Indenture - ICN Pharmaceuticals Inc. and American Stock Transfer & Trust Co.
ICN PHARMACEUTICALS, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS TRUSTEE
-----------------------------
INDENTURE
DATED AS OF NOVEMBER 18, 1994
-----------------------------
$ 115,000,000
8-1/2% CONVERTIBLE SUBORDINATED NOTES DUE 1999
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<PAGE>
CROSS-REFERENCE TABLE
TRUST INDENTURE ACT SECTION SECTION OF INDENTURE
--------------------------- --------------------
310(a)(1) and (2) ...................................... 9.10
310(a)(3) and (4) ...................................... Not applicable
310(b) ................................................. 9.08 and 9.10, 16.03
310(c) ................................................. Not applicable
311(a) and (b) ......................................... 9.11
311(c) ................................................. Not applicable
312(a) ................................................. 2.05
312(b) and (c) ......................................... 16.07
313(a) ................................................. 9.06
313(b)(1) .............................................. Not applicable
313(b)(2) .............................................. 9.06
313(c) ................................................. 9.06 and 16.03
313(d) ................................................. 9.06
314(a) ................................................. 6.12 and 16.03
314(b) ................................................. Not applicable
314(c)(1) and (2) ...................................... 16.04
314(c)(3) .............................................. Not applicable
314(d) ................................................. Not applicable
314(e) ................................................. 16.04
314(f) ................................................. Not applicable
315(a), (c) and (d) .................................... 9.01
315(b) ................................................. 9.05; 16.03
315(e) ................................................. 8.11
316(a)(1) .............................................. 8.04 and 8.05
316(a)(2) .............................................. Not applicable
316(a) last sentence ................................... 10.03
316(b) ................................................. 8.07
316(c) ................................................. 10.04
317(a) ................................................. 8.08 and 8.09
317(b) ................................................. 2.05
318(a) ................................................ 16.06
This Cross-Reference Table shall not, for any purpose, be deemed to be a part of
this Indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
PARTIES 1
RECITALS 1
ARTICLE ONE.
DEFINITIONS.
SECTION 1.01 Definitions ........................................... 1
SECTION 1.02 Other Definitions ..................................... 7
SECTION 1.03 Incorporation by Reference of Trust Indenture Act...... 7
SECTION 1.04 Rules of Construction ................................. 8
ARTICLE TWO.
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND
EXCHANGE OF SECURITIES.
SECTION 2.01 Dating- Incorporation of Form in Indenture ............ 9
SECTION 2.02. Execution and Authentication .......................... 9
SECTION 2.03. Registrar and Agents .................................. 10
SECTION 2.04. Holders to be Treated as Owners; Payment of ........... 10
SECTION 2.05, Paying Agent to Hold Money in Trust ................... 11
SECTION 2.06. Securityholder Lists .................................. 11
SECTION 2.07. Transfer and Exchange ................................. 11
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Securities ....... 12
SECTION 2.09. Temporary Securities .................................. 13
SECTION 2.10. Cancellation of Securities ............................ 13
SECTION 2.11. Benefits of Indenture Provisions ...................... 14
SECTION 2.12. Defaulted Interest .................................... 14
SECTION 2.13. CUSIP Number .......................................... 14
ARTICLE THREE.
REDEMPTION OF SECURITIES
SECTION 3.01. Redemption Prices ..................................... 14
SECTION 3.02. Notice of Redemption; Selection of Securities ......... 15
SECTION 3.03. Payment of Securities on Redemptions; Deposit of
Redemption Price....................................... 16
<PAGE>
ARTICLE FOUR.
SUBORDINATION OF SECURITIES.
SECTION 4.01. Agreement that Securities to Be Subordinate ........... 17
SECTION 4.02. Liquidation; Dissolution; Bankruptcy .................. 17
SECTION 4.03. Company Not to Make Payments with Respect
to Securities in Certain Circumstances................. 18
SECTION 4.04. Payment Over of Proceeds in Certain Events ............ 19
SECTION 4.05. No Waiver of Subordination Provisions ................. 20
SECTION 4.06. Notice to Trustee of Specified Events; Reliance on
Certificate or Liquidating Agent....................... 20
SECTION 4.07. Subrogation ........................................... 20
SECTION 4.08. Obligation to Pay Not Impaired ........................ 21
SECTION 4.09. Reliance by Senior Indebtedness on Subordination
Provisions............................................. 21
SECTION 4.10. Subordination Not to Be Prejudiced by Certain Acts .... 21
SECTION 4.11. Trustee Authorized to Effectuate Subordination ........ 21
SECTION 4.12. Trustee's Relationship to Senior Indebtedness ......... 22
SECTION 4.13. Trustee and Paying Agents Not Chargeable with
Knowledge Until Notice................................. 22
SECTION 4.14. Article Applicable to Paying Agents ................... 22
SECTION 4.15. Trustee's Compensation Not Prejudiced ................. 22
ARTICLE FIVE.
CONVERSION OF SECURITIES.
SECTION 5.01. Conversion Privilege; Conversion Price ................ 23
SECTION 5.02. Manner of Exercising Conversion Privilege ............. 23
SECTION 5.03. Fractional Shares ..................................... 24
SECTION 5.04. Adjustment of Conversion Price ........................ 24
SECTION 5.05. Certificate Concerning Adjusted Conversion Price ...... 28
SECTION 5.06. Notice of Certain Corporate Action .................... 28
SECTION 5.07. Company to Provide Stock .............................. 29
SECTION 5.08. Taxes on Conversions .................................. 29
SECTION 5.09. Covenant as to Stock .................................. 30
SECTION 5.10. Provision in Case of Consolidation or Merger .......... 30
SECTION 5.11. Trustee's Disclaimer of Responsibility for Certain
Matters ............................................... 30
<PAGE>
ARTICLE SIX.
PARTICULAR COVENANTS OF THE COMPANY.
SECTION 6.01. Payment of Principal, Premium and Interest ............ 31
SECTION 6.02. Offices for Notices, Payments and Conversions ......... 31
SECTION 6.03. Paying Agents ......................................... 32
SECTION 6.04. Annual Review Certificate ............................. 32
SECTION 6.05. Appointment to Fill a Vacancy in Office of Trustee .... 33
SECTION 6.06. Further Instruments and Acts .......................... 33
SECTION 6.07. Payment of Taxes and Assessments ...................... 33
SECTION 6.08. Maintenance of Corporate Existence .................... 33
SECTION 6.09. Change of Control ..................................... 34
SECTION 6.10. Waiver of Stay or Extension Laws ...................... 36
SECTION 6.11. SEC Reports ........................................... 36
<PAGE>
ARTICLE SEVEN.
[Intentionally Omitted]
ARTICLE EIGHT
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT.
SECTION 8.01. Events of Default ..................................... 37
SECTION 8.02. Acceleration .......................................... 38
SECTION 8.03. Other Remedies ........................................ 39
SECTION 8.04. Waiver of Defaults and Events of Default .............. 39
SECTION 8.05. Control by Majority ................................... 39
SECTION 8.06. Limitation on Suits ................................... 39
SECTION 8.07. Rights of Holders to Receive Payment .................. 40
SECTION 8.08. Collection Suit by Trustee ............................ 40
SECTION 8.09. Trustee May File Proofs of Claim ...................... 40
SECTION 8.10. Application of Money Collected by Trustee ............. 41
SECTION 8.11. Undertaking to Pay Costs .............................. 41
SECTION 8.12. Restoration of Rights and Remedies .................... 42
SECTION 8.13. Rights and Remedies Cumulative ........................ 42
SECTION 8.14. Delay or Omission Not Waiver .......................... 42
ARTICLE NINE.
CONCERNING THE TRUSTEE.
SECTION 9.01. Duties of Trustee ..................................... 42
SECTION 9.02. Rights of Trustee ..................................... 43
SECTION 9.03. Individual Rights of Trustee .......................... 44
0159"2.07
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SECTION 9.04. Trustee's Disclaimer .................................. 44
SECTION 9.05. Notice of Defaults .................................... 44
SECTION 9.06. Reports by Trustee to Holders ......................... 44
SECTION 9.07. Compensation and Indemnity ............................ 44
SECTION 9.08. Replacement of Trustee ................................ 45
SECTION 9.09. Successor Trustee by Merger, etc ...................... 46
SECTION 9.10. Eligibility; Disqualification ......................... 46
SECTION 9.11. Preferential Collection of Claims Against Company ..... 46
ARTICLE TEN.
CONCERNING THE SECURITYHOLDERS.
SECTION 10.01. Action by Securityholders .............................. 46
SECTION 10.02. Proof of Execution by Securityholders, Evidence of
Holdings ............................................... 47
SECTION 10.03. Company-owned Securities Disregarded ................... 47
SECTION 10.04. Revocation of Consents, Future Holders Bound ........... 47
ARTICLE ELEVEN.
SECURITYHOLDERS' MEETINGS.
SECTION 11.01. Purposes of Meetings ................................... 48
SECTION 11.02. Call of Meetings by Trustee ............................ 48
SECTION 11.03. Call of Meetings by Company or Securityholders ......... 48
SECTION 11.04. Qualifications for Voting .............................. 48
SECTION 11.05. Regulations ............................................ 49
SECTION 11.06. Voting ................................................. 49
SECTION 11.07. No Delay of Rights by Meeting .......................... 50
ARTICLE TWELVE.
SUPPLEMENTAL INDENTURES.
SECTION 12.01. Supplemental Indenture Without . Consent of
Securityholders ........................................ 50
SECTION 12.02. Supplemental Indentures with Consent of
Securityholders ........................................ 51
SECTION 12.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures ................................ 52
SECTION 12.04. Notation on Securities ................................. 52
SECTION 12.05. Evidence of Compliance of Supplemental Indenture to
Be Furnished Trustee ................................... 52
ARTICLE THIRTEEN.
CONSOLEDATION, MERGER AND SALE BY THE COMPANY.
SECTION 13.01. When Company May Merge, Etc ................... 53
SECTION 13.02. Successor Corporation Substituted ............. 53
ARTICLE FOURTEEN.
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS.
SECTION 14.01. Discharge of Indenture ................................ 53
SECTION 14.02. Deposited Moneys to Be Held in Trust by Trustee ....... 54
SECTION 14.03. Paying Agent to Repay Moneys Held ..................... 54
SECTION 14.04. Unclaimed Moneys ...................................... 54
SECTION 14.05. Reinstatement ......................................... 55
ARTICLE FIFTEEN
.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS.
SECTION 15.01. Indenture and Securities Solely Corporate
Obligations ............................................ 55
ARTICLE SIXTEEN.
MISCELLANEOUS PROVISIONS.
SECTION 16.01. Provisions Binding on Company's Successors ............ 56
SECTION 16.02. Official Acts by Successor Corporation ................ 56
SECTION 16.03. Notices ............................................... 56
SECTION 16.04. Evidence of Compliance with Conditions Precedent ...... 56
SECTION 16.05. Legal Holidays ........................................ 57
SECTION 16.06. Trust Indenture Act to Control ........................ 57
SECTION 16.07. Communications by Holders with Other Holders .......... 57
SECTION 16.08. Governing Law ......................................... 57
SECTION 16.09 Table of Contents ..................................... 57
SECTION 16.10 Execution in Counterparts ............................. 58
SIGNATURES ............................................................. 58
EXHIBIT A - FORM OF SECURITY
<PAGE>
THIS INDENTURE, dated as of November 18, 1994 between ICN Pharmaceuticals,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (formerly known as ICN Merger Corp. and hereinafter sometimes referred
to as the "Company"), and American Stock Transfer & Trust Company, as trustee
(the "Trustee").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issue of its 8-1/2% Convertible Subordinated Notes Due 1999 (hereinafter
sometimes referred to as the "Securities"), in the aggregate principal amount of
up to $115,000,000 and, to provide the terms and conditions upon which the
Securities are to be authenticated, issued and delivered, the Company has duly
authorized the execution of this Indenture; and
AND WHEREAS, all acts and things necessary to make the Securities, when
executed by the Company and authenticated and delivered by the Trustee or its
authorized signatory as in this Indenture provided, and issued, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Securities have in
all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Securities
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises, of the purchases and acceptance of the Securities by the holders
thereof and for other good and valuable consideration, the receipt whereof is
hereby acknowledged, the Company covenants and agrees with the Trustee for the
equal and proportionate benefit of the respective holders from time to time of
the Securities, as follows:
ARTICLE ONE.
DEFINITIONS.
SECTION 1.01. Definitions. The terms in this section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section 1.01. All other terms used in
this Indenture which are defined in the TIA, as amended, or which are by
reference therein defined in the Securities Act of 1993, as amended (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in the TIA and in said Securities
Act as in force as of the date of this Indenture.
"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, the
term "control" when used with respect to any person means the power, directly or
indirectly, alone or together with others, to direct or cause the direction of
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, co-registrar
or agent for service of notices and demands.
"Board of Directors" means the Board of Directors of the Company, the
executive committee, if any, of such Board of Directors or any committee of such
Board of Directors authorized to act on behalf of such Board of Directors with
respect to the Indenture.
"Business Day" means any day on which the banks in New York, New York or
Los Angeles, California are not authorized or required to be closed and on which
the New York Stock Exchange is open for trading and which is not a Saturday or
Sunday.
"Capital Stock" means, with respect to any person, any and all shares,
interests, participations, warrants, options or other equivalents (however
designated) of corporate stock or any other equity interest of such person.
A "Change of Control" shall occur when (i) the stockholders of the Company
adopt a plan of liquidation with respect to the Company or the Company sells,
transfers, leases or otherwise disposes of, in one transaction or series of
related transactions, leases or otherwise disposes of, in one transaction or
series of related transactions, all or substantially all of its assets; (ii)
there shall be consummated any consolidation or merger of the Company (1) in
which the Company is not the continuing or surviving corporation or (2) pursuant
to which the Common Stock would be converted into cash, securities or other
property, in each case, other than a consolidation or merger of the Company in
which the holders of the Common Stock immediately prior to the consolidation or
merger have, directly or indirectly, at least a majority of the total voting
power of all classes of Capital stock of the continuing or surviving corporation
immediately after such consolidation or merger; (iii) a majority of the Board of
Directors are not continuing Directors; or (iv) any person, or any persons
acting together which would constitute a "group" for purposes of Section 13(d)
of the Exchange Act, together with any Affiliate thereof shall beneficially own
(as defined in Rule 13d-3 of the Exchange Act), at least 50% of the total voting
power of all classes of Capital Stock of the Company entitled to vote generally
in the election of directors of the Company.
2
<PAGE>
"Common Stock" includes any stock of any class of the Company which has 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 is not subject to redemption by the Company. However, subject to the
provisions of Section 5.10, shares issuable on conversion of Securities shall
include only shares of the class designated as Common Stock, par value $.Ol per
share, of the Company at the date of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company.
