SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 28, 1997
FIRST SOUTH AFRICA CORP., LTD.
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(Exact Name of Registrant as Specified in Charter)
BERMUDA 0-27494 N/A
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
Clarendon House, Church Street, Hamilton HM CX, Bermuda
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (441) 295-1422
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
On August 28, 1997, First South Africa Corp., Ltd. a Bermuda
corporation (the "Company"), consummated the sale of 4,825 9% Senior
Subordinated Convertible Debentures due June 15, 2004 of the Company (the
"Debentures") at a purchase price of $1,000 per Debenture to nine foreign
investors (the "Offering) pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended, (the "Act") under
Regulation S promulgated thereunder. Also on August 28, 1997, the Company
consummated the sale of 2,175 Debentures at a purchase price of $1,000 per
Debenture to ten accredited investors pursuant to an exemption from the
registration requirements of the Act under Section 4(2) thereof and Regulation D
promulgated thereunder (such aggregate sales being part of a private placement
of 10,000 Debentures commenced in April 1997, which Debentures are subject to
the terms of an Indenture dated April 25, 1997 by and between the Company and
the American Stock Transfer & Trust Company, as Trustee). Of such 10,000
Debentures, 3,000 were sold to accredited investors pursuant to Section 4(2) of
the Act and Regulation D in April and May 1997. On August 13, 1997, the Company
filed a Registration Statement on Form S-1 (No. 333-33561) with respect to the
registration of the Debentures, the shares of Common Stock, par value $.01 per
share ("Common Stock"), underlying the Debentures, and certain other securities
which are described in such Registration Statement.
The Debentures are convertible at any time (subject to prior
redemption) into shares of Common Stock at the initial conversion price of $6.00
per share of Common Stock, subject to adjustment in certain events.
The Company offered and sold the Debentures through Value
Investing Partners, Inc. (the "Placement Agent") 4,825 of which were sold in an
offshore transaction only to non-U.S. persons as required by Regulation S, and
5,175 of which were sold to U.S. investors who are accredited investors as
defined in Regulation D of the Securities Act of 1933, as amended. For its
services as Placement Agent, the Company (i) paid to the Placement Agent a fee
in an amount equal to 7% of the gross proceeds of the sale of the Debentures,
(ii) agreed to issue to the Placement Agent a ten-year warrant to purchase
135,000 shares of Common Stock exercisable at the price of $6.00 per share,
subject to adjustments in certain events, and (iii) paid the Placement Agent a
non-accountable expense allowance of $60,000.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits:
EXHIBIT NUMBER DESCRIPTION
*4.1 Form of Indenture dated April 25, 1997 executed by
the Company and America Stock Transfer and Trust
Company, as trustee.
*4.2 Form of Debenture.
*4.3 Form of Placement Warrant
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* Filed herewith
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SIGNATURES
Pursuant to the requirement of the securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: September , 1997 FIRST SOUTH AFRICA CORP., LTD
By:________________________________
Name: Clive Kabatznik
Title: President
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Commission File No. 0-27494
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
to
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FIRST SOUTH AFRICA CORP., LTD.
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EXHIBIT
NUMBER DOCUMENT PAGE NUMBER
*4.1 Form of Indenture dated April 25,
1997, executed by the Company and
the American Stock Transfer and
Trust Company, as Trustee
*4.2 Form of Debenture
*4.3 Form of Placement Warrant
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* Filed herewith.
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FIRST SOUTH AFRICA CORP., LTD.
