IGENE BIOTECHNOLOGY, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
Trustee
---------------
Indenture
Dated as of [ ], 1998
---------------
8% Notes Due _________, 2003
CROSS-REFERENCE TABLE
Indenture
TIA SECTION SECTION
SS 310(a)(1)....................................................... 7.10
(a)(2)....................................................... 7.10
(a)(3)....................................................... N.A.
(a)(4)....................................................... N.A.
(b) ......................................................... 7.08; 7.10
(c) ......................................................... N.A.
SS 311(a).......................................................... 7.11
(b).......................................................... 7.11
(c).......................................................... N.A.
SS 312(a).......................................................... 2.05
(b).......................................................... 10.03
(c).......................................................... 10.03
SS 313(a).......................................................... 7.06
(b)(1)....................................................... N.A.
(b)(2)....................................................... 7.06
(c).......................................................... 7.06; 9.02
(d).......................................................... 7.06
SS 314(a).......................................................... 4.02; 9.02
(b).......................................................... N.A.
(c)(1)....................................................... 10.04(a)
(c)(2)....................................................... 10.04(a)
(c)(3)....................................................... N.A.
(d).......................................................... N.A.
(e).......................................................... 10.04(b)
(f).......................................................... N.A.
SS 315(a).......................................................... 7.01(b)
(b).......................................................... 7.05;9.02
(c).......................................................... 7.01(a)
(d).......................................................... 7.01(c)
(e).......................................................... 6.11
SS 316(a)(last sentence)........................................... 2.09
(a)(1)(A).................................................... 6.05
(a)(1)(B).................................................... 6.04
(a)(2)....................................................... N.A.
(b).......................................................... 6.07
(c).......................................................... 10.05
SS 317(a)(1)....................................................... 6.08
(a)(2)....................................................... 6.09
(b).......................................................... 2.04
SS 318(a).......................................................... 10.01
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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 this Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE...................................1
SECTION 1.01. Definitions ..................................................1
SECTION 1.02. Other Definitions.............................................3
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act...............................................3
SECTION 1.04. Rules of Construction.........................................4
ARTICLE 2
THE SECURITIES...............................................................5
SECTION 2.01. Form and Dating...............................................5
SECTION 2.02. Execution and Authentication..................................5
SECTION 2.03. Registrar and Paying Agent....................................6
SECTION 2.04. Paying Agent to Hold Money in Trust...........................6
SECTION 2.05. Securityholder Lists..........................................7
SECTION 2.06. Transfer and Exchange.........................................8
SECTION 2.07. Replacement Securities........................................8
SECTION 2.08. Outstanding Securities........................................9
SECTION 2.09. Treasury Securities...........................................9
SECTION 2.10. Temporary Securities..........................................9
SECTION 2.11. Cancellation.................................................10
SECTION 2.12. Defaulted Interest...........................................10
ARTICLE 3
REDEMPTION..................................................................11
SECTION 3.01. Notice to Trustee............................................11
SECTION 3.02. Selection of Securities to be Redeemed.......................11
SECTION 3.03. Notice of Redemption.........................................11
SECTION 3.04. Effect of Notice of Redemption...............................12
SECTION 3.05. Deposit of Redemption Price..................................12
SECTION 3.06. Securities Redeemed in Part..................................13
ARTICLE 4
COVENANTS...................................................................13
SECTION 4.01. Payment of Securities........................................13
SECTION 4.02. SEC Reports .................................................13
SECTION 4.03. Waiver of Usury Defense......................................14
SECTION 4.04. Compliance Certificates......................................14
SECTION 4.05. Payment of Taxes and Other Claims............................15
SECTION 4.06. Corporate Existence..........................................15
SECTION 4.07. Securities Purchased in Part.................................15
ARTICLE 5
SUCCESSOR CORPORATION.......................................................16
SECTION 5.01. When Company May Merge, etc..................................16
SECTION 5.02. Successor Corporation Substituted............................16
ARTICLE 6
DEFAULT AND REMEDIES........................................................17
SECTION 6.01. Events of Default............................................17
SECTION 6.02. Acceleration.................................................18
SECTION 6.03. Other Remedies...............................................19
SECTION 6.04. Waiver of Defaults and Events of Default.....................19
SECTION 6.05. Control by Two-Thirds........................................19
SECTION 6.06. Limitation on Suits..........................................20
SECTION 6.07. Rights of Holders to Receive Payment.........................20
SECTION 6.08. Collection Suit by Trustee...................................21
SECTION 6.09. Trustee May File Proofs of Claim.............................21
SECTION 6.10. Priorities .................................................22
SECTION 6.11. Undertaking for Costs........................................23
ARTICLE 7
TRUSTEE.....................................................................23
SECTION 7.01. Duties of Trustee............................................23
SECTION 7.02. Rights of Trustee............................................24