"Company" means ICN Pharmaceuticals, Inc., a Delaware corporation (formerly
known as ICN Merger Corp.), and, subject to the terms of the Indenture, shall
include its successors and assigns.
"Continuing Director" means as at any date a member of the Board of
Directors of the Company who (i) was a member of the Board of Directors of the
Company on the Issuance Date or (ii) was nominated for election or elected to
the Board of Directors of the Company with the affirmative vote of at least a
majority of the directors who were Continuing Directors at the time of such
nomination or election (which may be done by approval of the proxy statement in
which such member was named as a nominee for director of the Company).
"corporation" means any corporation, voluntary association, joint stock
association, business trust, or similar organization designated.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at 40 Wall
Street, 46th Floor, New York, New York 10005, attention: Corporate Trust
Administration.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Capital Stock" means, with respect to any person, any Capital
Stock Of such Person that, by its terms (or by the terms of any security into
which it is convertible or for which it is exercisable, redeemable or
exchangeable), matures, or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the maturity of the Securities.
"Event of Default" means any event specified in Section 8.01, continued for
the period of time, if any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
3
<PAGE>
"Indebtedness" means with respect to any person, any of the following
(without duplication): (i) the principal of, premium, if any, and interest on
and all other amounts owing with respect to any indebtedness (including any such
indebtedness representing any deferred payment obligation for the payment of the
purchase price of property or assets) of such person for money borrowed or
evidenced by bonds, notes, securities or similar obligations, including any
guaranty by such person of any indebtedness for money borrowed of any other
person, whether any such indebtedness or guaranty is outstanding on the date of
the Indenture or is thereafter created, assumed or incurred, (ii) the principal
of, premium, if any, and interest on and all other amounts owing with respect to
any indebtedness for money borrowed, incurred, assumed or guaranteed by such
person in connection with the acquisition by it or any of its subsidiaries of
any other businesses, properties or other assets, (iii) lease obligations which
such person capitalizes in accordance with generally accepted accounting
principles, (iv) any amounts payable by such person under or in respect of
letters of credit or bankers' acceptances issued for the account of such person,
any interest exchange agreement, interest rate swap agreement or currency
exchange or purchase agreements or other similar agreement entered into in
respect of all or any portion of the above and (v) guarantees or assumptions by
such person of indebtedness of others of any of the kinds referred to in clauses
(i) through (iv) above.
"Indenture" means this instrument as originally executed or, if amended or
supplemented as herein provided, as so amended or supplemented.
"Independent Public Accountants" means any firm of certified public
accountants of recognized national standing which is selected by the Board of
Directors and is in fact independent.
"Issuance Date" means the date of original issuance of the Securities.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary or the Controller of the Company.
"Officers' Certificate" when used with respect to the Company, shall mean a
certificate signed by any two Officers or by an Officer and by any Assistant
Treasurer or any Assistant Secretary of the Company. Each such certificate shall
include the statements provided for in Section 16.04 if and to the extent
required by the provisions of such Section.
"Opinion of Counsel" means an opinion in writing, signed by legal counsel
who may be an employee of, or of counsel to, the Company or may be other
counsel, any such counsel to be satisfactory to the Trustee. Each such opinion
shall include the statements provided for in Section 16.04 if and to the extent
required by the provisions of such Section.
4
<PAGE>
"Outstanding," when used with referenda to Securities, shall, subject to
the provisions of Section 10.03, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities or the payment or redemption of which moneys in the
necessary amounts shall have been deposited in trust with the Trustee or with
any Paying Agent (other than the Company), provided that if such Securities are
to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as in Article Three provided or provision satisfactory to the
Trustee shall have been made for giving such notice; and
(c) Securities in lieu of or in substitution for which other Securities
shall have been authenticated and delivered or Securities which have been paid
pursuant to the terms of Section 2.08;
provided that holders of Securities which cease to be outstanding by reason
of clause (b) alone shall nevertheless be entitled to convert the same or any
portion thereof until and including but not after the close of business on the
fifth Business Day prior to the date fixed for redemption.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Permitted Junior Securities" means any securities provided for by a plan
of reorganization or readjustment authorized by a court of competent
jurisdiction in a reorganization proceeding in which the rights of holders of
Senior Indebtedness are not altered without the consent of such holders, which
consent is deemed to have been given if such holders, individually or as a
class, approve such plan.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price", when used with respect to any Securities to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed hereto as Exhibit A.
"Responsible Officer," when used with respect to the Trustee, means an
officer of the Trustee within the corporate trust department, including any vice
president or trust officer of the Trustee and also means, with respect to a
particular corporate trust matter, any other officer to whom such corporate
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
015942.07 5
<PAGE>
"Securities" means the securities that are authenticated and delivered
under this Indenture.
"Securityholder" or "Holder" or other similar terms, means any person in
whose name a particular Security shall be registered on the books of the Company
kept for that purpose in accordance with the terms hereof.
"SEC" means the Securities and Exchange Commission.
"Senior Indebtedness" means Indebtedness of the Company whether outstanding
on the Issuance Date or thereafter created, incurred, assumed or guaranteed
(including, without limitation, interest that accrues on or after the filing of
a petition in bankruptcy or for reorganization, if a claim for post-petition
interest is allowed in such proceeding) except (i) any Indebtedness outstanding
after the date of the Indenture as to which, by the express terms of the
instrument creating or evidencing the same, it is provided that such
Indebtedness is not senior or superior in right of payment to the Securities,
(ii) the Securities, (iii) any repurchase, redemption or other obligation in
respect of Disqualified Capital Stock, (iv) any Indebtedness of the Company to
any Subsidiary or to any Affiliate of the Company or any of the Subsidiaries,
(v) Indebtedness incurred in connection with the purchase of goods, assets,
materials or services in the ordinary course of business or representing amounts
recorded as accounts payable, trade payable or other current liabilities of the
Company on the books of the Company (other than the current portion of any
long-term Indebtedness of the Company that but for this clause (V) would
constitute Senior Indebtedness), (vi) any Indebtedness of or amount owned by the
Company to employees for services rendered to the Company, and (vii) any
liability for federal, state, local or other taxes owing or owed by the Company.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X
promulgated by the Commission as in effect on the Issuance Date.
"Subsidiary" means a corporation of which 50% or more of the issued and
outstanding stock entitled to vote for the election of directors (otherwise than
by reason of default in dividends) is at the time owned or controlled, directly
or indirectly, by the Company.
"Trustee" means American Stock Transfer & Trust Company and, subject to the
provisions of Article Nine hereof, shall also include its successors and assigns
as Trustee hereunder.
"TIA" means the Trust Indenture Act of 1939, as amended, as it was in force
as of the date of this Indenture, and with respect to each supplemental
indenture hereto, as it was in force as of the date of such supplemental
indenture.
0159482.07 6
<PAGE>
SECTION 1.02. Other Definitions.
TERM DEFINED IN SECTION
---- ------------------
"Bankruptcy Law" 8.01
"Change of Control Repurchase Date" 6.09
"Change of Control Repurchase Price" 6.09
"Conversion Agent" 2.03
"Current Market Price" 5.04
"Custodian" 8.01
"Event of Default" 8.01
"Non-payment Default" 4.03
"Paying Agent" 2.03
"Payment Blockage Period" 4.03
"Payment Default" 4.03
"Registrar" 2.03
"Senior Representative" 4.03
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
The following terms used in the TIA to the extent applicable to 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 indenture securities.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule have the meanings
assigned to them by such definitions.
7
<PAGE>
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;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and 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.
8
<PAGE>
ARTICLE TWO.
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND
EXCHANGE OF SECURITIES.
SECTION 2.01. Dating; Incorporation of Form in Indenture.
The Securities and the Trustee's certificate of authentication, with
respect thereto, shall be substantially in the form of Exhibit A, which is
annexed hereto and which is incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rules, 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. The terms and provisions contained in the Securities shall
constitute, and are expressly made, a part of this Indenture.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature.
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
nevertheless be valid.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. Such 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 $100,000,000, and such additional principal
amount, if any, as shall be determined pursuant to the next sentence of this
Section 2.02, upon the execution of the Indenture and a written order or orders
of the Company signed by two Officers or by an Officer and an Assistant
Treasurer of the Company. Upon receipt by the Trustee of an Officer's
Certificate stating that Wertheim Schroder & Co. Incorporated, Jefferies &
Company, Inc. and Kemper Securities, Inc. (the "Underwriters") have elected to
purchase from the Company a specified aggregate principal amount of additional
Securities, not to exceed $15,000,000 pursuant to Section 2 of the Underwriting
Agreement, dated November 10, 1994, among the Company and Wertheim Schroder &
Co. Incorporated, as representative of the Underwriters, the Trustee shall
authenticate and deliver such specified aggregate principal amount of additional
Securities to or upon the written order of the Company signed as provided in the
immediately preceding sentence. Such Officer's Certificate may be received by
the Trustee no later than December 20, 1994, and in any event at least two full
Business Days prior to the proposed date for delivery of such additional
Securities. The aggregate principal amount of Securities outstanding at any time
may not exceed that amount except as provided in Section 2.07. .
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The Trustee may appoint an authenticating agent 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.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 principal amount and any integral multiple
thereof.
SECTION 2.03. Registrar and Agents.
The Company shall maintain in the Borough of Manhattan, The City of New
York, 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"), an office or agency where Securities
may be presented for conversion ("Conversion 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, one or more additional Paying Agents and one or more additional
Conversion Agents. The Company or any Subsidiary may act as Registrar,
co-Registrar, Paying Agent and/or Conversion Agent. The term "Paying Agent"
includes any additional Paying Agent and the term "Conversion Agent" includes
any additional Conversion Agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar 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 such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 9.07.
The Company initially appoints the Trustee as a Registrar, a Paying Agent,
a Conversion Agent and agent for service of notices and demands.
SECTION 2.04. Holders to be Treated as Owners, Payment of Interest.
(a) The Company, the Paying Agent, the Registrar, the Trustee and any
agent of the Company, the Paying Agent, the Registrar or the Trustee may deem
and treat the person in whose name any Security is registered as the absolute
owner of such Security for the purpose of receiving payment of or on account of
the principal of and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the Company, the Paying
Agent, the Registrar nor the Trustee nor any agent of the Company, the Paying
Agent, the Registrar or the Trustee shall be affected by any notice to the
contrary. All such payments so made to any such Person,
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or upon his order, shall be valid, satisfy and discharge the liability for
moneys payable upon any Security.
(b) The Person in whose name any Security is registered at the close of
business on any record date with respect to any Interest Payment Date shall be
entitled to receive the interest, if any, payable on such Interest Payment Date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such Interest Payment Date, except if and to the extent
the Company shall default in the payment of the interest due on such Interest
Payment Date, in which case such defaulted interest shall be paid in accordance
with Section 2.12. The term "record date" as used with respect to any interest
payment date for the Securities shall mean the date specified as such in the
terms of the Securities.
SECTION 2.05. Paying Agent to Hold Money in Trust.
On or prior to each interest payment date or date on which payment of
principal of the Securities is required, the Company shall provide immediately
available funds to the Trustee acting as Paying Agent or with other Paying
Agents upon notice to the Trustee a sum sufficient to pay such principal and
interest so becoming due. The Company shall require each Paying Agent other than
the Trustee to agree in writing that it 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 interest on the Securities and to 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 a Subsidiary 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 payment 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 2.06. 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
the holders of Securities. If the Trustee is not the Registrar, the Company or
other obligor, if any, shall furnish to the Trustee at least two Business Days
prior to each semiannual record 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 the holders of Securities.
SECTION 2.07. Transfer and Exchange.
When Securities are presented to the Registrar or a co-registrar with a
request from the Holder of such Securities to register a transfer, the Registrar
shall register the
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transfer as requested. 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 attorneys duly authorized in writing.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at the office
or agency maintained for such purpose pursuant to Section 2.03.
To permit registrations of transfers and exchanges, the Company shall issue
and execute and the Trustee shall authenticate new Securities evidencing such
transfer or exchange at the Registrar's request. No service charge shall be made
to the Securityholder for any registration of transfer or exchange. The Company
may require from the Securityholder payment of a sum sufficient to cover any
transfer taxes or other governmental charge that may be imposed in relation to a
transfer or exchange, but this provision shall not apply to any exchange
pursuant to Section 2.09, 3.03, 5.02, 6.09 or 12.04 (in which events the Company
will be responsible for the payment of such taxes). The Registrar shall not be
required to exchange or register a transfer of any Security for a period of 15
days immediately preceding the first mailing of notice of redemption of
Securities to be redeemed or of any Security selected, called or being called
for redemption except, in the case of any Security where public notice has been
given that such Security is to be redeemed in part, the portion thereof not to
be redeemed.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Securities. In case any
temporary or definitive Security shall become mutilated or be destroyed, lost or
stolen, the Company in its discretion may execute, and upon its request the
Trustee shall authenticate and deliver, a new Security, bearing a serial number
not contemporaneously outstanding, in exchange and substitution for the
mutilated Security or in lieu of and in substitution for the Security so
destroyed, lost or stolen. In every case, the applicant for a substituted
Security shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless, and in every
case of destruction, loss or theft, the applicant shall also furnish to the
Company and to the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Security and of the ownership thereof.
The Trustee shall authenticate any such substituted Security and deliver
the same upon the written request or authorization of any Officer of the
Company. Upon the issuance of any substituted Security, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses connected
therewith. In case any Security which has matured or is about to mature shall
have become mutilated or be destroyed, lost or stolen, the Company may, instead
of issuing a substitute Security, pay or authorize the payment of same (without
surrender thereof except in the case of a mutilated Security) if the applicant
for such payment shall furnish the Company, the
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Trustee and any Paying Agent with such security or indemnity as they may require
to save each of them harmless and, in case of destruction, loss or theft,
evidence to the satisfaction of the Company and the Trustee of the destruction,
loss or theft of such Security and of the ownership thereof.
Every substituted Security issued pursuant to the provisions of this
Section 2.08 by virtue of the fact that any Security is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security shall be found at any
time, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder. All
Securities shall be held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities and shall preclude any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.09. Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute and the Trustee shall authenticate and
deliver temporary Securities (printed or lithographed). Temporary Securities
shall be issuable in any authorized denomination, and substantially in the form
of the definitive Securities but with such omissions, insertions and variations
as may be appropriate for temporary Securities, all as may be determined by the
Company. Every such temporary Security shall be authenticated upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Securities. Without unreasonable delay the Company will execute
and deliver to the Trustee definitive Securities and thereupon any or all
temporary Securities may be surrendered in exchange therefor, at the office or
agency to be maintained by the Company pursuant to Section 2.03, and the Trustee
shall authenticate and deliver in exchange for such temporary Securities an
equal aggregate principal amount of definitive Securities. Such exchange shall
be made by the Company at its own expense and without any charge therefor. Until
so exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities authenticated and
delivered hereunder.