$10,000,000
9% Senior Subordinated Convertible Debentures
Due June 15, 2004
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INDENTURE
Dated as of April 25, 1997
AMERICAN STOCK TRANSFER & TRUST COMPANY
Trustee
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions............................................ 2
Section 1.02. Other Definitions...................................... 7
Section 1.03. Rules of Construction.................................. 7
ARTICLE II. THE SECURITIES
Section 2.01. Form and Dating........................................ 8
Section 2.02. Execution and Authentication........................... 8
Section 2.03. Registrar, Paying Agent and Conversion Agent........... 9
Section 2.04. Paying Agent to Hold Money in Trust. .................. 9
Section 2.05. Securityholder Lists...................................10
Section 2.06. Transfer and Exchange..................................10
Section 2.07. Replacement Securities.................................11
Section 2.08. Outstanding Securities.................................11
Section 2.09. Treasury Securities....................................12
Section 2.10. Temporary Securities...................................12
Section 2.11. Cancellation...........................................12
Section 2.12. Payment of Interest; Interest Rights Preserved.........12
Section 2.13. Legending of the Securities; Restriction on Transfer...14
Section 2.14. Notification Regarding Restricted Securities...........15
Section 2.15. CUSIP Numbers..........................................15
ARTICLE III.REDEMPTION
Section 3.01. Election to Redeem; Notice to Trustee. ................15
Section 3.02. Selection by Trustee of Securities to be Redeemed......16
Section 3.03. Notice of Redemption...................................16
Section 3.04. Effect of Notice of Redemption.........................18
Section 3.05. Deposit of Redemption Price............................18
Section 3.06. Securities Redeemed in Part............................18
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TABLE OF CONTENTS (CONT'D)
ARTICLE IV. COVENANTS
Section 4.01. Payment of Securities..................................18
Section 4.02. SEC Reports............................................19
Section 4.03. Compliance Certificate.................................19
Section 4.04. Usury Laws.............................................20
Section 4.05. Investment Company Act.................................20
Section 4.06. Dividend and Payment Restrictions Affecting
Subsidiaries........................................20
Section 4.07. Restriction on Payment of Dividends and
Stock Repurchases...................................22
Section 4.08. Restriction on Transfer With
Affiliates..........................................23
Section 4.09. Incurrence of Indebtedness.............................23
Section 4.10. Plan of Liquidation....................................24
Section 4.11. Money for Security Payments to Be Held in Trust........26
ARTICLE V. SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, Etc............................27
ARTICLE VI. DEFAULTS AND REMEDIES
Section 6.01. Events of Default......................................28
Section 6.02. Acceleration...........................................31
Section 6.03. Other Remedies.........................................32
Section 6.04. Waiver of Past Defaults................................33
Section 6.05. Control by Majority....................................33
Section 6.06. Limitation on Suits....................................33
Section 6.07. Rights of Holders to Receive Payment...................34
Section 6.08. Collection Suit by Trustee.............................34
Section 6.09. Trustee May File Proofs of Claim.......................35
Section 6.10. Priorities.............................................36
Section 6.11. Undertaking for Costs; Notice of Proceedings...........36
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TABLE OF CONTENTS (CONT'D)
ARTICLE VII. TRUSTEE
Section 7.01. Duties of Trustee......................................37
Section 7.02. Rights of Trustee......................................39
Section 7.03. Individual Rights of Trustee...........................40
Section 7.04. Trustee's Disclaimer...................................40
Section 7.05. Notice of Defaults.....................................41
Section 7.06. Compensation and Indemnity.............................41
Section 7.07. Replacement of Trustee.................................42
Section 7.08. Successor Trustee by Merger, Etc.......................43
Section 7.09. Eligibility; Disqualification..........................43
ARTICLE VIII. DISCHARGE OF INDENTURE
Section 8.01. Termination of Company's Obligations...................44
Section 8.02. Application of Trust Money.............................45
Section 8.03. Repayment to Company...................................45
ARTICLE IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.............................46
Section 9.02. With Consent of Holders................................46
Section 9.03. Revocation and Effect of Consents. ....................47
Section 9.04. Notation on or Exchange of Securities. ................48
Section 9.05. Trustee to Sign Amendments, Etc........................48
ARTICLE X. CONVERSION
Section 10.01. Conversion Privilege..................................48
Section 10.02. Conversion Procedure..................................49
Section 10.03. Fractional Shares.....................................50
Section 10.04. Taxes on Conversion...................................50