SECTION 7.03. Individual Rights of Trustee.................................25
SECTION 7.04. Trustee's Disclaimer.........................................25
SECTION 7.05. Notice of Defaults or Events of Default......................25
SECTION 7.06. Reports by Trustee to Holders................................26
SECTION 7.07. Compensation and Indemnity...................................26
SECTION 7.08. Replacement of Trustee.......................................27
SECTION 7.09. Successor Trustee by Xxxxxx, etc.............................28
SECTION 7.10. Eligibility; Disqualification................................28
SECTION 7.11. Preferential Collection of Claims
Against Company...........................................28
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE.....................................29
SECTION 8.01. Termination of Company's Obligations.........................29
SECTION 8.02. Application of Trust Money...................................30
SECTION 8.03. Repayment to Company.........................................30
SECTION 8.04. Reinstatement................................................30
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS.........................................31
SECTION 9.01. Without Consent of Holders...................................31
SECTION 9.02. With Consent of Holders......................................31
SECTION 9.03. Compliance with Trust Indenture Act..........................32
SECTION 9.04. Revocation and Effect of Consents............................33
SECTION 9.05. Notation On or Exchange of Securities........................33
SECTION 9.06. Trustee to Sign Amendments, etc..............................33
ARTICLE 10
MISCELLANEOUS...............................................................34
SECTION 10.01. Trust Indenture Act Controls................................34
SECTION 10.02. Notices .................................................34
SECTION 10.03. Communications by Holders With
Other Holders............................................35
SECTION 10.04. Certificate and Opinion as to
Conditions Precedent.....................................35
SECTION 10.05. Record Date for Vote or Consent of
Securityholders..........................................36
SECTION 10.06. Rules by Trustee, Paying Agent, Registrar...................36
SECTION 10.07. Legal Holidays..............................................37
SECTION 10.08. Governing Law...............................................37
SECTION 10.09. No Adverse Interpretation of
Other Agreements........................................37
SECTION 10.10. No Recourse Against Others..................................37
SECTION 10.11. Successors .................................................37
SECTION 10.12. Multiple Counterparts.......................................37
SECTION 10.13. Separability................................................38
SECTION 10.14. Table of Contents, Headings, etc............................38
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Note: This Table of Contents shall not, for any purpose, be
deemed to be a part of this Indenture.
INDENTURE dated as of [ ], 1998 between IGENE Biotechnology, Inc., a
Maryland corporation (the "Company"), and American Stock Transfer & Trust
Company, as Trustee (the "Trustee").
Both parties agree as follows for the benefit of the other and for the
equal and ratable benefit of the Holders of the Company's 8% Notes due _________
__, 2003.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any 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 or Paying Agent.
"Board of Directors" means the Board of Directors of the Company or
any authorized committee of the Board of Directors.
"Business Day" means a day that is not a Legal Holiday.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"default" means any event which is, or after notice or passage of
time, or both, would be, an Event of Default.
"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 of the Board, the President, any Vice
President, the Chief Financial Officer, the Treasurer or the Secretary of the
Company.
"Officer's Certificate" means a certificate signed by any Officer of
the Company.
"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 or the Trustee.
"person" means any individual, corporation, partnership, joint
venture, limited liability entity, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"principal" of a debt security, including the Securities, means the
principal of the security plus, when appropriate, the premium, if any, on the
security.
"redemption date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture,
as set forth in the form of Security annexed as Exhibit A hereto.
"redemption price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture,
as set forth in the form of Security annexed as Exhibit A hereto.
"SEC" means the Securities and Exchange Commission.
"Securities" means the 8% Notes due _________ __, 2003 or any of them,
as amended or supplemented from time to time, that are issued under this
Indenture.
"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 as provided in Section 9.03 hereof.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means the successor.
"Trust Officer" means any Account Manager or officer within the
Corporate Trust Services Department (or any successor group) of the Trustee,
including without limitation any Vice President, Assistant Vice President, any
trust officer, any Assistant Secretary or any other officer customarily
performing functions similar to those performed by any of the above- designated
officers who shall, in any case, be responsible for the administration of this
Indenture or have familiarity with it, and also means, with respect to a
particular corporate matter, any other officer of the Trustee to whom corporate
trust matters are referred because of his knowledge of and familiarity with the
particular subject.
SECTION 1.02. OTHER DEFINITIONS
Defined in
TERM SECTION
"Bankruptcy Law"...................................... 6.01
"Custodian"........................................... 6.01
"Event of Default".................................... 6.01
"Exchange Act"........................................ 4.10
"Legal Holiday"....................................... 10.07
"Paying Agent"........................................ 2.03
"Registrar"........................................... 2.03
"U.S. Government Obligations"......................... 8.01
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 terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.04. RULES OF CONSTRUCTION
Unless the context otherwise requires:
(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 in effect
on the date hereof, and any other reference in this Indenture to "generally
accepted accounting principles" refers to generally accepted accounting
principles in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein", "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A, which is incorporated in and made
part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject or usage. The Company shall approve the form of the
Securities and any notation, legend or endorsement on them. Each Security shall
be dated the date of its authentication.