SECTION 2.10. Cancellation of Securities. All Securities surrendered for
the purpose of payment, redemption, conversion, exchange or transfer shall, if
surrendered to the Company or any Paying or Conversion Agent, be delivered to
the Trustee for cancellation, or if surrendered to the Trustee, shall be
canceled by it, and no Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall destroy canceled Securities and deliver its certificate of destruction to
the Company. If the Company shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
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SECTION 2.11. Benefits of Indenture Provisions. Nothing in this Indenture
or in the Securities expressed or implied, shall give or be construed to give
any person, firm or corporation, other than the parties hereto, any Paying
Agent, any Conversion Agent and the holders of Securities and, to the extent
provided in Article Four, the holders of Senior Indebtedness, any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all the covenants,
conditions or provisions contained in this Indenture or in the Securities being
for the sole benefit of the parties hereto, any Paying Agent, any Conversion
Agent and the holders of the Securities and, to the extent provided in Article
Four, the holders of Senior Indebtedness.
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 extent lawful) to the Persons who are
Securityholders on a subsequent special record date. After the deposit by the
Company with the Trustee of money sufficient to pay such defaulted interest, the
Trustee shall fix the record date and payment date. Each such special record
date shall be not less than 10 days prior to such payment date. At least 15 days
before the special record date, the Company shall mail to each Securityholder a
notice that states the special record date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted interest, if any, to
be paid. The Company may pay defaulted interest in any other lawful manner if,
after prior notice to the Trustee, such payment shall be deemed practicable by
the Trustee.
SECTION 2.13. CUSIP Number.
The Company may use a "CUSIP" number when issuing the Securities and, if
so, the Trustee may use the CUSIP number in notices of redemption or exchange as
a convenience to Securityholders; provided that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities.
ARTICLE THREE.
REDEMPTION OF SECURITIES
SECTION 3.01. Redemption Prices. The Company may, at its option, redeem all
or from time to time any part of the Securities, on any date on or after
November 15, 1997 and prior to maturity, upon notice as set forth in Section
3.02 and at the redemption prices (expressed in percentages of the principal
amount) set forth in the form of Security herein, together with accrued interest
to the date fixed for redemption (but installments of interest whose stated
maturity is on or prior to the date fixed for redemption shall continue to be
payable to the holders of record on the regular record
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date). Portions of such redemption prices in excess of 100% of the principal
amount are sometimes herein referred to as the "premium" payable upon such
redemption.
SECTION 3.02. Notice of Redemption, Selection of Securities. Whenever the
Company redeems Securities pursuant to this Article Three, it shall notify the
Trustee of the date fixed for redemption and the principal amount of Securities
to be redeemed. The notice shall be accompanied by an Officers' Certificate
stating that the redemption complies with the provisions of this Indenture. The
Company shall give each such notice at least 45 but not more than 90 days before
the date fixed for redemption or such other period as the Company and the
Trustee may agree.
In case the Company shall desire to exercise its right to redeem all or, as
the case may be, any part of the Securities in accordance with the right
reserved so to do, notice of such redemption shall be given to the holders of
the Securities to be redeemed as hereinafter provided in this Section 3.02, such
notice to be given by the Company or, at the Company's direction, by the Trustee
in the name and at the expense of the Company. If the notice is to be given by
the Trustee, the Company shall provide the Trustee with the information required
in this Section 3.02.
Notice of redemption shall be given by mailing to holders of Securities to
be redeemed in whole or in part a notice of such redemption by first class mail,
postage prepaid, not less than 30 nor more than 60 days prior to the date fixed
for redemption, to their last addresses as they shall appear upon the registry
book. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the holder
receives the notice. In any case, failure to duly give notice by mail, or any
defect in the notice, to the holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of such Security or any other Security.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the then current conversion price;
(4) the name and address of the Paying Agent and the Conversion Agent;
(5) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(6) that, unless the Company defaults in paying the Redemption Price,
interest on Securities called for redemption ceases to accrue on and after the
Redemption Date;
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(7) that the right to convert the Securities as provided in Article Five
shall terminate at the close of business on a date to be determined by the
Company which date (i) shall not be earlier than the fifth Business Day prior to
the Redemption Date, or, if the fifth Business Day before the Redemption Date is
a Legal Holiday, the close of business on the next preceding day which is not a
Legal Holiday and (ii) shall not be later than the Redemption Date (except that
a Security which the Company has offered to purchase pursuant to Section 6.09
hereof shall be convertible until the close of business on the Change of Control
Repurchase Date);
(8) if any Security is being redeemed in part, the portion of the principal
amount of such Security to be redeemed and the bond number of such Security 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;
(9) that Holders who want to convert Securities must satisfy the
requirements in paragraph 8 of the Securities;
(10) the CUSIP number, if any, of the Securities; and
(11) the consequences to a Holder, if any, of converting a Security (or
portion of a Security) prior to the next interest payment date if the Redemption
Date with respect to such Security occurs on or after such interest payment
date.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. If a CUSIP number is listed
in such notice or printed on the Security, the notice may state that no
representation is made as to the correctness or accuracy of such CUSIP number.
If less than all of the Securities are to be redeemed, the Company shall
give the Trustee written notice, at least 45 days (or such shorter period as may
be acceptable to the Trustee) prior to the date fixed for redemption, as to the
aggregate principal amount of the Securities to be redeemed, and thereupon the
Trustee shall select, in such manner as it shall deem appropriate and fair (so
long as such method is not prohibited the rules of any securities exchange or
market in which the Securities are then listed or quoted) from outstanding
Securities, a principal amount of Securities equal to such aggregate principal
amount of Securities to be redeemed and shall thereafter promptly notify the
Company in writing of the Securities so to be redeemed and, if any such
Securities are to be redeemed in part, the portions thereof to be redeemed.
SECTION 3.03. Payment of Securities on Redemptions, Deposit of Redemption
Price. If notice of redemption shall have been given as provided in Section
3.02, such Securities or portions of Securities shall, unless theretofore
converted into Common
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Stock pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place stated in such notice at the applicable redemption
price and premium, if any, together with accrued and unpaid interest to the date
fixed for redemption, and on and after such date fixed for redemption, unless
the Company shall default in the payment of the redemption price, interest on
the Securities so called for redemption shall cease to accrue. Moneys in the
amount necessary for each redemption referred to in Section 3.01 shall be
deposited with the Paying Agent by the Company on or prior to the date fixed for
redemption. On presentation and surrender of such Securities at the place of
payment specified in such notice, such Securities or the specified portions
thereof shall (subject to the provisions of Article Four) be paid and redeemed
at the applicable redemption price, together with accrued and unpaid interest
thereon to the date fixed for redemption. Installments of interest whose stated
maturity is on or prior to the date fixed for redemption shall continue to be
payable to the holders of such Securities on the relevant regular or special
record dates according to their terms and the provisions of Section 2.03 of this
Indenture.
Upon presentation of any Security redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver, at the expense of the
Company, a new Security or Securities of authorized denominations in aggregate
principal amount equal to the unredeemed portion of the Security so presented.
The Company's obligation to deposit with the Paying Agent moneys in the
amount necessary for the redemption of particular Securities or portions thereof
called for redemption shall be reduced automatically by the amount of such
moneys attributable to any of such called Securities or portions thereof which
shall have been converted prior to the date such moneys are required to be
deposited with the Paying Agent. Any moneys which shall have been deposited with
the Paying Agent for redemption of Securities and which are not required for
that purpose by reason of conversion of such Securities shall be repaid to the
Company. The Paying Agent may in each case require evidence reasonably
satisfactory to it of such conversion.
ARTICLE FOUR.
SUBORDINATION OF SECURITIES.
SECTION 4.01. Agreement that Securities to Be Subordinate. The Trustee
acknowledges, the Company covenants and agrees, and each holder of Securities
issued hereunder by his acceptance thereof likewise covenants and agrees, that
all payments of principal of, premium, if any, and interest on the Securities
and all other monetary claims, including such monetary claims as may result from
rights of repurchase or rescission, under or in respect of the Securities shall
be subordinated in accordance with the provisions of this Article Four to the
prior payment in full in cash of all amounts payable under all Senior
Indebtedness of the Company.
SECTION 4.02. Liquidation; Dissolution; Bankruptcy.
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Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property:
(a) holders of all Senior Indebtedness then outstanding shall be entitled
to receive payment in full in cash of all amounts owing with respect to all
Senior Indebtedness before Securityholders shall be entitled to receive any
payment on or with respect to the Securities; and
(b) until all Senior Indebtedness is paid in full in cash, any distribution
to which Securityholders would be entitled but for this Article Four shall be
made to holders of Senior Indebtedness as their interests may appear, except
that the Securityholders may receive Permitted Junior Securities.
The consolidation of the Company with, or the merger of the Company into,
.another person or the liquidation or dissolution of the Company following the
conveyance or transfer of the properties and assets of the Company substantially
as an entirety to another person upon the terms and conditions set forth in
Article Thirteen shall not be deemed a liquidation, dissolution, reorganization,
insolvency, receivership or similar proceeding of the Company for the purposes
of this Section.
SECTION 4.03. Company Not to Make Payments with Respect to Securities in
Certain Circumstances.
(1) Unless Section 4.02 shall be applicable, upon the occurrence of any
default in the payment of any obligation on or with respect to any Senior
Indebtedness, whether with respect to scheduled payments or amounts due upon
acceleration (a "Payment Default"), then no payment or distribution of any
assets of the Company of any kind or character shall be made by the Company on
account of principal of or interest on the Securities or on account of the
purchase, redemption or other acquisition of Securities or any of the
obligations of the Company under the Securities unless and until such Payment
Default shall have been cured or waived or shall have ceased to exist or such
Senior Indebtedness shall have been discharged or paid in full, immediately
after which the Company shall resume making any and all required payments,
including missed payments, in respect of its obligations under the Securities.
(2) Unless Section 4.02 shall be applicable, upon (1) the occurrence of any
default (other than a Payment Default) relating to Senior Indebtedness which
default, pursuant to the instrument governing such Senior Indebtedness, entitles
the holders (or a specified portion of holders) of such Senior Indebtedness to
accelerate the maturity of such Senior Indebtedness (a "Non-payment Default")
and (2) receipt by the Trustee and the Company from a holder of such Senior
Indebtedness or from the trustee, agent or other representative designated in
writing to the Trustee of any class or issue of Senior Indebtedness (the "Senior
Representative") of written notice of such
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occurrence, no payment or distribution of any assets of the Company of any kind
or character shall be made by the Company on account of principal of or interest
on the Securities or on account of the purchase, redemption or other acquisition
of Securities or on account of any of the other obligations of the Company under
the Securities for a period (a "Payment Blockage Period") commencing on the date
of receipt by the Trustee of such notice unless and until the earlier to occur
of the following events (subject to any blockage of payments that may then be in
effect under subsection (1) of this Section 4.03) (w) 179 days shall have
elapsed since receipt of such written notice by the Trustee (provided such
Senior Indebtedness shall theretofore not have been accelerated), (x) such
Non-payment Default shall have been cured or waived in the manner required by
the instrument relating to such Senior Indebtedness or shall have ceased to
exist, (y) such Senior Indebtedness shall have been discharged or paid in full
or (z) such Payment Blockage Period shall have been terminated by written notice
to the Company or the Trustee from either the Senior Representative initiating
such Payment Blockage Period or the holders of at least a majority in principal
amount of such issue of such Senior Indebtedness, immediately after which, in
the case of clause (w), (x), (y) or (z), the Company shall resume making any and
all required payments, including missed payments, in respect of its obligations
under the Securities. Only one Payment Blockage Period pursuant to such notice
may be commenced with respect to the Securities during any period of 360
consecutive days. Successive Payment Blockage Periods based on successive
Non-payment Defaults may be commenced; PROVIDED that no Non-payment Default with
respect to Senior Indebtedness which existed or was continuing on the date of
the commencement of any Payment Blockage Period shall be, or be made, the basis
for the commencement of any other Payment Blockage Period with respect to such
Senior Indebtedness unless such event of default shall have been cured or waived
for a period of not less than 180 consecutive days.
Regardless of anything to the contrary herein, nothing shall prevent (a)
any payment by the Trustee to the Securityholders of amounts deposited with it
pursuant to Article Fourteen or (b) any payment by the Trustee or Paying Agent
as permitted by Section 4.13.
SECTION 4.04. Payment Over of Proceeds in Certain Events. In the event that
any payment or distribution of assets of the Company of any kind or character
not permitted by Sections 4.02 or 4.03, whether in cash, property or securities,
shall be received by the Trustee or Paying Agent, if any, or the holders of the
Securities before all Senior Indebtedness is paid in full in cash, such payment
or distribution shall be received and held in trust for the benefit of the
holders of Senior Indebtedness and shall forthwith be paid over or delivered by
the Trustee, such Paying Agent or such Holders of the Securities, as the case
may be, directly to the holders of Senior Indebtedness (pro rata to each such
holder on the basis of the respective amounts of Senior Indebtedness held by
such holder) or the Senior Representative or the trustee under the indenture or
other agreement (if any) pursuant to which Senior Indebtedness may have been
issued, for application to the payment of, all Senior Indebtedness remaining
unpaid to the extent necessary to pay all obligations in respect of such Senior
Indebtedness in full in cash in accordance with its terms, after giving effect
to
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any other concurrent payment or distribution to the holders of such Senior
Indebtedness.
SECTION 4.05. No Waiver of Subordination Provisions. Without notice to or
the consent of the Securityholders or the Trustee, the holders of Senior
Indebtedness may at any time and from time to time, without impairing or
releasing the subordination herein made, change the manner, place or terms of
payments, or change or extend the time of payment of or renew or alter the
Senior Indebtedness, or amend or supplement in any manner any instrument
evidencing the Senior Indebtedness, any agreement pursuant to which the Senior
Indebtedness was issued or incurred or any instrument securing or relating to
the Senior Indebtedness; release any person liable in any manner for the payment
or collection of the Senior Indebtedness; exercise or refrain from exercising
any rights in respect of the Senior Indebtedness against the Company or any
other person; apply any moneys or other property paid by any person or released
in any manner to the Senior Indebtedness; or accept or release any security for
the Senior Indebtedness.
SECTION 4.06. Notice to Trustee of Specified Events, Reliance on
Certificate or Liquidating Agent. The Company shall give prompt written notice
to the Trustee and any Paying Agent of any fact known to the Company that would
prohibit the making of any payment to or by the Trustee or any Paying Agent in
respect of the Securities pursuant to the provisions of this Article.