Section 10.05. Company to Provide Stock..............................50
Section 10.06. Adjustment for Change in Capital Stock................51
Section 10.07. Adjustment for Rights Issue...........................52
Section 10.08. Adjustment for Other Distributions....................52
Section 10.09. Adjustments for Common Stock Issue....................53
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TABLE OF CONTENTS (CONT'D)
Section 10.10. Adjustment for Convertible Securities Issue...........54
Section 10.11. Current Market Price..................................54
Section 10.12. Consideration Received................................54
Section 10.13. When Adjustment May be Deferred.......................55
Section 10.14. When No Adjustment Required...........................55
Section 10.15. Notice of Adjustment..................................56
Section 10.16. Voluntary Reduction...................................56
Section 10.17. Notice of Certain Transactions........................56
Section 10.18. Reorganization of Company.............................57
Section 10.19. Company Determination Final...........................58
Section 10.20. Trustee's Disclaimer..................................58
ARTICLE XI. SUBORDINATION
Section 11.01. Agreement to Subordinate..............................58
Section 11.02. Certain Definitions...................................59
Section 11.03. Liquidation; Dissolution; Bankruptcy..................59
Section 11.04. Default on Senior Indebtedness........................60
Section 11.05. Acceleration of Securities............................61
Section 11.06. When Distribution Must Be Paid Over. .................61
Section 11.07. Notice by Company.....................................62
Section 11.08. Subrogation...........................................62
Section 11.09. Relative Rights.......................................62
Section 11.10. Subordination May Not Be Impaired By Company..........63
Section 11.11. Distribution or Notice to Representative..............63
Section 11.12. Rights of the Trustee and Paying Agent................63
Section 11.13. Ranking of Securities.................................64
ARTICLE XII. SINKING FUND
Section 12.01. Sinking Fund Payments.................................64
Section 12.02. Satisfaction of Sinking Fund Payments with
Securities..........................................65
Section 12.03. Redemption of Securities for Sinking
Fund................................................65
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TABLE OF CONTENTS (CONT'D)
ARTICLE XIII. MISCELLANEOUS
Section 13.01. Notices; Reporting Date............................66
Section 13.02. Communication by Holders with Other Holders........67
Section 13.03 Certificate and Opinion as to Conditions Precedent.67
Section 13.04. Statements Required in Certificate or Opinion......67
Section 13.05. When Treasury Securities Disregarded. .............68
Section 13.06. Rules by Trustee and Agents........................68
Section 13.07. Legal Holidays.....................................68
Section 13.08. Governing Law......................................68
Section 13.09. No Adverse Interpretation of Other Agreements......68
Section 13.10. No Recourse Against Others. .......................69
Section 13.11. Successors.........................................69
Section 13.12. Duplicate Originals................................69
Section 13.13. Separability.......................................70
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INDENTURE, dated as of April 25, 1997 between FIRST SOUTH AFRICA
CORP., LTD., a Bermuda corporation (the "Company"), and AMERICAN STOCK TRANSFER
& TRUST COMPANY, a New York corporation (the "Trustee").
Intending to be legally bound hereby, each party agrees as follows
for the benefit of the other party and for the equal and ratable benefit of the
Holders of the Company's 9% Senior Subordinated Convertible Debentures due June
15, 2004 (the "Securities");
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ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. DEFINITIONS.
"AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
"AGENT" means any Registrar, Paying Agent, Conversion
Agent or co-registrar. See Section 2.03.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any duly authorized committee of that Board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or Assistant Secretary of the Company to have been duly adopted by the
Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"CAPITALIZED LEASES" means, with respect to any person, all
obligations of such person under any agreement to lease, or lease of, any real
or personal property that are required to be capitalized for financial reporting
purposes in accordance with generally accepted accounting principles and the
amount of Indebtedness shall be the capitalized amount of such obligations
determined in accordance with such principles.
"CAPITAL STOCK" means any class of capital stock of the Company as
it exists on the date of this Indenture or as it may be constituted from time to
time and warrants, options and similar rights to acquire any such capital stock.
"COMPANY" means the party named as such in this Indenture unless and
until a successor replaces it in accordance with this Indenture and thereafter
means the successor.
"COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, a written
request, order or consent signed in the name of the Company by its Chairman of
the Board, President, any
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Vice President, its Treasury or Secretary or an Assistant Secretary, and
delivered to the Trustee.