SECTION 2.02. EXECUTION AND AUTHENTICATION
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue in the
aggregate principal amount of up to $5,000,000, upon a written order or orders
of the Company signed by an Officer of the Company. The order shall specify the
amount of Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $5,000,000, except as provided
in Section 2.07.
The Trustee shall act as the initial authenticating agent. Thereafter,
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. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
The Securities shall be issuable only in registered form without
coupons.
SECTION 2.03. REGISTRAR AND PAYING AGENT
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent"), and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co- Registrars and one or more additional Paying Agents. The
term "Registrar" includes any co-Registrar and the term "Paying Agent" includes
any additional Paying Agent. Except for purposes of Article 8, the Company or
any Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent, or agent for service
of notices and demands, or fails to give the foregoing notice, the Trustee shall
act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent,
and agent for service of notices and demands.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST
On or prior to each due date of the principal of or interest on any
Securities, the Company shall deposit with the Paying Agent a sum sufficient to
pay such principal or interest so becoming due. The Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities, and
shall notify the Trustee of any default by the Company (or any other obligor on
the Securities) in making any such payment. If the Company or an Affiliate of
the Company acts as Paying Agent, it shall on or before each due date of the
principal of or interest on any Securities segregate the money and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and the Trustee may at any time during the
continuance of any default, upon written request to a Paying Agent, require such
Paying Agent to forthwith pay to the Trustee all sums so held in trust by such
Paying Agent. Upon doing so, the Paying Agent (other than the Company) shall
have no further liability for the money.
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 on or before each interest payment date and at such other times
as the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE
When a Security is presented to the Registrar with a request to
register a transfer thereof, the Registrar shall register the transfer as
requested and when Securities are presented to the Registrar with a request to
exchange them for an equal principal amount of Securities of other authorized
denominations, the Registrar shall make the exchange as requested; provided that
every Security presented or surrendered for registration of transfer or exchange
shall be duly endorsed or be 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. To permit registration of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Securities at the Registrar's request. Any exchange or transfer
shall be without charge, except that the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto, but this provision shall not apply to any exchange pursuant to
Section 2.10, 3.06 or 9.05.
SECTION 2.07. REPLACEMENT SECURITIES
If a mutilated Security is surrendered to the Trustee, or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, and neither the Company nor the Trustee has received notice
that such Security has been acquired by a bona fide purchaser, the Company shall
issue and the Trustee shall authenticate a replacement Security if the
requirements of Section 8-405 of the New York Uniform Commercial Code, as in
effect on the date of this Indenture, are met, and there shall have been
delivered to the Company and the Trustee evidence to their satisfaction of the
loss, destruction or theft of any Security if such is the case. An indemnity
bond may be required that is sufficient in the judgment of the Company and the
Trustee to protect the Company, the Trustee or any Agent from any loss which any
of them may suffer if a Security is replaced. The Company may charge for its
expenses in replacing a Security. Every replacement Security is an additional
obligation of the Company.
SECTION 2.08. OUTSTANDING SECURITIES
Securities outstanding at any time are all Securities authenticated by
the Trustee, except for those canceled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on a redemption date or maturity date money sufficient to pay the
principal of and accrued interest on Securities payable on that date, then on
and after that date such Securities cease to be outstanding and interest on them
ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
SECTION 2.09. TREASURY SECURITIES
In determining whether the Holders of the required principal amount of
Securities have concurred in any notice, direction, waiver or consent,
Securities owned by the Company or any other obligor on the Securities or by any
Affiliate of the Company or of such other obligor shall be disregarded, except
that for purposes of determining whether the Trustee shall be protected in
relying on any such notice, direction, waiver or consent, only Securities which
the Trustee knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to the Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and, upon the order of the Company, 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. 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 and Paying Agent shall forward to the Trustee any
Securities surrendered to them for transfer, exchange, or payment. The Trustee
and no one else shall cancel all Securities surrendered for transfer, exchange,
payment (including redemption), or cancellation and shall dispose of cancelled
Securities as the Company shall direct. The Company may not issue new Securities
to replace Securities it has paid or delivered to the Trustee for cancellation
or which have been converted.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest to the persons who are Securityholders on a
subsequent special record date, and such term as used in this Section 2.12 with
respect to the payment of any defaulted interest, shall mean the fifteenth day
next preceding the special payment date fixed by the Company, whether or not
such day is a Business Day. At least 15 days before the special record date, the
Company shall mail to each Securityholder and the Trustee a notice that states
the special record date, the special payment date and the amount of defaulted
interest to be paid.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICE TO TRUSTEE.
If the Company wants to redeem Securities pursuant to paragraph 5 of
the Securities, it shall notify the Trustee at least 30 days prior to the
redemption date as fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee) of the redemption date and the principal amount of
Securities to be redeemed.