Upon any distribution of assets of the Company or payment by or on behalf
of the Company referred to in this Article Four, the Trustee and the holders of
the Securities shall be entitled to rely upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 4.03 are pending, and the Trustee and the holders of the Securities
shall be entitled to rely upon a certificate of the liquidating trustee or agent
or other person making any such distribution to the Trustee or to the holders of
the Securities for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Four.
SECTION 4.07. 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 or payment over made under this Article to
holders of Senior Indebtedness which otherwise would have been made to
Securityholders is not, as between the Company, its creditors other than the
holders of Senior Indebtedness and Securityholders, a payment or distribution by
the Company on or on account of Senior Indebtedness, it being understood that
the provisions of this Article Four are, and are intended, solely
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for the purpose of defining the relative rights of the Securityholders, on the
one hand, and the holders of Senior Indebtedness, on the other hand.
SECTION 4.08. Obligation to Pay Not Impaired. Nothing contained in this
Article Four or elsewhere in this Indenture, or in the Securities, is intended
to or shall alter or impair, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Securities the principal of (and premium, if any) and interest on
the Securities at the time and place and at the rate and in the currency therein
prescribed, or to affect the relative rights of the holders of the Securities
and creditors of the Company other than the holders of Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or the holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the right, if any, under this Article
Four of the holders of the Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
SECTION 4.09. Reliance by Senior Indebtedness on Subordination Provisions.
Each holder of a Security by his acceptance thereof acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Indebtedness (by its
original terms or amendment thereof), whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to acquire
and hold, or to continue to hold, such Senior Indebtedness, and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in holding,
such Senior Indebtedness. The subordination provisions in this Article Four may
be enforced directly by the holders of Senior Indebtedness.
SECTION 4. 10. Subordination Not to Be Prejudiced by Certain Acts. No
present or future holder of Senior Indebtedness shall be prejudiced in his right
to enforce subordination of the indebtedness evidenced by the Securities by any
act or failure to act in good faith by any such holder or by noncompliance by
the Company with the terms and provisions and covenants herein regardless of any
knowledge thereof any such holder may have or otherwise be charged with.
SECTION 4.11. Trustee Authorized to Effectuate Subordination. Each holder
of Securities by his acceptance thereof authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination as provided in this Article Four and appoints
the Trustee his attorney-in-fact for any and all such purposes including, in the
event of any dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency or receivership or similar
proceedings or upon an assignment for the benefit of creditors or otherwise)
tending towards liquidation of the business and assets of the Company, to file a
claim for the unpaid balance of its Securities in the form required in said
proceedings and to cause said claim to be approved. If the Trustee does not file
a proper claim or proof of debt in the form required in such proceeding prior to
30 days.
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before the expiration of the time to file such claim or proof, then the holders
of the Senior Indebtedness shall have the right to file and are hereby
authorized to file an appropriate claim or proof for and on behalf of the
holders of said Securities.
SECTION 4.12. Trustee's Relationship to Senior Indebtedness. Except for the
Trustee's duty to hold cash, properties or securities in trust for the benefit
of holders of Senior Indebtedness pursuant to Section 4.04 hereof, the Trustee
shall owe no fiduciary duty to the holders of Senior Indebtedness. The Trustee
shall be entitled to all rights set forth in this Article Four in respect of any
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.
SECTION 4.13. Trustee and Paying Agents Not Chargeable with Knowledge Until
Notice. Notwithstanding any of the provisions of this Article Four or any other
provisions of this Indenture, the Trustee and any Paying Agent shall not at any
time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee or any Paying
Agent, unless and until a Responsible Officer of the Trustee or such Paying
Agent, as the case may be, shall have received written notice thereof from the
Company or a holder of a Senior Indebtedness, or any trustee thereof, and, prior
to the receipt of any such written notice, the Trustee and any other Paying
Agent shall be entitled to assume that no such facts exist. If at least two
Business Days prior to the date upon which the terms of any such moneys may
become payable for any purpose (including, without limitation, the payment of
either the principal of or the interest on any Security) a Responsible Officer
of the Trustee or Paying Agent, as the case may be, shall not have received with
respect to such moneys the notice provided for in this Section 4.13, then,
anything contained herein to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after the commencement
to such two Business Day period. Nothing contained in this Section 4.13 shall
limit the right of the holders of Senior Indebtedness to recover payments as
contemplated by Section 4.04.
SECTION 4.14. Article Applicable to Paying Agents. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall in
such case (unless the context shall otherwise require) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee, provided, however, that Sections 4.12 and 4.13 shall
not apply to the Company if it acts as a Paying Agent.
SECTION 4.15. Trustee's Compensation Not Prejudiced. Nothing contained in
this Article Four shall affect or subordinate the rights of the Trustee with
respect to any fees, expenses or indemnities owing by the Company to the Trustee
under this Indenture.
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ARTICLE FIVE.
CONVERSION OF SECURITIES.
SECTION 5.01. Conversion Privilege; Conversion Price. A Holder of a
Security may convert it into Common Stock at any time during the period stated
in paragraph 8 of the Securities. The number of shares issuable upon conversion
of a Security is determined as follows: Divide the principal amount to be
converted by the conversion price in effect on the conversion date. Round the
result to the nearest 1/100th of a share. The Company will deliver a check in
lieu of any fractional share.
The initial conversion price is stated in paragraph 8 of the Securities.
The conversion price is subject to adjustment in accordance with Section 5.04.
SECTION 5.02. Manner of Exercising Conversion Privilege. To convert a
Security a Holder must satisfy the requirements in paragraph 8 of the
Securities. The .date on which the Holder satisfies all those requirements is
the conversion date. As soon as practicable, the Company shall deliver to the
Holder through the Conversion Agent a certificate for the number of full shares
of Common Stock issuable upon the conversion and a check in lieu of any
fractional share. The person in whose name the certificate is registered shall
be treated as a stockholder of record on and after the conversion date.
Except as provided below, no adjustment will be made on conversion of a
Security for interest accrued thereon or for dividends on shares of Common Stock
issued on conversion. If a Security is surrendered for conversion during the
period after the close of business on any regular record date for the payment of
interest and before the opening of business on the corresponding interest
payment date, then (a) notwithstanding such conversion, the interest payable on
such interest payment date will be paid by check to the Person in whose name the
Security is registered at the close of business on such record date, and (b)
(excluding Securities or portions thereof called for redemption on a Redemption
Date occurring after such regular record date and on or prior to the fifth
Business Day following such interest payment date), when so surrendered for
conversion, the Security shall also be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount equal
to the interest payable on such interest payment date on the principal amount of
such Security then being converted; provided, however, that if the Company shall
default in the payment of said interest, said funds, if any shall be returned to
the payor thereof. The interest payment with respect to a Security (or portion
of a Security) called for redemption on a Redemption Date occurring on a date
during the period after the close of business on any regular record date and on
or prior to the close of business on the fifth Business Day after such
corresponding interest payment date, shall be payable by check on such interest
payment date to the holder of such Security at the close of business on such
regular record date notwithstanding the conversion of such Security after such
regular record date and on or prior to such interest payment
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date, and the holder converting such Security shall not be required to pay an
amount equal to the interest payable by check on such interest payment date upon
surrender of such Security for conversion.
As promptly as practicable after the receipt of such notice and of such
payment, if required, and the surrender of such Security as aforesaid, the
Company shall issue and deliver, at the office or agency at which such Security
is surrendered, to such holder or on his written order, as specified therein, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Security (or specified portion thereof) in
accordance with the provisions of this Article Five, and cash as provided in
Section 5.03 in respect of any fractional share of Common Stock otherwise
issuable upon such conversion. Such conversion shall be deemed to have been
effected immediately prior to the close of business on the date on which notice,
payment, if required, and proper endorsement or transfer, if required, shall
have been received by the Company and such Security shall have been surrendered
as aforesaid (unless such holder shall have so surrendered such Security and
shall have instructed the Company to effect the conversion on a particular date
following such surrender and such holder shall be entitled to convert such
Security on such date in which case such conversion shall be deemed to be
effected immediately prior to the close of business on such date) and at such
time the rights of the holder of such Security as such Securityholder shall
cease and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the shares
represented thereby.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the holder thereof, at the expense of the Company,
a new Security or Securities of authorized denominations in principal amount
equal to the unconverted portion of such Security.
SECTION 5.03. Fractional Shares. The Company will not issue a fractional
share of Common Stock upon conversion of a Security. Instead the Company will
deliver its check for the current market value of the fractional share. The
current market value of a fraction of a share is determined as follows: Multiply
the current market price (as defined in Section 5.04) on the Business Day next
preceding the date of conversion of a full share by the fraction. Round the
result to the nearest cent.
If more than one Security shall be surrendered for conversion at one time
by the same Holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
Securities (or specified portions thereof to the extent permitted hereby) so
surrendered.
SECTION 5.04. Adjustment of Conversion Price. The conversion price shall be
adjusted from time to time as follows:
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(a) In case the Company shall hereafter (i) pay a dividend or make a
distribution on its Common Stock in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its Common Stock any shares of capital
stock of the Company, the conversion price in effect immediately prior to such
action shall be adjusted so that the holder of any Security thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock or other capital stock of the Company which he would have owned
immediately following such action had such Security been converted immediately
prior thereto. An adjustment made pursuant to this subsection shall become
effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this subsection (a) the holder of any Security
thereafter surrendered for conversion shall become entitled to receive shares of
two or more classes of capital stock or shares of Common Stock and other capital
stock of the Company, the Board of Directors (whose determination shall be
conclusive and shall be described in a statement filed with the Trustee and with
any Conversion Agent) shall determine in good faith the allocation of the
adjusted conversion price between or among shares of such classes of capital
stock or shares of Common Stock and other capital stock.
(b) In case the Company shall hereafter issue rights or warrants to holders
of its outstanding shares of Common Stock generally entitling them to subscribe
for or purchase shares of Common Stock (or securities convertible into or
exchangeable for Common Stock) at a price per share (or having a conversion or
exchange price per share) less than the current market price per share (as
determined pursuant to subsection (e) of this Section 5.04) of the Common Stock
on the record date mentioned below, the conversion price shall be adjusted so
that the same shall equal the price determined by multiplying the conversion
price in effect immediately prior to such record date by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered for
subscription or purchase would purchase at such current market price, and of
which the denominator shall be the number of shares of Common Stock outstanding
on such record date plus the number of additional shares of Common Stock offered
for subscription or purchase. Such adjustment shall be made successively
whenever any such rights or warrants are distributed, and shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such rights or warrants. If at the end of the period during which
such rights or warrants are exercisable not all rights or warrants shall have
been exercised, the adjusted conversion price shall be immediately readjusted to
what it would have been based upon the number of additional shares of Common
Stock actually issued (or the number of shares of
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Common Stock issuable upon conversion of convertible securities actually
issued).
(c) In case the Company shall hereafter distribute to holders of its
outstanding Common Stock generally evidences of its indebtedness or assets
(excluding cash dividends or distributions) or rights or warrants to subscribe
for securities of the Company (excluding those referred to in subsection (b) of
this Section 5.04), then in each such case the conversion price of the shares of
Common Stock shall be adjusted so that the same shall equal the price determined
by multiplying the conversion price in effect immediately prior to the date of
such distribution by a fraction of which the numerator shall be the current
market price per share (determined as provided in subsection (e) of this Section
5.04) of the Common Stock on the record date mentioned below less the then fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and shall be described in a statement filed with the Trustee and
with any Conversion Agent) of the portion of such evidences of indebtedness or
assets (but not cash) so distributed to the holder of one share of Common Stock
or of such subscription rights or warrants applicable to one share of Common
Stock, and of which the denominator shall be such current market price per share
of Common Stock. Such adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
distribution.
In any case in which this subsection (c) is applicable, subsection (b)
shall not be applicable.
(d) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of its Common Stock cash in an aggregate amount that,
together with the aggregate amount of any other cash distributions to all
holders of its Common Stock within the 12 months preceding the date of payment
of such distribution and in respect of which no conversion price adjustment
pursuant to this subsection (d) has been made previously exceeds an amount equal
to 15% of the amount determined by multiplying the current market price per
share (determined as provided in subsection (e) of this Section 5.04) of the
Common Stock on the date fixed for stockholders entitled to receive such
distribution by the number of shares of Common Stock outstanding on such date
(excluding shares held in the Treasury of the Company), the conversion price
shall be reduced so that the same shall equal the price determined by
multiplying the conversion price in effect immediately prior to the
effectiveness of the conversion price reduction contemplated by this subsection
(d) by a fraction of which the numerator shall be the current market price per
share (determined as provided in subsection (e) of this Section 5.04) of the
Common Stock on the date of such effectiveness less the amount of cash so
distributed applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock (determined as
aforesaid), such reduction to
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become effective immediately prior to the opening of business on the day
following the date fixed for the payment of such distribution.
(e) For the purpose of any computation under subsections (b), (c) and (d)
of this Section 5.04 or under Section 5.03, the "current market price" per share
of Common Stock on any record date shall be deemed to be the average of the
daily closing prices for the five consecutive trading days immediately preceding
the date in question. The closing price for each day shall be 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, or, if the shares of Common Stock are not listed or admitted to
trading on such Exchange, on the principal national securities exchange on which
the shares are listed or admitted to trading, or if they are not listed or
admitted to trading on any national securities exchange, on the National
Association of Securities Dealers Automated Quotation ("NASDAQ") national market
system or any comparable system, or if the Common Stock is not listed on the
NASDAQ system or a comparable system, the closing bid and asked prices as
furnished by any member of the National Association of Securities Dealers, Inc.
selected from time to time by the Company for that purpose.
(f) In any case in which this Section 5.04 shall require that an adjustment
be made immediately following a record date, the Company may elect to defer (but
only until five Business Days following the filing by the Company with the
Trustee and any Conversion Agent of the certificate of Independent Public
Accountants described in Section 5.05) issuing to the holder of any Security
converted after such record date the shares of Common Stock issuable upon such
conversion over and above the shares of Common Stock issuable upon such
conversion on the basis of the conversion price prior to adjustment.
(g) No adjustment in the conversion price shall be required unless such
adjustment would require an increase or decrease of at least 1% of such price;
provided, however, that any adjustments which by reason of this subsection (g)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 5.04 shall be
made to the nearest cent or the nearest 1/100th of a share, as the case may be.