"CONSOLIDATED NET INCOME" means, for any period, the aggregate of
the Net Income of the Company and its Subsidiaries (if any) for such period, on
a consolidated basis, determined in accordance with generally accepted
accounting principles, provided that (i) the Net Income of any person which is
not a Subsidiary or is accounted for by the Company by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid to the Company or a Subsidiary, and (ii) the Net Income of
any person acquired in a pooling of interests transaction for any period prior
to the date of such acquisition shall be excluded. "Net Income" of any person
shall mean the net income (loss) of such person, determined in accordance with
generally accepted accounting principles; excluding, however, from the
determination of Net Income any gain (but not loss) realized upon the sale or
other disposition (including, without limitation, dispositions pursuant to
leaseback transactions, except any gain from such leaseback transaction may be
amortized into Net Income over the term of the lease) of any real property or
equipment of such person which is not sold or otherwise disposed of in the
ordinary course of business, or of any capital stock of the Company or a
Subsidiary owned by such person. Should the Company not have a Subsidiary during
any measuring period, the Net Income for such period shall be determined on a
separate company basis.
"DEFAULT" means any event which is, or after notice, or passage of
time or both would be, an Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as in
effect on the date of execution of this Indenture and as may thereafter be
amended.
"HOLDER" or "SECURITYHOLDER" means the person in whose name a
Security is registered on the Registrar's books.
"INDEBTEDNESS" means, without duplication, with respect to any
person, as of any date, the principal of and any premium or interest on (a) all
indebtedness of such person for borrowed money and purchase money obligations
(including all indebtedness evidenced by notes, bonds, debentures or other
securities sold by
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such person for money) or in respect of letters of credit or similar instruments
issued for its own account, (b) all indebtedness incurred by such person in the
acquisition (whether by way of purchase, merger, consolidation or otherwise and
whether by such person or another person) of any business, real property or
other assets (except assets acquired in the ordinary course of the conduct of
the acquiror's usual business), (c) all Capitalized Leases, (d) guarantees by
such person of indebtedness described in clauses (a), (b) or (c), and (e)
renewals, extensions, refundings, deferrals, restructurings, amendments and
modifications of any such indebtedness, obligation or guarantee.
"INDENTURE" means this Indenture as amended or supplemented from
time to time.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment
of interest on the Securities.
"OFFICER" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary or any Assistant Secretary of the
Company.
"OFFICERS' CERTIFICATE" means a or any Assistant Secretary
certificate signed by two Officers or by an Officer (other than the Secretary)
and an Assistant Secretary of the Company.
"OPINION OF COUNSEL" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
"PARENT" with respect to a person, means any corporation,
partnership, joint venture or other business entity which owns, directly or
through one or more Subsidiaries, shares of stock or other interests having
general voting power under ordinary circumstances to elect a majority of the
board of directors, managers, trustees or other governing body of such person.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
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"PRINCIPAL" of a debt security means the principal of the security
plus the premium, if any, on the security.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Securities means the date specified for that purpose in the
Securities.
"RESTRICTED SECURITIES" means Securities which were acquired by the
Holder thereof other than pursuant to an effective registration statement under
the Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Securities described above and
issued under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as in effect on
the date of execution of this Indenture and as may thereafter be amended.
"SPECIAL RECORD DATE" for the payment of any defaulted interest
means the date fixed by the Trustee pursuant to Section 2.12.
"STATED MATURITY", when used with respect to the Securities or any
installment of principal thereof or interest thereon, means the date specified
in the Securities as the fixed date on which the principal of such Securities or
such installment of principal or interest is due and payable.
"SUBSIDIARY" means any person of which at the time of determination
made under this Indenture at least a majority of capital stock having ordinary
voting power for the election of directors or other governing body of such
person is owned by the Company directly or through one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as in effect on the date of execution of this Indenture.
"TRADING DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are
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not traded on the exchange or in the market which is the principal United States
market for the Common Stock of the Company, as determined by the Board of
Directors of the Company.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
"TRUST OFFICER" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
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Section 1.02. OTHER DEFINITIONS.