If the Company wants to reduce the principal amount of Securities to
be redeemed pursuant to paragraph 6 of the Securities, it shall notify the
Trustee at least 30 days prior to the redemption date (unless a shorter notice
shall be satisfactory to the Trustee) of the amount of the reduction and the
basis for it. If the Company wants to credit against any such redemption
Securities it has not previously delivered to the Trustee for cancellation, it
shall deliver the Securities with such notice.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed, the Trustee
shall, not more than 60 days prior to the redemption date, select the Securities
to be redeemed pro rata or by lot, as the Trustee in its discretion shall
determine. The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption. Securities in denominations of less
than $1,000 may only be redeemed in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations of $1,000 or more. 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 15 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first class mail to each Holder
of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the redemption date and the only remaining right of the Holder is
to receive payment of the redemption price upon surrender to the Paying
Agent of the Securities; and
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will
be issued.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and 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.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE
On or prior to the redemption date, the Company shall deposit with the
Paying Agent (or if the Company is its own Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest 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.
SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company
shall issue 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
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities and this Indenture. An
installment of principal or interest shall be considered paid on the date it is
due if the Paying Agent (other than the Company or an Affiliate of the Company)
holds on that date money designated for and sufficient to pay the installment.
The Company shall pay interest on overdue principal at the rate borne by the
Securities per annum; it shall pay interest on overdue installments of interest
at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS.
The Company shall file all reports and other information and documents
which it is required to file with the SEC pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and within 15
days after it files them with the SEC, the Company shall file copies of all such
reports, information and other documents with the Trustee. The Company will
cause any quarterly and annual reports which it mails to its stockholders to be
mailed to the Holders of the Securities.
If the Company is not subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act, the Company will prepare, for the first three
quarters of each fiscal year, quarterly financial statements substantially
equivalent to the financial statements required to be included in a report on
Form 10-QSB under the Exchange Act. The Company will also prepare, on an annual
basis, complete audited consolidated financial statements including, but not
limited to, a balance sheet, a statement of operations, a statement of
stockholders' equity, a statement of cash flows and all appropriate notes. All
such financial statements will be prepared in accordance with generally accepted
accounting principles consistently applied, except for changes with which the
Company's independent accountants concur, and except that quarterly statements
may be subject to year-end adjustments. The Company will cause a copy of such
financial statements to be filed with the Trustee and mailed to the Holders of
the Securities within 50 days after the close of each of the first three
quarters of each fiscal year and within 95 days after the close of each fiscal
year. The Company will also comply with the other provisions of TIA ' 314(a).
SECTION 4.03. WAIVER OF USURY DEFENSE.
The Company agrees that it will not assert, plead (as a defense or
otherwise) or in any manner whatsoever claim (and will actively resist any
attempt to compel it to assert, plead or claim) in any action, suit or
proceeding that the interest rate on the Securities violates present or future
usury or other laws relating to the interest payable on any indebtedness and
will not otherwise avail itself (and will actively resist any attempt to compel
it to avail itself) of the benefits or advantages of any such laws.
SECTION 4.04. COMPLIANCE CERTIFICATES.
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company, an Officer's Certificate as to the signer's
knowledge of the Company's compliance with all conditions and covenants on its
part contained in this Indenture and stating whether or not the signer knows of
any default or Event of Default. If such signer knows of such a default or Event
of Default, the Certificate shall describe the default or Event of Default and
the efforts to remedy the same. For the purposes of this Section 4.04,
compliance shall be determined without regard to any grace period or requirement
of notice provided pursuant to the terms of this Indenture. The Certificate need
not comply with Section 10.04 hereof.
SECTION 4.05. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all material taxes, assessments and
governmental charges levied or imposed upon the Company or upon the income,
profits or property of the Company; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment or charge whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which adequate
provision has been made.
SECTION 4.06. CORPORATE EXISTENCE.
Subject to Article 5, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and rights (charter and statutory); provided, however, that the
Company shall not be required to preserve any right if the Board of Directors
shall determine that the preservation is no longer desirable in the conduct of
the Company's business and that the loss thereof is not, and will not be,
adverse in any material respect to the Holders.
SECTION 4.07. SECURITIES PURCHASED IN PART.
Any Security that is to be purchased only in part shall be surrendered
at the office of the Paying Agent (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 such Xxxxxx's attorney duly authorized in writing), and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge, a new Security or Securities, of such
authorized denomination or denominations as may be requested by such Holder, in
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Security so surrendered that is not purchased.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with or merge with or into, or
transfer all or substantially all of its assets to, any person unless:
(a) either the Company shall be the resulting or surviving
entity or such person is a corporation organized and existing under the
laws of the United States, a State thereof or the District of Columbia,
such person expressly 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 (in
which case all such obligations of the Company shall terminate); and
(b) immediately before and immediately after giving effect to
such transaction and treating any indebtedness which becomes an
obligation of the Company as a result of such transaction as having
been incurred by the Company at the time of such transaction, no
default or Event of Default shall have occurred and be continuing.