Anything in this Section 5.04 to the contrary notwithstanding, the Company shall
be entitled to make such reductions in the conversion price, in addition to
those required by this Section 5.04, as it in its discretion shall determine to
be advisable in order that any stock dividend, subdivision of shares,
distribution of rights to purchase stock or securities, or distribution of
securities convertible into or exchangeable for stock hereafter made by the
Company to its stockholders shall not be taxable; provided that in no event
shall such conversion price be less than the par value of the Common Stock at
the time such reduction is made. No adjustment to the conversion price pursuant
to this Indenture shall reduce the conversion price below the then existing par
value per share of
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Common Stock. The Company hereby covenants not to take any action to increase
the par value per share of the Common Stock.
No adjustment in the conversion price need be made for rights to purchase
shares of Common Stock or issuances of Common Stock pursuant to a Company plan
for reinvestment of dividends or interest.
(h) In the event that at any time as a result of an adjustment made
pursuant to subsection (a) of this Section 5.04, the holder of any Securities
thereafter surrendered for conversion shall become entitled to receive any
shares of the Company other than shares of Common Stock, thereafter the
conversion price of such other shares so receivable upon conversion of any
Security shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in this Article Five.
SECTION 5.05. Certificate Concerning Adjusted Conversion Price. Whenever
the conversion price is adjusted as herein provided, (i) the Company shall
promptly file with the Trustee and any Conversion Agent a certificate of a firm
of Independent Public Accountants (who may be the regular accountants employed
by the Company) setting forth the conversion price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment and the
manner of computing the same, which certificate shall be conclusive evidence of
the correctness of such adjustment and (ii) a notice stating that the conversion
price has been adjusted and setting forth the adjusted conversion price shall
forthwith be given by the Company to the Securityholders in the same manner
provided in Section 16.03. The Trustee and any Conversion Agent shall be under
no duty or responsibility with respect to any such certificate or the
certificate provided for in Section 5. 10 except to exhibit the same from time
to time to any holder of a Security desiring an inspection of such certificate.
SECTION 5.06. Notice of Certain Corporate Action. In case:
(a) the Company shall take any action which would require an adjustment in
the conversion price pursuant to Sections 5.04(b), 5.04(c) or 5.04(d); or
(b) the Company shall authorize the granting to the holders of its Common
Stock of rights or warrants to subscribe for or purchase any shares of stock of
any class or of any other rights; or
(c) there shall be any capital reorganization or reclassification of the
Common Stock (other than a subdivision or combination of the outstanding Common
Stock and other than a change in the par value of the Common Stock), or any
consolidation or merger to which the Company is a party or any statutory
exchange of securities with another corporation and for which approval of any
stockholders of the Company is required, or any sale or transfer of all or
substantially all of the assets of the Company; or
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(d) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall cause to be filed with the Trustee and any
Conversion Agent, and shall cause to be given to the Securityholders, in the
manner provided in Section 16.03, at least fifteen (15) days prior to the
applicable date hereinafter specified, a notice stating (i) the date on which a
record is to be taken for the purpose of such distribution or rights, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such distribution or rights is to be determined, or
(ii) the date on which such reorganization, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. Failure to give such notice or any defect therein
shall not affect the legality or validity of the proceedings described in
subsection (a), (b), (c) or (d) of this Section 5.06.
SECTION 5.07. Company to Provide Stock. The Company will at all times
reserve and keep available out of its authorized but unissued Common Stock, for
the purpose of effecting conversions of Securities, the full number of shares of
Common Stock deliverable upon the conversion of all outstanding Securities. For
purposes of this Section 5.07, the number of shares of Common Stock which shall
be deliverable upon the conversion of all outstanding Securities shall be
computed as if at the time of computation all outstanding Securities were held
by a single holder.
The Company will endeavor to list the shares of Common Stock required to be
delivered upon conversion of Securities prior to such delivery upon each
national securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
Prior to the delivery of any securities or other property, including cash,
which the Company shall be obligated to deliver upon conversion of the
Securities, the Company will endeavor to comply with all Federal and State laws
and regulations thereunder governing the registration of such securities with,
or any approval of or consent to the delivery thereof by, any governmental
authority.
SECTION 5.08. Taxes on Conversions. The Company will pay any and all taxes
that may be payable in respect of the issue or delivery of shares of Common
Stock on conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that of the holder of the Security or Securities to be converted, and
no such issue or delivery shall be made unless and until the person requesting
such issue has paid to the Company the amount
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of any such tax, or has established, to the satisfaction of the Company,
that such tax has been paid.
SECTION 5.09. Covenant as to Stock. The Company covenants that all shares
of Common Stock which may be delivered upon conversion of Securities will upon
delivery be duly and validly issued and fully paid and non-assessable, free of
all liens and charges imposed by the Company and not subject to any preemptive
rights.
SECTION 5. 10. Provision in Case of Consolidation or Merger.
Notwithstanding any other provision herein to the contrary, in case of any
consolidation or merger to which the Company is a party (other than a
transaction in which the Company is the continuing corporation and which does
not result in any reclassification or change of shares of Common Stock issuable
upon conversion of the Securities (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination)), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), there shall be no adjustments under Section
5.04 but the holder of each Security then outstanding shall have the right
thereafter to convert such Security into the kind and amount of securities, cash
or other property which he would have owned or have been entitled to receive
immediately after such consolidation, merger, statutory exchange, sale or
conveyance had such Security been converted immediately prior to the effective
date of such consolidation, merger, statutory exchange, sale or conveyance and
in any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Article Five with respect to the
rights and interests thereafter of the holders of the Securities, to the end
that the provisions set forth in this Article Five shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation
to any shares of stock or other securities or property thereafter deliverable on
the conversion of the Securities. Any such adjustments shall be made by and set
forth in a supplemental indenture executed by the Company and the Trustee and
evidenced by a certificate of a firm of Independent Public Accountants (who may
be the regular accountants employed by the Company), to that effect; and any
adjustment so approved shall for all purposes hereof conclusively be deemed to
be an appropriate adjustment.
The above provisions of this Section 5.10 shall similarly apply to
successive consolidations, mergers, statutory exchanges, sale or conveyances.
The Company shall give notice of the execution of such a supplemental
indenture to the holders of Securities in the manner provided in Section 16.03
within 30 days after the execution thereof.
SECTION 5.11. Trustee's Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any Conversion Agent shall at any time be under any duty
or responsibility to any holder of Securities to determine whether any facts
exist which
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may require any adjustment of the conversion price, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture proved to be employed, in
making the same. Neither the Trustee nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Security; and neither the
Trustee nor any Conversion Agent makes any representation with respect thereto.
Neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property upon the surrender of any
Security for the purpose of conversion or to comply with any of the covenants of
the Company contained in this Article Five.
ARTICLE SIX.
PARTICULAR COVENANTS OF THE COMPANY.
SECTION 6.01. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of (premium, if any) and interest on each of the Securities at the
time and place and in the manner provided in the Securities. Principal of (and
premium, if any) and interest on each of the Securities shall be considered paid
on the date due if the Paying Agent (other than the Company, a Subsidiary
thereof or any affiliate of any thereof) holds on that date, not later than
11:00 a.m. New York City time, immediately available funds designated for and
sufficient to pay the installment. The Company shall pay interest on overdue
principal at the rate borne by the Securities; it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 6.02. Offices for Notices, Payments and Conversions. The Company
will maintain in the Borough of Manhattan, The City of New York, an office or
agency where Securities may be surrendered for registration of transfer or
exchange or conversion and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; PROVIDED,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the
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Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
an agency of the Company in accordance with Section 2.03.
SECTION 6.03. Paying Agents. (a) Any Paying Agent appointed by the Company
other than the Trustee shall be a bank or trust company of the character and
with the qualifications set forth in Section 9. 10 and the Company covenants and
agrees to enter into an appropriate agency agreement with any Registrar or
Paying Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Registrar or Paying Agent. In
addition, the Company covenants and agrees to cause such Paying Agent to execute
and deliver to the Trustee an instrument in which it shall agree with the
Trustee, subject to the provisions of this Section, (1) that such Paying Agent
shall hold in trust for the benefit of the Securityholders all sums held by such
Paying Agent for the payment of the principal of (or premium, if any) or
interest on any of the Securities, (2) that such Paying Agent shall give to the
Trustee notice of any failure by the Company (or any other obligor on the
Securities) to make any payment of the principal of (or premium, if any) or
interest on the Securities when the same shall be due and payable, and (3) at
any time during the continuance of such default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying
Agent.
(b) If the Company shall at any time act as its own Paying Agent, then on
or before eachdue date of the principal of (and premium, if any) or interest on
any of the Securities, it will set aside and segregate and hold in trust for the
benefit of the holders of the Securities, a sum sufficient to pay such principal
(and premium, if any) or interest so becoming due, and will notify the Trustee
of any failure to take such action.
(c) Anything in this Section 6.03 to the contrary notwithstanding, the
Company may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay or cause to be paid to
the Trustee all sums held in trust by it or any Paying Agent as required by this
Section, such sums to be held by the Trustee upon the terms herein contained.
(d) Anything in this Section 6.03 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 14.03 and 14.04 hereof.
SECTION 6.04. Annual Review Certificate. The Company covenants and agrees
to deliver to the Trustee, on or before a date not more than 90 days after the
end of each fiscal year of the Company ending after the date hereof, a
certificate from its principal executive officer, principal financial officer or
principal accounting officer stating that a review of the activities of the
Company and of its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing officers with
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a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such officer signing such certificate, that to the best of his knowledge the
Company has kept, observed, performed and fulfilled each and every covenant in
this Indenture contained and is not in default in the performance and observance
of any of the terms, provisions and conditions hereof (or, if they Company shall
be in default, specifying all such defaults and the nature thereof of which he
may have knowledge) and that to the best of his knowledge no event has occurred
and remains in existence by reason of which payments on account of the principal
of (or premium, if any) or interest on the Securities is prohibited.
SECTION 6.05. Appointment to Fill a Vacancy in Office of Trustee. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 9.08, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 6.06. Further Instruments and Acts. The Company will, upon request
of the Trustee, execute and deliver such further instruments and do such further
acts as may reasonably be necessary or proper to carry out more effectually the
purposes of this Indenture.
SECTION 6.07. Payment of Taxes and Assessments. The Company will, and will
cause each Subsidiary to, pay all taxes, assessments and governmental charges
lawfully levied or assessed upon it, its property, or upon any part thereof or
upon its income or profits, or any part thereof, before the same shall become
delinquent, and will duly observe and conform to all lawful requirements of any
governmental authority relative to any of its property, and all covenants, terms
and conditions upon or under which any of its property is held; and within four
months after the accruing of any lawful claims or demands for labor, materials
or supplies or other matters which might become a lien or charge upon any of its
property or the income therefrom, it will pay or cause to be discharged or make
adequate provision to satisfy and discharge the same; provided that nothing in
this Section 6.07 or elsewhere in this Indenture contained shall require the
Company to observe or conform to any requirements of governmental authority or
to cause to be paid or discharged, or to make provision for, any such lien or
charge or to pay any such tax assessment or governmental charge so long as the
applicability or validity thereof shall be contested in good faith; and provided
further, that neither the Company nor any Subsidiary shall be required to pay
any such taxes, assessments or charges, if in the judgment of the Board of
Directors of the Company or such Subsidiary, such payment shall no longer be
advantageous to the Company or such Subsidiary in the conduct of its business.
SECTION 6.08. Maintenance of Corporate Existence. Except as otherwise
provided or permitted pursuant to the other provisions of this Indenture, the
Company will, and will cause each Subsidiary to, maintain its corporate
existence and right to carry on business and duly procure all necessary renewals
and extensions thereof and to use its best efforts to maintain, preserve and
renew all such rights, powers, privileges
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and franchises; provided, however, that nothing herein contained shall be
construed to prevent the Company or a Subsidiary from ceasing or omitting to
exercise any rights, powers, privileges or franchises (including, in the case of
a Subsidiary, the corporate existence thereof) which in the judgment of the
Board of Directors of the Company or of such Subsidiary should not be exercised
or the ceasing or omitting to exercise of which in the judgment of the Board of
Directors of the Company or of such Subsidiary will not have a material adverse
effect on the Company and its Subsidiaries considered as a whole; and provided
further, that any Subsidiary of the Company may consolidate with, merge into, or
transfer or distribute all or part of its property and assets to the Company or
any wholly-owned Subsidiary of the Company.
SECTION 6.09. Change of Control. (a) In the event that a Change of Control
occurs, each Securityholder shall have the right, at such Securityholder's
option, to require that the Company repurchase all or any portion of such
Securityholder's Securities at a purchase price (the "Change of Control
Repurchase Price") in cash equal to 100% of the principal amount thereof
together with accrued interest to the date of repurchase (the "Change of Control
Repurchase Date"), in accordance with the provisions of paragraph (b) of this
Section 6.09, on a date that shall be not later than the 40th Business Day after
the mailing by the Company of the notice that a Change of Control has occurred.
(b) Within 15 Business Days after a Change of Control, the Company shall
mail a notice to the Trustee and each Securityholder of record as of the date of
the Change of Control stating:
(1) that a Change of Control has occurred and that such Securityholder has
the right to require the Company to repurchase all or any portion of such
Securityholder's Securities at the Change of Control Repurchase Price;
(2) the current conversion price, the date on which the right to convert
such Holder's Securities into Common Stock will expire and the place or places
where such Securities may be surrendered for conversion;
(3) the Change of Control Repurchase Date;
(4) that Holders electing to have Securities or a portion thereof purchased
will be required to surrender their Securities to the Paying Agent at the
address specified in such notice prior to at any time prior to the close of
business on the Change of Control Repurchase Date with the "Option of Holder to
Elect Purchase" on the reverse thereof completed and must complete any form of
letter of transmittal proposed by the Company and acceptable to the Trustee and
the Paying Agent;
(5) that Holders of Securities will be entitled to withdraw their election
to have Securities purchased if the Paying Agent receives, not
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later than the close of business on the Change of Control Repurchase Date,
a tested telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount at maturity of Securities the Holder delivered for
purchase, the Security certificate number (if any) and a statement that such
Holder is withdrawing his election to have such Securities purchased;
(6) that Securities which have been surrendered to the Paying Agent maybe
converted into Common Stock only to the extent that the Holder of such
Securities withdraws his election to have such Securities purchased in
accordance with the terms of this Section 6.09;
(7) that any Security not tendered or not accepted for payment will
continue to accrue interest;
(8) that, unless the Company defaults in paying the Change of Control
Repurchase Price, any Security accepted for payment shall cease to accrue
interest after the Change of Control Repurchase Date; and
(9) a description of the procedure which a Holder must follow to exercise
his right to have Securities repurchases.