DEFINED
TERM IN SECTION
---- ----------
"Accelerated Redemption Obligations"........... 3.07
"Bankruptcy Law"............................... 6.01
"Business Day"................................. 4.10
"Common Stock"................................. 10.01
"Conversion Agent"............................. 2.03
"Custodian".................................... 6.01
"Defaulted Interest"........................... 2.12
"Disqualified Stock"........................... 4.07
"Equity Interest".............................. 4.07
"Event of Default"............................. 6.01
"Legal Holiday"................................ 13.08
"Offering Price"............................... 10.07
"Paying Agent"................................. 2.03
"Quoted Price"................................. 10.03
"Registrar".................................... 2.03
"Representative"............................... 11.02
"Restricted Payments".......................... 4.07
"Senior Indebtedness".......................... 11.02
"U.S. Government Obligations".................. 8.01
Section 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
effect on the date of execution of this Indenture;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular; and
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(e) provisions apply to successive events and transactions.
ARTICLE II.
THE SECURITIES
Section 2.01. FORM AND DATING. The Securities and the Trustee's
certificate of authentication shall be substantially in the form set forth in
Exhibit A, the terms and provisions of which are a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage or agreements to which the Company is a party. The
Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its
authentication.
Section 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall
execute the Securities for the Company by manual or facsimile signature. The
Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until a duly authorized agent of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Securities for original issue in the
aggregate principal amount of up to $10,000,000 upon a written order of the
Company signed by an Officer of the Company. 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 Securities shall be issuable in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same right as an Agent to deal with the Company or
an affiliate.
Section 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for payment ("Paying Agent") and an office or
agency where Securities may be presented for conversion ("Conversion Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents. The term
"Paying Agent" includes any additional paying agent; the term "Conversion Agent"
includes any additional conversion agent. The Company may change any Paying
Agent, Registrar, Conversion Agent or co-registrar without notice to any
Securityholder.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any such Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Conversion Agent, Paying Agent,
Registrar or co-registrar.
The Company initially appoints the Trustee as the Registrar, Paying
Agent and Conversion Agent.
Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall
require each Paying Agent other than the
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Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of the Securityholders or the Trustee all moneys held by the Paying
Agent for the payment of principal of or interest on the Securities, and shall
notify the Trustee of any default by the Company in making any such payment.
While such default continues, the Trustee may require a Paying Agent to pay all
money held by it to the Trustee. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent shall have no further liability for the money. If the
Company acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Securityholders all money held by it as Paying
Agent.
Section 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee on or before the tenth day
prior to each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
Section 2.06. TRANSFER AND EXCHANGE. Subject to the requirements of
Section 2.13, where a Security is presented to the Registrar or a co-registrar
with a request to register a transfer, the Registrar shall register the transfer
as requested if duly endorsed or accompanied by a proper instrument or
instruments of assignment and transfer thereof and its requirements for such
transaction are met. Where Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registrations of transfers
and exchanges, the Company shall issue and the Trustee shall authenticate
Securities at the Registrar's request. Any exchange or transfer shall be without
charge, except that the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto.
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Neither the Company, the Trustee nor any other agent of the Company
shall be required (i) to issue, register the transfer of or exchange Securities
during a period beginning at the opening of 15 days before the day of any
selection of Securities for redemption under Section 3.01 and ending at the
close of business on the day of such day of selection, or (ii) to register the
transfer of or exchange of any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.
Section 2.07. REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Trustee or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security dated the date of the
lost, destroyed or wrongfully taken Security, if, in the case of a lost,
destroyed or wrongfully taken Security, the holder of such Security furnishes to
the Trustee evidence satisfactory to it, in its discretion, of the ownership of
and the destruction, loss or theft of such Security and shall furnish to the
Company and to the Trustee an indemnity bond sufficient in the judgment of the
Company and the Trustee to protect each of them and any agent for any loss which
any of them may suffer if a Security is replaced. The Company may charge for its
expenses in replacing a Security. Every replacement Security is an additional
obligation of the Company.
Section 2.08. OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those cancelled
by it, those delivered to it for cancellation, and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or one of its Subsidiaries or an Affiliate holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01, they cease to
be outstanding and interest on them ceases to accrue.
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Section 2.09. TREASURY SECURITIES. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or an Affiliate
shall be considered as though they are not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities which the Trustee knows are
so owned shall be disregarded.