The Company shall deliver to the Trustee prior to the proposed
transaction an Officer's Certificate and an Opinion of Counsel, each of which
shall comply with Section 10.04 and shall state that such consolidation, merger
or transfer and such supplemental indenture comply with this Article 5 and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.01,
the successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor corporation had been named as the
Company herein.
ARTICLE 6
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any
Security when the same becomes due and payable and the default
continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at maturity, upon
redemption or otherwise and the default continues for a period of five
days;
(3) the Company fails to comply with any of its other
agreements contained in the Securities or this Indenture and the
default continues for the period and after the notice specified below;
(4) the Company pursuant to or within the meaning of
any Bankruptcy Law
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property; or
(D) makes a general assignment for the benefit of
its creditors; or
(5) 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 or proceeding;
(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 in each case the order or decree remains unstayed and in
effect for 90 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, sequestrator or similar official under
any Bankruptcy Law.
A default under clause (3) is not an Event of Default until the
Trustee notifies the Company or the Holders of at least 25% in principal amount
of the Securities then outstanding notify the Company and the Trustee, of the
default, and the Company does not cure the default within 30 days after receipt
of such notice. The notice given pursuant to this Section 6.01 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.
Subject to the provisions of Sections 7.01 and 7.02, the Trustee shall
not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to a Trust Officer at the corporate trust office
of the Trustee by the Company, the Paying Agent, any Holder or an agent of any
Holder.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
Section 6.01(4) or (5)) occurs and is continuing, the Trustee may, by notice to
the Company, or the Holders of at least 25% in principal amount of the
Securities then outstanding may, by notice to the Company and the Trustee, and
the Trustee shall, upon the request of such Holders, declare all unpaid
principal of and accrued interest to the date of acceleration on the Securities
then outstanding (if not then due and payable) to be due and payable and upon
any such declaration, the same shall become and be immediately due and payable.
If an Event of Default specified in Section 6.01(4) or (5) occurs, all unpaid
principal and accrued interest on the Securities then outstanding shall IPSO
FACTO become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholder. The Holders of at least
two-thirds in principal amount of the Securities then outstanding by notice to
the Trustee may rescind an acceleration and its consequences if (i) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and (ii) all payments due to the Trustee and any
predecessor Trustee under Section 7.07 have been made. Anything herein contained
to the contrary notwithstanding, in the event of any acceleration pursuant to
this Section 6.02, the Company shall not be obligated to pay any premium which
it would have had to pay.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of the principal of 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 it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. WAIVER OF DEFAULTS AND EVENTS OF DEFAULT.
Subject to Sections 6.07 and 9.02, the Holders of at least two-thirds
in principal amount of the Securities then outstanding by notice to the Trustee
may waive an existing default or Event of Default and its consequences,
including a default in the payment of the principal of or interest on any
Security as specified in clauses (1) and (2) of Section 6.01. When a default or
Event of Default is waived, it is cured and ceases.
SECTION 6.05. CONTROL BY TWO-THIRDS.
The Holders of at least two-thirds in principal amount of the
Securities then outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that the Trustee determines
may be unduly prejudicial to the rights of another Securityholder, or that may
involve the Trustee in personal liability; provided that the Trustee may take
any other action deemed proper by the Trustee which is not inconsistent with
such direction.
SECTION 6.06. LIMITATION ON SUITS.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(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
outstanding 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;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(6) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
at least two-thirds in principal amount of the Securities then
outstanding.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
The right of any Holder of a Security to receive payment of the
principal of and interest on the Security, on or after the respective due dates
expressed in the Security, or to bring suit for the enforcement of any such
payment on or after such respective dates, is not absolute and may be impaired
or affected without the consent of the Holder if the Holders of at least
two-thirds in principal amount of Securities so approve such action.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in the payment of principal or interest
specified in Section 6.01(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 or any other obligor on the Securities for the whole amount of principal
and accrued interest remaining unpaid, together with interest on overdue
principal 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 borne by
the Securities and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. 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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company (or
any other obligor on the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceeding is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07, and to
the extent that such payment for the reasonable compensation, expenses,
disbursements and advances in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, monies, securities and other property
which the Securityholders may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or the Trustee to authorize 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 proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under
Section 7.07;
Second: to Securityholders for amounts due and unpaid
on the Securities for principal and interest, ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal and
interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defense made by the party litigant.
This Section 6.11 does not apply to a suit made by the Trustee, a suit by a
Holder pursuant to Section 6.06, or a suit by Holders of more than 10% in
principal amount of the Securities then outstanding.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in 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 as 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. The Trustee, however, shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(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; and
(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 6.05.