At the Company's request, the Trustee shall give such notice in the
Company's name and at the Company's expense, provided, however, that the Company
shall deliver to the Trustee, at least 5 days prior to the date upon which
notice must be mailed to Securityholders (unless a shorter time shall be
acceptable to the Trustee), an Officer's Certificate setting forth the
information to be stated in such notice as provided in this Section 6.09. No
failure of the Company to give the foregoing notice shall limit any
Securityholder's right to exercise a repurchase right.
The Trustee shall be under no obligation to ascertain the occurrence of a
Change of Control or to give notice with respect thereto other than as provided
above upon receipt of the written notice of a Change of Control from the
Company. The Trustee may conclusively presume, in the absence of written notice
from the Company to the contrary, that no Change of Control has occurred.
(c) In the event a repurchase right shall be exercised in accordance with
the terms hereof, the Company shall pay or cause to be paid the price payable
with respect to the Securities as to which the repurchase right had been
exercised in cash to the Securityholder. In the event that a repurchase right is
exercised with respect to less than the entire principal amount of a surrendered
Security, the Company shall execute and the Trustee shall authenticate for
issuance in the name of the Securityholder a Security or Securities in the
aggregate principal amount of the unpurchased portion of such surrendered
Security.
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(d) In connection with any repurchase of Securities under this Section
6.09, the Company shall (i) comply with Rule 13e-4 (which term, as used herein,
includes any successor provision thereto) under the Exchange Act, if applicable,
(ii) file the related Schedule 13e-4 (or any successor schedule, form or report)
under the Exchange Act, if applicable, and (iii) otherwise comply with all
federal and state securities laws so as to permit the rights and obligations
under this Section 6.09 to be exercised in the time and in the manner specified
in this Section 6.09.
SECTION 6.10. Waiver of Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or other law that would prohibit or forgive the
Company from paying all or any portion of the principal of or interest on the
Securities as contemplated herein or in the Securities, wherever enacted, now or
at any time hereafter in force, or that may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 6.11. SEC Reports. (a) 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 Exchange Act, and within 15 days after it files all
such reports, information and other documents 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.
In the event the Company is at any time no longer 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-Q 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 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 end 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 Subsection 314(a).
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ARTICLE SEVEN.
(Intentionally Omitted]
ARTICLE EIGHT.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 8.01. Events of Default. An "Event of Default" occurs if:
(a) the Company defaults in the payment of any installment of interest upon
any of the Securities as and when the same shall become due and payable and the
default continues for a period of 30 days, whether or not such payment is
prohibited by the provisions of Article Four; or
(b) the Company defaults in the payment of the principal (or premium, if
any) of any of the Securities as and when the same shall become due and payable
either at maturity, upon redemption (including redemption and purchase pursuant
to Section 6.09), by declaration or otherwise, and in each case whether or not
such payment is prohibited by the provisions of Article Four; or
(c) the Company fails to perform or observe any other covenant or agreement
in the Securities or in this Indenture and the default continues for the period
and after the notice specified in the penultimate paragraph of this Section
8.01; or
(d) the Company or any of its Significant Subsidiaries shall have failed to
pay principal at maturity of, or an event of default shall have occurred and be
continuing under and resulted in the acceleration of, any loan agreement,
mortgage, indenture or other instrument under which there is issued or by which
there is secured or evidenced any Indebtedness of the Company (other than the
Securities) or any of its Significant Subsidiaries, whether such Indebtedness
exists as of the Issuance Date or shall be created thereafter, and the principal
amount of such Indebtedness which, together with any such other Indebtedness so
accelerated or not paid at maturity, aggregates an amount equal to or greater
than $10,000,000; or
(e) there shall have been entered a decree or order under any Bankruptcy
Law by a court of competent jurisdiction that (A) is for relief in respect of
the Company or any Significant Subsidiary under any Bankruptcy Law, or (B)
appoints a Custodian of the Company or such Significant Subsidiary or of any
substantial part of the property of the Company or such Significant Subsidiary,
as the case may be, or (C) orders the winding-up or liquidation of the affairs
of the Company or such Subsidiary, as the case may be, and the continuance of
any such decree or order unstayed and in effect for a period of 60 consecutive
days; or
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(f) the Company or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law (A) commences a voluntary case or proceeding with
respect to itself, (B) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding, (C) applies for,
consents to or acquiesces in the appointment of or taking possession by a
Custodian of the Company or such Significant Subsidiary or for a substantial
part of its properties or (D) makes a general assignment for the benefit of its
creditors; or
(g) a final judgment which, together with other outstanding final judgments
entered against the Company and/or any of its Significant Subsidiaries, is equal
to or exceeds an aggregate of $10,000,000 (not covered by valid and collectible
insurance from solvent unaffiliated insurers) shall be entered against the
Company and/or any of its Significant Subsidiaries and within 60 days after
entry thereof such judgment or judgments shall not have been satisfied or
discharged or execution thereof stayed pending appeal or, within 60 days after
the expiration of any such stay, such judgment shall not have been satisfied or
discharged.
The term "Bankruptcy Law" means Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law. The term "Custodian" means
any receiver, liquidator, assignee, trustee, custodian, sequestrator or similar
official under any Bankruptcy Law.
A Default under clause (c) 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 60 days after receipt of such
notice. The notice must specify the Default, demand that it be remedied and
state the notice is a "Notice of Default." When a Default is cured, it ceases.
SECTION 8.02. Acceleration. If any Event of Default (other than an Event of
Default with respect to the Company specified in Sections 8.01(e) or (f) above)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in principal amount of the Securities then outstanding by notice
to the Company and the Trustee, may declare to be due and payable immediately
the principal amount of the Securities plus accrued interest to the date of
acceleration. Upon any such declaration, such amount shall be due and payable
immediately. If an Event of Default with respect to the Company specified in
Sections 8.01(e) or (f) above 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 a majority in principal amount of the
outstanding Securities by notice to the Trustee may rescind an acceleration and
its consequences if (x) all existing Events of Default, other than the
non-payment of the principal of the Securities which shall have become due
solely by such declaration of acceleration, shall have been cured or waived, (y)
to the extent the payment of such interest is lawful, interest on overdue
installments of interest and
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overdue principal which has become due otherwise than by such declaration of
acceleration has been paid, and (z) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction.
SECTION 8.03. 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 principal 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, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.
SECTION 8.04. Waiver of Defaults and Events of Default. Subject only to the
provisions of Sections 8.07 and 12.02 hereof, the Holders of a majority in
principal amount of the outstanding Securities by written notice to the Trustee
may waive an existing Default or Event of Default and its consequences except
(a) a Default in payment of principal or interest on any Security as specified
in clauses (a) and (b) of Section 8.01 or (b) in respect of a covenant or
provision hereof which under Article Twelve cannot be modified or amended
without the consent of the Holder of each outstanding Security affected. When a
Default or Event of Default is waived, it is cured and ceases; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto.
SECTION 8.05. Control by Majority. The Holders of a majority in principal
amount of the outstanding Securities 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, including, without limitation, any remedies
provided for in Section 8.03. The Trustee may refuse, however, to follow any
direction that conflicts with law, the Securities or this Indenture, or that the
Trustee determines may be unduly prejudicial to the rights of another
Securityholder, that may involve the Trustee in personal liability or if the
Trustee determines that it does not have adequate indemnification against any
loss or expense; PROVIDED that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
SECTION 8.06. Limitation on Suits. Except as provided in Section 8.07, a
Securityholder may not pursue any remedy with respect to this Indenture or the
Securities unless:
(a) the Holder gives to the Trustee written notice of a continuing Event of
Default;
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(b) the Holders of at least 25% in principal amount of the Securities then
outstanding make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expenses;
(d) the Trustee does not comply with the request within 30 days after
receipt of the notice, request and offer of indemnity; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 30-day period by the Holders of a majority 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 another
Securityholder.
SECTION 8.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of the principal of, premium, if any, and interest on the
Security, on or after the respective due dates expressed in the Security
(including the maturity date, the Redemption Date and the Change of Control
Purchase Date), or to bring suit for the enforcement of any such payment on or
after such respective dates, is absolute and unconditional and shall not be
impaired or affected without the consent of the Holder.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to convert the Security or to bring suit for the
enforcement of such right shall not be impaired or affected without the consent
of the Holder.
SECTION 8.08. Collection Suit by Trustee. If an Event of Default in payment
of interest or principal specified in Section 8.01(a) or (b) 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 unpaid 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 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 8.09. 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 upon the Securities),
its creditors or its property and
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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.
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 9.07.
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 8.10. Application of Money Collected by Trustee. Subject to the
provisions of Article Four, any moneys collected by the Trustee or any Paying
Agent pursuant to this Article Eight shall be applied in the order following, at
the date or dates fixed by the Trustee for the distribution of such moneys, upon
presentation of the several Securities, and stamping thereon the payment, if
only partially paid, and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section 9.07
hereof;
Second: To holders of Senior Indebtedness of the Company to the extent
required by Article Four hereof,
Third: To the Securityholders for amounts owing and unpaid upon the
Securities for principal (and premium, if any) and interest, with interest on
the overdue principal and premium, if any, and (to the extent that such interest
has been collected by the Trustee or Paying Agent) on overdue installments of
interest at the rate borne by the Securities, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
for principal (and premium, if any) and interest, respectively; and
Fourth: To the Company or as a court of competent jurisdiction may direct.
SECTION 8.11. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonably attorneys' fees, against any party litigant
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in such suit, having due regard to the merits and good faith of the claims
or defenses made by such party litigant; but the provisions of this Section 8.11
shall not apply to any suit instituted by the Trustee, to any suit instituted by
any Securityholder, or group of Securityholders, holding in the aggregate more
than ten percent in aggregate principal amount of the Securities outstanding, or
to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security against the
Company on or after the due date expressed in such Security.
SECTION 8.12. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture or any Security and such proceeding has been discontinued or abandoned
for any reason, or has been determined adversely to the Trustee or to such
Holder, then and in every case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 8.13. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 8.14. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article Eight or by law to the Trustee or
to the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
ARTICLE NINE.
CONCERNING THE TRUSTEE.
SECTION 9.01. Duties of Trustee.
(1) If an Event of Default has occurred and is continuing, the Trustee
shall exercise its 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.
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(2) Except during the continuance of an Event of Default:
(a) The Trustee need perform only those duties that are specifically set
forth in this Indenture and no others.
(b) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. The Trustee, however, shall
examine 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 9.01.
(2) The Trustee shall not be liable for any error in judgment made in good
faith by a Responsible Officer of the Trustee, 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 8.05.
(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 9.01.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity reasonably satisfactory to it against any
loss, liability or expense.
(f) 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.
SECTION 9.02. Rights of Trustee. Subject to Section 9.01:
(1) 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.
(2) 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
16.04. The
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Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Certificate or Opinion.
(3) The Trustee may act through Agents and shall not be responsible for the
misconduct or negligence of any Agent appointed with due care.
(4) 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.
SECTION 9.03. 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 its Affiliates with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights. The
Trustee, however, is subject to Sections 9.10 and 9.11.
SECTION 9.04. 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 or in any document used in the sale of the
Securities other than any statement in writing provided by the Trustee for use
in such document.
SECTION 9.05. Notice of Defaults. If a Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of principal of or interest on any Security, the Trustee may
withhold the notice if and so long as it in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 9.06. Reports by Trustee to Holders. If such report is required by
TIA Subsection 313, within 60 days after each May 15 beginning with May 15,
1995, the Trustee shall mail to each Securityholder a brief report dated as of
such May 15 that complies with TIA Subsection 313(a). The Trustee also shall
comply with TIA Subsection 313(b) and Subsection 313).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each stock national securities exchange on which the
Securities are listed. The Company agrees to notify the Trustee whenever the
Securities become listed on any national securities exchange.
SECTION 9.07. 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 the Trustee's agents and counsel.
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Subject to the provisions of the following paragraph, the Company shall
indemnify the Trustee for, and hold it harmless against, any loss or liability
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 and the Company may elect by written notice to the
Trustee, and with the consent of the Trustee, to assume the defense of any such
claim at the Company's expense with counsel reasonably satisfactory to the
Trustee. If the Trustee shall not consent to the Company's assumption of the
defense, the Company agrees to pay the reasonable costs and expenses of counsel
retained to represent the Trustee.
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. The Company shall not be liable for any settlement of any claim or action
effected without the Company's consent, which consent shall not be unreasonably
withheld.
To secure the Company's payment obligations in this Section 9.07, 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 and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Sections 8.01(e) or (f) hereof occurs, the expenses and the
compensation for the services (including the reasonable fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
SECTION 9.08. 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
9.08.
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:
(a) the Trustee fails to comply with Section 9.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(e) a receiver or other public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of 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
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amount of the Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Company, and if a successor trustee is not
appointed within such period, the holders shall no longer be permitted to
appoint a successor trustee to replace such 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 then outstanding
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 9. 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, upon payment of its charges, transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section
9.07, 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. A successor Trustee shall mail notice of its
succession to each Securityholder.
SECTION 9.09. 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 successor corporation
without any further act shall be the successor Trustee.
SECTION 9.10. Eligibility; Disqualification. This Indenture shall always
have a Trustee who satisfies the requirements of TIA Subsection 310(a)(1). The
Trustee shall have a combined capital and surplus of at least $10,000,000 as set
forth in its most recent published annual report of condition. The Trustee shall
comply with TIA Subsection 310(b).
SECTION 9.11. Preferential Collection of Claims Against Company. The
Trustee is subject to and shall comply with TIA Subsection 311(a), excluding any
creditor relationship listed in TIA Subsection 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Subsection 311(a) to the extent
indicated therein.
ARTICLE TEN.
CONCERNING THE SECURITYHOLDERS.
SECTION 10.01. Action by Securityholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Securities may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that
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at the time of taking any such action the holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by Securityholders in person or
by agent or proxy appointed in writing, or (b) by the record of the holders of
Securities voting in favor thereof at any meeting of Securityholders duly called
and held in accordance with the provisions of Article Eleven, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Securityholders.
SECTION 10.02. Proof of Execution by Securityholders, Evidence of
Holdings. Subject to the provisions of Sections 9.01 and 11.05, proof of the
execution of any instrument by a Securityholder or his agent or proxy and proof
of the holding by any person of any of the Securities shall be sufficient for
any purpose of this Indenture if made in the following manner:
(a) The fact and date of the execution by any such person of any instrument
may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved by the register of such
Securities or by a certificate of the Security Registrar.
The record of any Securityholders' meeting shall be proved in the manner
provided in Section 11.06.
The Trustee may require such additional proof of any matter referred to in
this Section 10.02 as it shall deem necessary.
SECTION 10.03. Company-owned Securities Disregarded. In determining whether
the holders of the requisite aggregate principal amount of Securities have
concurred in any direction or consent under this Indenture, Securities which are
owned by the Company or any other obligor on the Securities or by any Affiliate
of the Company or such obligor shall be disregarded and deemed not to be
outstanding for the purpose of any such determination, provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction or consent only Securities which the Trustee knows are so owned
shall be so disregarded.