Section 2.10. TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
Section 2.11. CANCELLATION. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar, Paying Agent and
Conversion Agent shall forward to the Trustee any Securities surrendered to them
for transfer, exchange, payment or conversion. The Trustee and no one else shall
cancel and shall, subject to the record-retention requirements of the Securities
Exchange Act of 1934, destroy Securities surrendered for transfer, exchange,
payment, replacement, conversion or cancellation and deliver a certificate of
such destruction to the Company unless the Company instructs the Trustee in
writing to deliver the cancelled Securities to the Company. The Company may not
issue new Securities to replace Securities that it has paid or that have been
delivered to the Trustee for cancellation or that any Securityholder has
converted pursuant to Article X.
Section 2.12. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name that Security is
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registered at the close of business on the Regular Record Date for such interest
payment.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security
and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
persons entitled to such Defaulted Interest as in this clause
provided. Thereupon, the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and
at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
thereof to be mailed, first-class postage prepaid, to each Holder of
Securities at his registered address, not less than 15 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
so mailed such Defaulted Interest shall be paid to
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the persons in whose names the Securities are registered at the
close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(b) The Company may make payment of any Defaulted Interest on
the Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange or automated trading system
on which such Securities may be listed, and upon such notice as may
be required by such exchange or automated trading system, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section
2.06, each Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 2.13. LEGENDING OF THE SECURITIES; RESTRICTION ON TRANSFER.
All Securities originally issued hereunder pursuant to the exemption from
registration provided in Regulation D under the Securities Act shall bear the
following legend:
"The Securities represented by this certificate have not
been registered under the Securities Act of 1933, as amended
(the "Securities Act"), and may not be offered, sold or
otherwise transferred unless (i) a registration statement
under the Securities Act is in effect with regard thereto or
(ii) the Company has received an opinion of counsel
satisfactory to the Company that such registration is not
required under the Securities Act."
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Prior to any transfer of any Security bearing such legend, in whole
or in part, the Holder thereof shall furnish to the Company and the Trustee an
Opinion of Counsel, who shall be reasonably satisfactory to the Company and the
Trustee, in substance reasonably satisfactory to the Company and the Trustee, to
the effect that such Security has been registered under the Securities Act and
any applicable state laws, or registration is not required thereunder.
Section 2.14. NOTIFICATION REGARDING RESTRICTED SECURITIES. The
Company shall deliver to the Trustee and the Paying Agent an Officers'
Certificate and an Opinion of Counsel notifying the Trustee and the Paying Agent
at any time that the Company becomes aware that a Security ceases to be a
Restricted Security. The Trustee and Paying Agent may conclusively rely on such
notice and shall treat each Security as a Restricted Security until they receive
such notice with respect to such Security. The Company shall deliver to the
Trustee and the Paying Agent an Officers' Certificate and an Opinion of Counsel
notifying the Trustee and the Paying Agent whenever any registration statement
registering any of the Securities under the Securities Act is declared effective
by the SEC.
Section 2.15. CUSIP NUMBERS. The Company in issuing the Securities
may use a "CUSIP" number, and if so, the Trustee shall use the CUSIP number in
notices of redemption or exchange as a convenience to Holders; 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 III.
REDEMPTION
Section 3.01. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The Securities
may be redeemed at the election of the Company as a whole or in part from time
to time commencing on the period and at the redemption prices specified in
paragraph 5 of the Securities, together with accrued interest to the redemption
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date. If the Company wishes to redeem any or all of the Securities pursuant to
paragraph 5 of the Securities, the Company shall, at least forty five (45) days
prior to the redemption date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such redemption date and
of the principal amount of Securities to be redeemed. In the case of any
redemption, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with the provisions of this Indenture and of the
Securities with respect thereto.
Section 3.02. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If
less than all the Securities are to be redeemed pursuant to paragraph 5 of the
Securities, the particular Securities to be redeemed shall be selected by the
Trustee, from the Securities not previously called for redemption by a method
that complies with the requirements of any exchange or automated quotation
system on which the Securities are listed and that the Trustee deems fair and
appropriate. The Trustee shall make the selection not more than sixty (60) days
and not less than thirty (30) days before the redemption date. Securities in
denominations of $1,000 may only be redeemed in whole. The Trustee may select
for redemption portions (equal to $1,000 or any integral multiple thereof) of
the principal of Securities that have denominations larger than $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be called
for redemption.