(d) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability, expense or fee.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(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
Officer's Certificate or an Opinion of Counsel, which shall conform to Section
10.04(b). The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Certificate or Opinion.
(c) The Trustee may act through its agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee may consult with counsel and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization and
protection in respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. 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 of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS OR EVENTS OF DEFAULT.
If a default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the default or Event of Default within 90 days after it occurs. Except in the
case of a default or an Event of Default in payment of the principal of or
interest on any Security, the Trustee may withhold the notice if and so long as
a committee of its Trust Officers in good faith determines that withholding the
notice is in the interest of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA ' 313(a). The
Trustee also shall comply with TIA ' 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed. The Company shall notify the Trustee
whenever the securities become listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust). The Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses may
include the reasonable compensation, disbursements and expenses of Trustee's
agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense incurred by it in connection with its
duties under this Indenture. The Trustee shall notify the Company promptly of
any claim asserted against the Trustee for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its written consent.
The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by it through its negligence
or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a senior claim to which the Securities are hereby made
subordinate on all money or property held or collected by the Trustee, except
such money or property held in trust to pay the principal of and interest on
particular Securities. The obligations of the Company under this Section 7.07 to
compensate or indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall be secured by a lien prior to that of
the Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders of particular
Securities. The obligation of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(4) and (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities then outstanding may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee with the
Company's written consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(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.
If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of 10% in principal amount of the Securities then outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
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. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, provided such transferee corporation
shall qualify and be eligible under Section 7.10.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of paragraphs (1), (2) and (5) of TIA ' 310. If at any time the
Trustee shall cease to satisfy any such requirements, it shall resign
immediately in the manner and with the effect specified in this Article 7. The
Trustee shall be subject to the provisions of TIA ' 310(b). Nothing herein shall
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA ' 310(b).
SECTION 7.11. Preferential Collection of Claims
AGAINST COMPANY.
The Trustee shall comply with TIA ' 311(a), excluding any creditor
relationship listed in TIA ' 311(b). A trustee who has resigned or been removed
shall be subject to TIA ' 311(a) to the extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.
The Company may terminate all of its obligations under the Securities
and this Indenture (except those obligations referred to in the immediately
succeeding paragraph) if 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 has theretofore been held in trust
and thereafter repaid to the Company, as provided in Section 8.03) have been
delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or if the Company irrevocably deposits in trust with
the Trustee money or U.S. Government Obligations maturing as to principal and
interest in such amounts and at such times as are sufficient, without
consideration of any reinvestment of such interest, to pay the principal of and
interest on the Securities then outstanding to maturity and to pay all other
sums payable by it hereunder.
The Company's obligations in paragraph 9 of the Securities and in
Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 7.07, 7.08 and 8.04 shall survive
until the Securities are no longer outstanding. Thereafter, the Company's
obligations in such paragraph 9 and in Section 7.07 shall survive.
After such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture, except for those surviving obligations specified
above.
"U.S. Government Obligations" means direct non-callable obligations
of, or non-callable obligations guaranteed by, the United States of America for
the payment of which guarantee or obligation the full faith and credit of the
United States is pledged.
SECTION 8.02. APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust, for the benefit of
the Holders, money or U.S. Government Obligations deposited with it pursuant to
Section 8.01, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of the
principal of and interest on the Securities.
SECTION 8.03. REPAYMENT TO COMPANY.
Subject to Section 8.01, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or U.S. Government
Obligations held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest that remains
unclaimed for two years after a right to such money has matured; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such payment, may at the expense of the Company cause to be published once
in a newspaper of general circulation in the City of New York or mail to each
Holder entitled to such money notice that such money remains unclaimed and that
after a date specified therein, which shall be at least 30 days from the date of
such publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company, Securityholders
entitled to money must look to the Company for payment as general creditors
unless otherwise prohibited by law.
SECTION 8.04. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.01 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 8.01 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with Section 8.01; provided, however,
that if the Company has made any payment of the principal of or interest on 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 any such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to or consent of any Securityholder:
(a) to comply with Sections 4.04 and 5.01;
(b) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
(c) to cure any ambiguity, defect or inconsistency, or to make
any other change that does not adversely affect the rights of any
Securityholder; or
(d) to comply with the provisions of the TIA.
SECTION 9.02. WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to any Securityholder but with the written consent
of the Holders of at least two-thirds in principal amount of the Securities then
outstanding. The Holders of at least two-thirds in principal amount of the
Securities then outstanding may waive compliance in a particular instance by the
Company with any provision of this Indenture or the Securities without notice to
any Securityholder. Subject to Section 9.04, without the consent of each
Securityholder affected, however, an amendment, supplement or waiver, including
a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of interest on any Security;
(3) reduce the principal of any Security; or
(4) make any Security payable in money other than that stated
in the Security.