SECTION 10.04. Revocation of Consents, Future Holders Bound. At any time
prior to but not after the evidencing to the Trustee, as provided in Section
10.01, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Securities specified in this Indenture in connection
with such action, any holder of a Security which is included in the Securities
the holders of which have consented to such action may, by filing written notice
with the Trustee at its office and upon proof of holding as provided in Section
10.02, revoke such action as far as concerns such Security. Except as aforesaid
any such action taken by the holder of any Security shall be conclusive and
binding upon such holder and upon all future holders and owners of such
Security, irrespective of whether or not any notation in regard thereto is made
upon such Security or any Security issued in exchange or substitution therefor.
Any
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action taken by the holders of the percentage in aggregate principal amount of
the Securities specified in this Indenture in connection with such action shall
be conclusively binding upon the Company, the Trustee and the holders of all the
Securities.
ARTICLE ELEVEN.
SECURITYHOLDERS' MEETINGS.
SECTION 11.01. Purposes of Meetings. A meeting of Securityholders may be
called at any time and from time to time pursuant to the provisions of this
Article Eleven for any of the following purposes:
(1) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default hereunder
and its consequences, or to take any other action authorized to be taken by
Securityholders pursuant to any of the provisions of Article Eight;
(2) to remove the Trustee and nominate a successor trustee pursuant to the
provisions of Article Nine;
(3) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of Section 12.02; or
(4) to take any other action authorized to be taken by or on behalf of the
holders of any specified aggregate principal amount of the Securities under any
other provision of this Indenture or under applicable law.
SECTION 11.02. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Securityholders to take any action specified in Section 11.01,
to be held at such time and at such place in the Borough of Manhattan, The City
of New York, New York, as the Trustee shall determine. Notice of every meeting
of the Securityholders, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting, shall be given
to the holders of Securities in the manner provided in Section 16.03. Such
notice shall be mailed not less than 20 nor more than 90 days prior to the date
filed for the meeting.
SECTION 11.03. Call of Meetings by Company or Securityholders. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent in aggregate principal amount of the Securities
then outstanding, shall have requested the Trustee to call a meeting of
Securityholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or such Securityholders may determine the time and the place in
The Borough of Manhattan, The City of New York,
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New York for such meeting and may call such meeting to take any action
authorized in Section 11.01, by mailing notice thereof as provided in Section
11.02.
SECTION 11.04. Qualifications for Voting. To be entitled to vote at any
meeting of Securityholders a person shall (a) be a holder of one or more
Securities; or (b) be a person appointed by an instrument in writing as proxy by
a holder of one or more Securities. The only persons who shall be entitled to be
present or to speak at any meeting of Securityholders shall be the persons
entitled to vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 11.05. Regulations. Notwithstanding any provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Securityholders. In regard to proof of the holding
of Securities and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 11.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by a majority vote of the meeting.
Subject to the provisions of Section 10.03, at any meeting each
Securityholder or proxy shall be entitled to one vote for each $1,000 principal
amount of Securities held or represented by him, provided, however, that no vote
shall be cast or counted at any meeting in respect of any Security challenged as
not outstanding and ruled by the chairman of the meeting to be not outstanding.
The chairman of the meeting shall have no right to vote other than by virtue of
Securities held by him or instruments in writing as aforesaid duly designating
him as the person to vote on behalf of other Securityholders. Any meeting of
Securityholders duly called pursuant to the provisions of Section 11.02 or 11.03
may be adjourned from time to time by a majority of those present, whether or
not constituting a quorum, and the meeting may be held as so adjourned without
further notice. At any meeting of Securityholders duly called pursuant to the
provisions of Section 11.02 or 11.03, the presence of persons holding or
representing Securities in an aggregate principal amount sufficient to take
action on any business for the transaction of which such meeting was called
shall constitute a quorum.
SECTION 11.06. Voting. The vote upon any resolution submitted to any
meeting of Securityholders shall be by written ballots on which shall be
subscribed the signatures of the holders of Securities or of their
representatives by proxy and the principal amount of the Securities held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes
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cast at the meeting for or against any resolution and who shall make and file
with the secretary of the meeting their verified written reports in duplicate of
all votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 11.02. The record
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 11.07. No Delay of Rights by Meeting. Nothing in this Article
Eleven contained shall be deemed or construed to authorize or permit, by reason
of any call of a meeting of Securityholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Securityholders under any of the provisions of this Indenture or of the
Securities.
ARTICLE TWELVE.
SUPPLEMENTAL INDENTURES.
SECTION 12.01. Supplemental Indenture Without Consent of Securityholders.
The Company, when authorized by the resolutions of its Board of Directors, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of holders of
Securities pursuant to the requirements of Section 5.10;
(b) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company pursuant to Article
Thirteen hereof;
(c) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the holders of the Securities
as the Board of Directors of the Company and the Trustee shall consider to be
for the protection of the holders of Securities, and to make the occurrence, or
the occurrence and continuance, of a default in any of such additional
covenants, restrictions or conditions a default or an Event of Default
permitting the
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enforcement of all or any of the several remedies provided in this Indenture as
herein set forth; provided, however, that in respect of any such additional
covenant, restriction or condition such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the Trustee
upon such default;
(d) to provide for uncertificated Securities in addition to or in place of
certificated Securities;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture which shall not adversely affect the interests of
the holders of the Securities; and
(f) to modify, eliminate or add to the provisions of this Indenture to such
extent as shall be necessary to effect the qualification of this Indenture under
the TIA, or under any similar federal statute hereafter enacted.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
12.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Securities at the time outstanding, notwithstanding any of
the provisions of Section 12.02.
SECTION 12.02. Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Section 10.01) of the holders of not
less than a majority in aggregate principal amount of the Securities at the time
outstanding, the Company, when authorized by the resolutions of its Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Securities; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Securities, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or premium thereon, or modify the provisions of this
Indenture with respect to the subordination of the Securities, or
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impair the right to convert the Securities so affected, or (ii) reduce the
aforesaid percentage of Securities, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of the
affected Securities then outstanding.
Upon the request of the Company, accompanied by a copy of the resolutions
of its Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any such supplemental indenture and upon the filing
with the Trustee of evidence of the consent of Securityholders as aforesaid, the
Trustee shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Securityholders under this
Section 12.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 12.03. Compliance with Trust Indenture Act; Effect of Supplemental
Indentures. Any supplemental indenture executed pursuant to the provisions of
this Article Twelve shall comply with the TIA as in effect on the date of
execution thereof. Upon the execution of any supplemental indenture pursuant to
the provisions of this Article Twelve, this Indenture shall be and be deemed to
be modified and amended in accordance therewith and the respective rights,
limitation of rights, obligations, duties and immunities under this Indenture of
the Trustee, the Company and the holders of Securities shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 12.04. Notation on Securities. Securities authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Twelve may bear a notation in form approved by the
Trustees as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Securities so modified as to
conform, in the opinion of the Trustee and the Board of Directors of the
Company, to any modification of this Indenture contained in any such
supplemental indenture may be prepared and execution by the Company,
authenticated by the Trustee and delivered in exchange for the Securities then
outstanding.
SECTION 12.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee. The Trustee, subject to the provisions of Section 9.01 may
receive an Officers' Certificate and, an Opinion of Counsel both conforming to
Section 16.04 as conclusive evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of this Indenture.
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ARTICLE THIRTEEN.
CONSOLIDATION, MERGER AND SALE BY THE COMPANY.
SECTION 13.01. When Company May Merge, Etc. The Company shall not
consolidate with or merge with, or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets to (each a
"transaction"), another person unless: (i)(a) the Company is the surviving
entity, or (b) the successor person (if other than the Company) formed by such
consolidation or into which the Company is merged or to which such assets are
sold, assigned, transferred, leased, conveyed or otherwise disposed is a
corporation organized and existing under the laws of the United States or a
state thereof or the District of Columbia and such corporation expressly assumes
by supplemental indenture all the obligations of the Company under the
Securities and the Indenture; (ii) at the time of and immediately after giving
effect to such transaction no Default or Event of Default has occurred and is
continuing; and (iii) the Company has delivered to the Trustee an Officers'
Certificate and opinion of counsel stating that the transaction and supplemental
indenture comply with the Indenture, and thereafter all obligations of the
Company (if the Company is not the resulting, surviving or transferee person)
shall terminate. For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise) of all or substantially all of the properties or
assets of one or more Subsidiaries, the Capital Stock of which constitutes all
or substantially all of the properties and assets of the Company shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
SECTION 13.02. 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 13.01, 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 FOURTEEN.
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS.
SECTION 14.01. Discharge of Indenture. If (a) there shall have been
delivered to the Trustee for cancellation all Securities theretofore
authenticated (other than any Securities which shall have been destroyed, lost
or stolen and in lieu of or in substitution for which other Securities shall
have been authenticated and delivered), or (b)(1) all such Securities not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or will become due and payable at their stated maturity within one
year, or have been called for redemption, and the Company shall have irrevocably
deposited with the Paying Agent, in trust, funds (except funds paid to the
Company pursuant to Section 14.04) sufficient to pay at maturity or upon
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redemption all of such Securities (other than any Securities which shall have
been destroyed, lost or stolen and in lieu of or in substitution for which other
Securities shall have been authenticated and delivered) not theretofore
delivered to the Trustee for cancellation, including principal (and premium, if
any) and interest, and such deposit shall be upon terms making such funds
payable forthwith upon due presentation, whether before or after such date of
maturity or redemption of such Securities, (2) the Company shall have delivered
to the Trustee an Opinion of Counsel to the effect that such trust funds will
not be subject to any rights of holders of Senior Indebtedness, including
without limitation, those arising under Article Four hereof, and (3) the Company
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for herein relating
to the satisfaction and discharge of this Indenture have been compiled with, and
if in any such case the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company, then (except as provided below) this
Indenture shall cease to be of further effect, and the Trustee, on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 16.04 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; provided, however, that the Company's obligations under Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 6.01, 6.02, 6.03, 9.07, 9.08, 14.04, 14.05
and Article Five shall survive until the Securities are no longer outstanding.
SECTION 14.02. Deposited Moneys to Be Held in Trust by Trustee. All moneys
deposited with the Paying Agent pursuant to Section 14.01 shall be held in trust
and, subject to the provisions of Section 14.04, applied by it to the payment,
either directly or through any Paying Agent, to the holders of the particular
Securities for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due thereon for principal and interest
(and premium, if any).
SECTION 14.03. Paying Agent to Repay Moneys Held. Upon the satisfaction and
discharge of this Indenture all moneys then held by any Paying Agent of the
Securities (other than the Trustee) shall, upon demand of the Company, be repaid
to it and thereupon the Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 14.04. Unclaimed Moneys. Any moneys deposited with the Trustee or
any Paying Agent (including moneys held in trust by the Company if it shall act
as its own Paying Agent) not applied but remaining unclaimed by the holders of
Securities for two years after the date upon which the principal of (and
premium, if any) or interest on such Securities shall have become due and
payable shall be repaid to the Company by the Trustee or such Paying Agent on
demand, or if held in trust by the Company may at the Company's option be
released from such trust; and the holder of any of the Securities entitled to
receive such payment shall thereafter look only to the Company, as the holder of
a general claim, for the payment thereof, provided, however, that the Trustee or
such Paying Agent before being required to make any such repayment, may at the
expense of the Company cause to be mailed to each such holder or published once
a week for two successive weeks (in each case on any day of the
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week) in a newspaper printed in the English language and customarily published
at least once a day for at least five days in each calendar week and of general
circulation in the Borough of Manhattan, The City of New York, New York, or
both, a notice that said moneys have not been so applied and that after a date
named therein any unclaimed balance of said moneys then remaining will be
returned to the Company.
SECTION 14.05. Reinstatement. If the Trustee or a Paying Agent is unable to
apply any moneys in accordance with Section 14.01 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 14.01 until
such time as the Trustee or such Paying Agent is permitted to apply all such
moneys in accordance with Section 14.01; PROVIDED, HOWEVER, that if the Company
has made any payment of principal or interest on any of the Securities because
of the reinstatement of its obligations, the Company shall be subrogated to the
rights of the holders of the Securities to receive such payment from moneys held
by the Trustee or such Paying Agent.
ARTICLE FIFTEEN.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS.
SECTION 15.01. Indenture and Securities Solely Corporate Obligations. No
recourse for the payment of the principal or premium or interest on any
Security, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture, or in any Security, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or an successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as a consideration for the execution of this
Indenture and the issue of the Securities.
55
<PAGE>
ARTICLE SIXTEEN.
MISCELLANEOUS PROVISIONS.
SECTION 16.01. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements in this Indenture contained by
or on behalf of the Company shall bind its successors and assigns, whether so
expressed or not,
SECTION 16.02. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 16.03. Notices. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the holders of Securities on the Company may be given or served by being
deposited, first class postage prepaid, in a United States post office letter
box addressed (until another address is filed by the Company with the Trustee)
to ICN Pharmaceuticals, Inc., 3300 Hyland Avenue, Costa Mesa, CA 92626, Attn:
Chief Executive Officer. Any notice, direction, request, or demand by any
Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the principal
office of the Trustee, addressed to the attention of its Corporate Trust
Department.
Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or the Company to or on the
holders of Securities shall be given or served by first-class mail, postage
prepaid, addressed to the holders of such Securities at their last addressed as
the same appear on the registry books referred to in Section 2.03, and any such
notice shall be deemed to be given or served by being deposited in a post office
letter box in the form and manner provided in this Section 16.03.
SECTION 16.04. Evidence of Compliance with Conditions Precedent. Upon any
application or demand by the Company to the Trustee to take any action under any
of the provisions of this Indenture, the Company shall furnish to the Trustee 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 an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include: (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and
56
<PAGE>
scope of the examination or investigation upon which the statements or opinion
contained in such certificate or opinion are based; (3) a statement that, in the
opinion of such person, he had 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 16.05. Legal Holidays. In any case where the date of maturity of
interest on or principal of the Securities or the date fixed for redemption of
any Security or the last day on which a Securityholder has the right to convert
his Security at a particular conversion price shall not be a Business Day, then
payment of interest or principal (and premium, if any) or conversion of the
Securities need not be made on such date but may be made on the next succeeding
Business Day, with the same force and effect as if made on the date of such
maturity or the date fixed for redemption or such last day for conversion, and,
in the case of payment, no interest shall accrue for the period from and after
such date.
