictions on transfer of a Security set forth in the first
paragraph of the face of the Security remain in effect, all shares of GGD Stock
delivered upon conversion thereof shall bear a restrictive legend substantially
in the form of such paragraph.
The conversion price will be adjusted for the issuance of capital
stock of the Company as a dividend or distribution on its GGD Stock;
subdivisions, combinations or certain reclassifications of GGD Stock;
distributions to all holders of GGD Stock of rights or warrants to purchase GGD
Stock at less than the current market price at the time; distributions to such
holders of GGD Stock of cash, debt securities (or other evidences of
indebtedness) or other assets of the Company (excluding dividends or
distributions for which adjustment is required to be made pursuant to another
provision); certain dividends or other distributions consisting exclusively of
cash to all holders of GGD Stock; or for payments to holders of GGD Stock
pursuant to certain tender or exchange offers. No adjustment in the conversion
price will be required unless such adjustment would require a change of at least
1% in the conversion price then in effect; provided that any adjustment that
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would otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment. However, no adjustment need be made if
Securityholders are entitled to participate in certain of the above transactions
or in certain other cases. The Company from time to time may voluntarily reduce
the conversion price for a period of at least 20 days.
If the Company is a party to a consolidation or merger, or a
transfer or a lease of all or substantially all of its assets or a merger which
reclassifies or changes its outstanding GGD Stock, the right to convert a
Security into GGD Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another person.
9. SUBORDINATION.
The Securities are subordinated to Senior Indebtedness, which is
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company agrees,
and each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give effect
to such provisions, and each Securityholder appoints the Trustee his
attorney-in-fact for any and all such purposes.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
This global security represents such of the outstanding Securities
as shall be specified herein or endorsed hereon in accordance with the
Indenture. The aggregate amount of outstanding Securities represented hereby may
from time to time be reduced or increased to reflect exchanges. The definitive
Securities are in registered form without coupons in denominations of $1,000 and
whole multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar may
require a holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not exchange or register the transfer of any
Security or portion of a Security selected for redemption, except the unredeemed
portion of any Security being redeemed in part. Also, it need not exchange or
register the transfer of any Securities for a period of 15 days before a
selection of Securities to be redeemed.
11. AMENDMENT, SUPPLEMENT, WAIVER.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented, with the consent of the Company and the holders of a
majority in aggregate principal amount of the Securities, and any existing
default may be waived with the consent of the holders of a majority in aggregate
princi-
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99
pal amount of the Securities. Without the consent of any Securityholder, the
Indenture or the Securities may be amended, inter alia, to cure any ambiguity,
defect or inconsistency, to provide for assumption of Company obligations to
Securityholders in the case of a merger or acquisition, or to make any change
that does not materially adversely affect the rights of any Securityholder.
12. DEFAULTS AND REMEDIES.
An Event of Default is default in the payment of interest on the
Securities continued for 30 days, whether or not such payment is prohibited or
restricted by the subordination provisions of the Indenture; default in payment
of principal of or premium, if any, on the Securities when due and payable,
whether or not such payment is prohibited or restricted by the subordination
provisions of the Indenture; default in payment of the Repurchase Price to be
paid upon a redemption at the option of the Holder pursuant to paragraph 6;
failure by the Company for 60 days after certain notice to it to comply with any
of its other agreements in the Indenture; default in the payment of other
evidences of indebtedness of the Company if such payment exceeds $20,000,000 or
acceleration of payments with respect to indebtedness of the Company in excess
of $20,000,000; and certain events of bankruptcy or insolvency. If an Event of
Default occurs and is continuing, the Trustee or the holders of at least 25% in
aggregate principal amount of the Securities may declare the principal of, and
accrued interest on, all the Securities to be due and payable immediately.
Certain events of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence
of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, Holders of a majority in aggregate principal amount of
the Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing default
(except a default in payment of principal or premium, if any, or interest) if it
determines that withholding notice is in their interests. The Company must
furnish an annual compliance certificate to the Trustee.
13. TRUSTEE DEALINGS WITH COMPANY.
State Street Bank and Trust Company, the Trustee and any agent under
the Indenture, in its individual or any other
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100
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not Trustee or agent.
14. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
15. AUTHENTICATION.
This Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent on the face hereof.
16. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
17. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption.
18. GOVERNING LAW.
The laws of the State of New York shall govern the Indenture and the
Securities.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE. IT ALSO WILL FURNISH THE TEXT OF
THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO: GENZYME CORPORATION, ONE
XXXXXXX
X-0
000
XXXXXX, XXXXXXXXX, XXXXXXXXXXXXX 00000, ATTENTION: INVESTOR RELATIONS
DEPARTMENT.
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102
CONVERSION NOTICE
To Genzyme Corporation:
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Genzyme General
Division Common Stock in accordance with the terms of the Indenture referred to
in this Security, and directs that the shares issuable and deliverable upon
conversion, together with any check in payment for fractional shares and any
Securities 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 are to be issued in the name of a Person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
To convert this Security into Genzyme General Division Common Stock of
the Company, check the box: / /
To convert only part of this Security, state the amount (must be $1,000
or any whole multiple thereof):
$--------
If you want the stock certificate made out in another Person's name,
fill in the form below:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert other Person's social security
or tax identification number)
--------------------------------------------------------------------------------
(Print or type other Person's name, address and zip code)
Date: Your signature:
-------------------- ----------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guaranteed:
----------------------------------------------------------
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103
ASSIGNMENT FORM
To assign this Security or, in the event of conversion, shares of
Genzyme General Division Common Stock, fill in the form below:
I or we assign and transfer this Security or, shares of Genzyme
------
General Division Common Stock, to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security
or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Security on the
----------------------------------------
books of the Company. The agent may substitute another to act for him.
Date: Your signature:
---------------------- ----------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guaranteed:
----------------------------------------------------------
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