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.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as in effect at the date of such amendment or
supplement.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Xxxxxx'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 his
Security or portion of a Security if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (4) of Section 9.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Xxxxxx's Security.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article 9 if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may but need not sign it. In signing or refusing to sign such amendment
or supplement, the Trustee shall be entitled to receive and, subject to Section
7.01 shall be fully protected in relying upon, an Opinion of Counsel stating
that such amendment or supplement is authorized or permitted by this Indenture.
The Company may not sign an amendment or supplement until the Board of Directors
approves it.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the TIA through
operation of Section 318(c) thereof, such imposed duties shall control.
SECTION 10.02. NOTICES.
Any notice or communication shall be given in writing and delivered in
person or mailed by certified or registered mail, return receipt requested,
addressed as follows:
if to the Company:
IGENE Biotechnology, Inc.
0000 Xxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
if to the Trustee:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Such notices or communications shall be effective when received.
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 mailed to a Securityholder shall be mailed
by first-class mail to him at his address 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 a notice or communication to a Securityholder is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
SECTION 10.03. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ' 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 ' 312(c).
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.
(a) 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
at the request of the Trustee:
(1) an Officer's Certificate stating that, in the
opinion of the signer, all conditions precedent (including any
covenants compliance with which constitutes a condition precedent), if
any, provided for in this Indenture relating to the proposed action
have been complied with; and
(2) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent (including any
covenants compliance with which constitutes a condition precedent) have
been complied with.
(b) Each Officer's Certificate and Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture (other
than annual certificates provided pursuant to Section 4.05 hereof) shall
include:
(1) a statement that the person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(3) a statement that, in the opinion of such person,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion
of such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion of
Counsel may rely on an Officer's Certificate or certificates of public
officials.
SECTION 10.05. Record Date for Vote or Consent of
SECURITYHOLDERS.
The Company may set a record date for purposes of determining the
identity of Securityholders entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture, which record date shall be
the later of 10 days prior to the first solicitation of such vote or consent or
the date of the most recent list of Securityholders furnished to the Trustee
pursuant to Section 2.05 hereof prior to such solicitation. If a record date is
fixed, those persons who were Holders of Securities at such record date (or
their duly designated proxies), and only those persons, shall be entitled to
take such action by vote or consent or to revoke any vote or consent previously
given, whether or not such persons continue to be Holders after such record
date.
SECTION 10.06. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules for its
functions.
SECTION 10.07. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which state or
Federally chartered banking institutions in New York, New York are not required
to be open. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 10.08. 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 10.09. No Adverse Interpretation of Other
AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
SECTION 10.10. NO RECOURSE AGAINST OTHERS.
All liability described in paragraph 15 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
SECTION 10.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 10.12. MULTIPLE COUNTERPARTS.
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent the same agreement.
SECTION 10.13. SEPARABILITY.
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.
SECTION 10.14. TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
as of the __ day of ____________, 1998.
IGENE Biotechnology, Inc.
By:_____________________
Name:
Title:
[SEAL]
Attest:_________________
Secretary
American Stock Transfer &
Trust Company
as Trustee
By______________________
Name:
Title:
EXHIBIT A
[FACE OF SECURITY]
Number $
IGENE Biotechnology, Inc.
8% Notes due _____________, 2003
IGENE Biotechnology, Inc., a Maryland corporation promises to pay to
or registered assigns the principal sum of ________________ on ________________,
2003.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated:
IGENE Biotechnology, Inc.
By:____________________
By:____________________
(Seal)
Certificate of Authentication:
This is one of the Securities referred
to in the within mentioned Indenture.
American Stock Transfer & Trust Company,
as Trustee,
By:____________________
Authorized Signatory
[REVERSE SIDE]
1. INTEREST.
IGENE Biotechnology, Inc., a Maryland corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate per
annum shown above. The Company shall pay interest at its option either annually
on ____________ of each year or at maturity. Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the date of first issuance of the Notes under the Indenture (as
defined below); provided that, if there is no existing default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding interest payment date, interest shall
accrue from such interest payment date. 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 this Note (except defaulted interest)
to the person who is the registered holder of this Note at the close of business
on the record payment date established by the Company. The holder must surrender
this Note to the Paying Agent to collect payment of principal. The Company will
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. The Company,
however, may pay principal and interest by its check payable in such money. It
may mail an interest check to the holder's registered address.
3. PAYING AGENT AND REGISTRAR.
Initially, American Stock Transfer & Trust Company (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to the Holders. The Company may act as Paying Agent
or Registrar.
4. INDENTURE, LIMITATIONS.
The Company issued this Note under an Indenture dated as of
______________, 1998 (the "Indenture"), between the Company and the Trustee. The
terms of this Note include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. "
77aaa-77bbbb), as amended by the Trust Indenture Reform Act of 1990 and as in
effect on the date of the Indenture. This Note is subject to all such terms, and
the holder of this Note is referred to the Indenture and said Act for a
statement of them. The Notes are general unsecured obligations of the Company
limited to up to $5,000,000 aggregate principal amount.