SECTION 16.06. Trust Indenture Act to Control. The provisions of subsection
310 to and including subsection 17 of the TIA that imposes duties on any person
(including any such provisions automatically deemed included in an indenture by
the TIA) are a part of and govern this Indenture. If any provision hereof
limits, qualifies or conflicts with any of such duties imposed by operation of
such provisions of the TIA, the applicable provisions of the TIA and duties
imposed thereby shall control.
SECTION 16.07. Communications by Holders with Other Holders. A
Securityholder may communicate pursuant to TIA Subsection 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Subsection 312(c).
SECTION 16.08. Governing Law. This Indenture and each Security shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of said State,
without giving effect to such State's conflicts of law principles.
SECTION 16.09. Table of Contents and Headings. The table of contents,
titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 16.10. Execution in Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
The Trustee hereby accepts the trusts in this Indenture declared and
provided, upon terms and conditions hereinabove set forth.
57
<PAGE>
IN WITNESS WHEREOF, ICN Pharmaceuticals, Inc. has caused this Indenture to
be signed and acknowledged by its chairman, its president, or one of its vice
presidents, and its corporate seal to be affixed hereunto, and the same to be
attested by its secretary or one of its assistant secretaries, and American
Stock Transfer & Trust Company has caused this Indenture to be signed and
acknowledged by one of its vice presidents, has caused its corporate seal to be
affixed hereunto, and the same to be attested by one of its Responsible
Officers, as of the day and year first written above.
ICN PHARMACEUTICALS, INC.
By: /S/ JOHN GIORDANI
----------------------------------------
Name:
Title:
Attest:
/S/ DAVID C. WATT
---------------------------------
Secretary
AMERICAN STOCK TRANSFER &
TRUST COMPANY,
As Trustee
By:
-----------------------------------------
Name:
Title:
Attest:
--------------------------------
Trust Officer
58
<PAGE>
IN WITNESS WHEREOF, ICN Pharmaceuticals, Inc. has caused this Indenture to
be signed and acknowledged by its chairman, its president, or one of its vice
presidents, and its corporate seal to be affixed hereunto, and the same to be
attested by its secretary or one of its assistant secretaries, and American
Stock Transfer & Trust Company has caused this Indenture to be signed and
acknowledged by one of its vice presidents, has caused its corporate seal to be
affixed hereunto, and the same to be attested by one of its Responsible
Officers, as of the day and year first written above.
ICN PHARMACEUTICALS, INC.
By: /S/ JOHN GIORDANI
----------------------------------------
Name:
Title:
Attest:
/S/ DAVID C. WATT
---------------------------------
Secretary
AMERICAN STOCK TRANSFER &
TRUST COMPANY,
As Trustee
By: /S/ HERBERT J. LEMMER
-----------------------------------------
Name: HERBERT J. LEMMER
Title: VICE PRESIDENT
Attest:
/S/
--------------------------------
Trust Officer
58
<PAGE>
EXHIBIT A
ICN PHARMACEUTICALS, INC.
8-1/2% Convertible Subordinated Note due 1999
ICN PHARMACEUTICALS, INC., a Delaware corporation, promises to pay to
-------------------------------------------------------------------------------
or registered assigns,
--------------------------------------------------------
--------------------------------------------------------------------------------
the principal sum of
---------------------------------------------------------
Dollars, on November 15, 1999.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Additional provisions of this Security are set forth on other side of this
Security.
IN WITNESS WHEREOF, ICN PHARMACEUTICALS, INC. has caused this instrument to
be duly signed.
ICN PHARMACEUTICALS, INC.
By:
---------------------------------
Secretary
CERTIFICATE OF AUTHENTICATION By:
---------------------------------
Chairman of the Board
American Stock Transfer & Trust Company, as Trustee, certifies that this is one
of the Securities referred to in the within mentioned Indenture.
American Stock Transfer &
Trust Company, as Trustee
By:
---------------------------------------
Authorized Signatory
Dated:
A-1
<PAGE>
1. INTEREST. ICN PHARMACEUTICALS, INC., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
8-1/2% per annum from and including the date of issuance of this Security to
maturity or earlier redemption. The Company will pay interest semi-annually on
May 15 and November 15 of each year beginning May 15, 1995. 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 November 18, 1994. If an Interest Payment
Date falls on a day that is not a Business Day, the interest payment to be made
on such Interest Payment Date will be made on the next succeeding Business Day
with the same force and effect as if made on such Interest Payment Date, and no
additional interest will accrue as a result of such delayed payment. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. The
Company shall pay interest on overdue principal at the rate borne by this
Security, and it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
2. METHOD OF PAYMENT. The Company will pay interest on the Securities
(except defaulted interest) to the persons who are the registered Holders of the
Securities at the close of business on the May 1 or November 1 next preceding
the interest payment date. Holders must surrender Securities to a Paying Agent
to collect principal payments. 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 a
Holder's registered address.
3. REGISTRAR AND AGENTS. Initially, American Stock Transfer & Trust Company
will act as a Registrar, a Paying Agent, a Conversion Agent and agent for
service of notices and demands. The Company may change any Registrar,
co-registrar, Paying Agent, Conversion Agent and agent for service of notices
and demands without the prior consent of the Holders but upon notice to the
Holders. The Company or any of its Subsidiaries may act as Registrar,
co-registrar, Paying Agent or Conversion Agent.
4. INDENTURE; LIMITATIONS. The Company issued the Securities under an
Indenture dated as of November 18, 1994 (the "Indenture") between the Company
and American Stock Transfer & Trust Company (the "Trustee"). Capitalized terms
herein are used as defined in the Indenture unless otherwise defined herein. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code
Subsection 77aaa-77bbbb) as in effect on the date of the Indenture. The
Securities are subject to all such terms, and the Holders of the Securities are
referred to the Indenture and said Act for a statement of such terms.
The Securities are general unsecured obligations of the Company limited to
$115,000,000 principal amount.
A-2
<PAGE>
5. OPTIONAL REDEMPTION BY THE COMPANY. The Company may, at its option, redeem
the Securities, in whole or from time to time in part, on any date after
November 15, 1997, at the following redemption prices, expressed as percentages
of the principal amount, if redeemed during the 12 months beginning November 15,
of the years indicated below:
YEAR PERCENTAGE
---- ----------
1997 ................................................ 102.125%
1998 and thereafter ................................. 100.000
in each case plus accrued and unpaid interest to the Redemption Date.
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 principal amount may be redeemed in part, but only in an
amount of $1,000 principal amount or integral multiples thereof. In the event of
redemption of this Security in part only, a new Security or Securities for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof. On and after the Redemption Date interest ceases to
accrue on Securities or portions of them called for redemption.
7. CHANGE OF CONTROL. In the event of a Change of Control (as hereinafter
defined) with respect to the Company, then each Holder of the Securities shall
have the right, at the Holder's option, to require the Company to purchase all
or a portion of such Holder's Securities, in accordance with the procedures set
forth in the Indenture, at a price equal to 100% of principal amount of the
Securities, plus accrued and unpaid interest to the date of purchase.
A "Change of Control" of the Company shall be deemed to have occurred at
such time when (i) the stockholders of the Company adopt a plan of liquidation
with respect to the Company or the Company sells, transfers, leases or otherwise
disposes of, in one transaction or series of related transactions, all or
substantially all of its assets; (ii) there shall be consummated any
consolidation or merger of the Company (1) in which the Company is not the
continuing or surviving corporation or (2) pursuant to which the Common Stock
would be converted into cash, securities or other property, in each case, other
than a consolidation or merger of the Company in which the holders of the Common
Stock immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of the total voting power of all classes of
Capital Stock of the continuing or surviving corporation immediately after such
consolidation or merger; (iii) a majority of the Board of Directors are not
Continuing Directors; or (iv) any person, or any persons acting together which
would constitute a "group" for purposes of Section 13(d) of the Exchange Act,
together with any Affiliate thereof shall beneficially own (as defined in Rule
13d-3 of the Exchange
A-3
<PAGE>
Act), at least 50% of the total voting power of all classes of Capital Stock of
the Company entitled to vote generally in the election of directors of the
Company.
8. CONVERSION. A Holder of a Security may convert such Security into Common
Stock of the Company at any time before the close of business on November 15,
1999. If the Security is called for redemption, the Holder may convert it at any
time before the close of business on a date determined by the Company which
shall be no earlier than the fifth Business Day prior to the date fixed for such
redemption or, if such fifth Business Day is a Business Day, on the next
succeeding Business Day (except that a Security which the Company has offered to
purchase pursuant to Section 6.09 of the Indenture will remain convertible until
the close of business on the Change of Control Repurchase Date). The initial
conversion price is $23.86 principal amount per share, subject to adjustment in
certain events as set forth in the Indenture. To determine the number of shares
issuable upon conversion of a Security, divide the principal amount to be
converted by the conversion price in effect on the conversion date and round to
the nearest 1/100th share. The Company will deliver a check for any fractional
share.
To convert a Security, a Holder must (1) complete and sign the conversion
notice on the back of the Security, (2) surrender the Security to the Conversion
Agent or Registrar, (3) furnish appropriate endorsements and transfer documents
if required by the Registrar or Conversion Agent and (4) pay any transfer or
similar tax if required. Except as provided below, no adjustment is to be made
on conversion for interest accrued hereon or for dividends on shares of Common
Stock issued on conversion. If a Security is surrendered for conversion after
the close of business on any regular record date for payment of interest and
before the opening of business on the corresponding interest payment date, then
(a) notwithstanding such conversion, the interest payable on such interest
payment date will be paid by check to the Person in whose name the Security is
registered at the close of business on such record date, and (b) (other than a
Security or a portion of a Security called for redemption on a Redemption Date
occurring after such record date and on or prior to the fifth Business Day
following such interest payment date), when so surrendered for conversion, the
Security must be accompanied by payment of an amount equal to the interest
payable on such interest payment date on the principal amount of such security
then being converted. The interest payment with respect to a Security (or
portion of a Security) called for redemption on a Redemption Date occurring on a
date during the period after the close of business on a date that would be any
regular record date (if a call for redemption had not been made) next preceding
a date that would be any interest payment date (if a call for redemption had not
been made) to the close of business on the fifth Business Day after the
corresponding interest payment date, shall be payable in cash on such interest
payment date to the Holder of such Security at the close of business on such
regular record date notwithstanding the conversion of such Security after such
regular record date and on or prior to such interest payment date, and the
Holder shall not be required to pay an amount equal to the interest payable on
such interest payment date upon surrender of such Security for conversion.
A-4
<PAGE>
If the Company is a party to a consolidation or merger or a transfer or
lease of all or substantially all of its assets, the right to convert a Security
into Common Stock may be changed into a right to convert it into securities,
cash or other assets of the Company or another Person.
9. SUBORDINATION. This Security is subordinated to all existing and future
Senior Indebtedness of the Company as defined in the Indenture. To the extent
and in the manner provided in the Indenture, Senior Indebtedness must be paid in
cash before any payment may be made to any Holders of Securities. Any
Securityholder by accepting this Security agrees to the subordination and
authorizes the Trustee to give it effect.
In addition to all other rights of Senior Indebtedness described in the
Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of any instrument relating to the
Senior Indebtedness or extension or renewal of the Senior Indebtedness.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered
form without coupons in denominations of $1,000 principal amount and integral
multiples thereof. A Holder may register the transfer of or exchange Securities
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 and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption in whole or in part or register the transfer of or exchange any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
11. PERSONS DEEMED OWNERS. The registered Holder of a Security shall be
treated as the owner of it for all purposes.
12. UNCLAIMED MONEY. If money for the payment of principal or interest on
any Securities remains unclaimed for two years, the Trustee and the Paying Agent
will pay the money back to the Company at its request. After that, Holders may
look only to the Company for payment.
13. MERGER OR CONSOLIDATION. The Company may not consolidate with, or merge
into, or transfer or lease all or substantially all of its assets to, another
person unless: the person is a corporation; such corporation assumes by
supplemental indenture all the obligations of the Company under the Securities
and the Indenture; at the time thereof and after giving effect to the
transaction no Default or Event of Default shall exist; and certain other
conditions set forth in the Indenture are satisfied.
14. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. The Indenture will be
discharged and canceled except for certain sections thereof upon payment of all
the Securities sufficient to pay principal and interest due on such payment or
redemption.
A-5
<PAGE>
15. AMENDMENT AND WAIVER. Subject to certain exceptions, the Indenture or
the Securities may be amended with the consent of the Holders of at least a
majority in principal amount of the Securities then outstanding and any existing
default in compliance with any provision may be waived with the consent of the
Holders of a majority in principal amount of the Securities then outstanding.
Without the consent of or notice to any Securityholder, the Company may amend
the Indenture or the Securities to, among other things, provide for
uncertificated Securities, to cure any ambiguity, defect or inconsistency or
make any other change that does not adversely affect the rights of any
Securityholder.
16. SUCCESSORS. When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
17. DEFAULTS AND REMEDIES. If an Event of Default, as defined in the
Indenture, occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of Securities may declare all the Securities to be due and
payable in the manner and with the effect provided in the Indenture, and upon
any such declaration such principal and accrued interest shall become due and
payable immediately. Holders of Securities 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 principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power. The Company is required to file periodic reports with the Trustee as
to the absence of Default. An Event of Default is: default for 30 days in
payment of interest on the Securities; default in payment of principal on the
Securities when due; failure by the Company for 30 days after notice to it to
comply with any of its other agreements in the Indenture or the Securities;
failure to pay at maturity, or default under other Indebtedness of the Company
or any Significant Subsidiary of the Company that results in the acceleration
prior to maturity, of other Indebtedness equal to or in excess of an aggregate
of $10,000,000; the rendering of a final judgment or judgments against the
Company or any Significant Subsidiary of the Company equal to or in excess of
$10,000,000 which is not discharged or stayed (or not covered by insurance)
within a period of 60 days; and certain events of bankruptcy or insolvency
involving the Company or its Significant Subsidiaries.
18. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, 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.
19. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer or
incorporator, as such, past, present or future, of the Company or any successor
corporation shall have any liability for any obligation 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 Holder of a Security by
accepting a Security waives
A-6
<PAGE>
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
20. AUTHENTICATION. This Security shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Security.
21. 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 rights of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
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: ICN Pharmaceuticals, Inc.,
3300 Hyland Avenue, Costa Mesa, CA 92626.
A-7
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security 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 other side of this Security)
Signature Guarantee:
THE SIGNATURES(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
<PAGE>
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
/ /
To convert only part of this Security, state the principal amount to be
converted (which must be a minimum of $1,000 or any 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 other side of this Security)
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 6.09 of the Indenture, check the box:
--------------------------------------
/ /
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 6.09 of the Indenture, state the amount:
(in an integral multiple of $1,000)
Date: Signature(s):
------------------------------------------
(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by:
THE SIGNATURES SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.