5. OPTIONAL REDEMPTION.
The Notes may be redeemed, at the Company's option, in whole or in
part at any time and from time to time at the principal amount thereof, together
with accrued interest to the date fixed for redemption.
6. MANDATORY REDEMPTION.
The Company will redeem on April 15, 1999 and on each April 15
thereafter a principal amount of Notes issued under the Indenture at a
redemption price of 100% of the principal amount, plus accrued interest to the
redemption date, in an amount equal to 25% of the Company's net earnings for its
prior fiscal year determined in accordance with generally accepted accounting
principles, plus any applicable tax savings, as determined by the Company's
independent accountants (which determination shall be binding and conclusive on
the Company and the Holders). The Company may reduce the principal amount of
Notes required to be redeemed pursuant to this paragraph 6 by subtracting 100%
of the principal amount of any Notes acquired by the Company and delivered to
the Trustee for cancellation or redeemed otherwise than pursuant to this
paragraph 6. The Company may so subtract the same Note only once.
Notwithstanding anything to the contrary contained herein, the Holders of at
least two-thirds in principal amount of the Notes may waive or eliminate the
redemption obligation pursuant to this paragraph 6.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first class mail at least 15
days but not more than 60 days before the redemption date to each holder of
Notes to be redeemed at his registered address. On and after the redemption date
interest ceases to accrue on Notes or portions of them called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form without coupons. A holder may
register the transfer of or exchange Notes in accordance with the Indenture. The
Registrar may require a holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes or other governmental
charges that may be imposed by law or permitted by the Indenture.
9. PERSONS DEEMED OWNERS.
The registered holder of a Note may be treated as the owner of it for
all purposes.
10. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent will pay the money back to the
Company at its request. After that, holders entitled to money must look to the
Company for payment.
11. AMENDMENT, SUPPLEMENT, WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the holders of at least two-thirds
in principal amount of the Notes then outstanding and any past default or
compliance with any provision may be waived in a particular instance with the
consent of the holders of at least two-thirds in principal amount of the Notes
then outstanding. Without the consent of or notice to any Holder, the Company
and the Trustee may amend or supplement the Indenture or the Notes to, among
other things, provide for uncertificated Notes in addition to or in place of
certificated Notes, or to cure any ambiguity, defect or inconsistency or make
any other change that does not adversely affect the rights of any Holder.
12. SUCCESSOR CORPORATION.
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor corporation will
be released from those obligations.
13. DEFAULTS AND REMEDIES.
An Event of Default is: default for 30 days in payment of interest on
the Notes; default for 5 days in payment of principal on the Notes; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Indenture or the Notes; and certain events of bankruptcy or
insolvency of the Company. If an Event of Default (other than as a result of
certain events of bankruptcy or insolvency), occurs and is continuing, the
Trustee or the holders of at least 25% in principal amount of the Notes then
outstanding may declare all unpaid principal of and accrued interest to the date
of acceleration on the Notes then outstanding to be due and payable immediately,
all as and to the extent provided in the Indenture. If an Event of Default
occurs as a result of certain events of bankruptcy or insolvency, all unpaid
principal of and accrued interest on the Notes then outstanding shall become due
and payable immediately without any declaration or other act on the part of the
Trustee or any Holder, all as and to the extent provided in the Indenture.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, holders of
at least two-thirds in principal amount of the Notes then outstanding may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company is required to file periodic reports with the Trustee as
to the absence of default.
14. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or an Affiliate of the Company, and may otherwise deal with the Company
or an Affiliate of the Company, as if it were not Trustee.
15. 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 Notes
or the Indenture or for any claim based on, in respect or by reason of, such
obligations or their creation. The holder of this Note by accepting this Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of this Note.
16. DISCHARGE PRIOR TO MATURITY.
If the Company deposits with the Trustee or Paying Agent money or U.S.
Government Obligations sufficient to pay the principal of and interest on the
Notes to maturity, the Company will be discharged from the Indenture except for
certain Sections thereof.
17. AUTHENTICATION.
This Note shall not be valid until the Trustee or an authenticating
agent signs the certificate of authentication on the other side of this Note.
18. ABBREVIATIONS AND DEFINITIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM ( = tenants in common), TEN ENT ( = tenants by the
entireties), JT TEN ( = joint tenants with right of survivorship and not as
tenants in common), CUST ( = Custodian) and U/G/M/A ( = Uniform Gifts to Minors
Act).
All capitalized terms used in this Note and not specifically defined
herein are defined in the Indenture and are used herein as so defined.
19. INDENTURE TO CONTROL.
In the case of any conflict between the provisions of this Note and
the Indenture, the provisions of the Indenture shall control.
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Requests may be made to: IGENE
Biotechnology, Inc., 0000 Xxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Secretary.