Section 3.03. NOTICE OF REDEMPTION. At least thirty (30) days but
not more than sixty (60) days before a redemption date, the Company shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's last registered address.
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The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price (determined in
accordance with paragraph 5 of the
Securities);
(3) the conversion price;
(4) the name and address of the Trustee and
Conversion Agent;
(5) that Securities called for redemption may be
converted at any time before the close of business
on the fifth business day prior to the redemption
date;
(6) that Holders who want to convert
Securities must satisfy the requirements
in paragraph 8 of the Securities;
(7) that Securities called for redemption
must be surrendered to the Trustee to
collect the redemption price;
(8) that interest on Securities called for
redemption ceases to accrue on and after
the redemption date; and
(9) if any Security is being redeemed in part, the
portion of the principal amount of such Security
to be redeemed and that, after the redemption
date, upon surrender of such Security, a new
Security or Securities in principal amount equal
to the unredeemed portion will be issued.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
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Section 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price. Upon surrender to the Trustee
(subject, however, to Section 2.13 and to the deposit by the Company of the
redemption price pursuant to Section 3.05), such Securities shall be paid at the
redemption price, plus accrued interest to the redemption date, but interest
installments whose maturity is on or prior to the redemption date will be
payable to the holder of record at the close of business on the relevant record
dates referred to in the Securities.
Section 3.05. DEPOSIT OF REDEMPTION PRICE. Before the redemption
date, the Company shall deposit with the Trustee money sufficient to pay the
redemption price of, and accrued interest on, all Securities to be redeemed on
that date. The Trustee shall return to the Company any money not required for
that purpose.
Section 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Trustee shall authenticate for the Holder
a new Security equal in principal amount to the unredeemed portion of the
Security surrendered.
ARTICLE IV.
COVENANTS
Section 4.01. PAYMENT OF SECURITIES. The Company shall pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture, subject to the subordination
provisions of Article XI. Principal and interest shall be considered paid on the
date due if the Trustee or the Paying Agent holds at the opening of business on
that date money designated for and sufficient to pay all principal and interest
then due.
The Company shall pay interest on overdue principal, compounded
quarterly, at the rate borne by the Securities; it shall pay interest on overdue
installments of interest at the
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same rate, in each case compounded quarterly, to the extent lawful.
Section 4.02. SEC REPORTS. Within 15 days after the Company files
with the SEC copies of its annual reports and other information, documents and
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which it is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act, the Company shall deliver
the same with the Trustee. The Company shall timely comply with its reporting
and filing obligations under the applicable federal securities laws.
Section 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to
the Trustee within 105 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with 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 contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions hereof (or, if a Default or Events of Default shall
have occurred, describing all such Defaults or Events of Default 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 principal of or
interest, if any, on the Securities are prohibited.
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee forthwith upon becoming aware of (i) any Default, Event
of Default or default in the performance of any covenant, agreement or condition
in this Indenture or (ii) any event or default under any other mortgage,
Indenture or instrument as that term is used in Section 6.01(5), an Officers'
Certificate specifying such Default, Event of Default or default.
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Section 4.04. USURY LAWS. The Company will not assert, plead (as a
defense or otherwise) or in any manner whatsoever claim (and will actively
resist any attempt to compel it to assert, plead or claim) in any action, suit
or proceeding that the interest rate on the Securities violates present or
future usury or other laws relating to the interest payable on any indebtedness
and will not otherwise avail itself (and will actively resist any attempt to
compel it to avail itself) of the benefits of any such laws.
Section 4.05. INVESTMENT COMPANY ACT. The Company will not, and will
take such action so that none of the Subsidiaries will, register as, or conduct
their respective businesses or take any action which shall cause any of them to
become or be deemed to be, an investment company as defined under the Investment
Company Act of 1940 and the rules and regulations of the SEC thereunder.
Section 4.06. DIVIDEND AND PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction on the ability of any
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or any other interest or participation in, or measured by, its profits,
owned by the Company or any of its Subsidiaries or pay any Indebtedness owed to
the Company or any of its Subsidiaries, (ii) make loans or advances to the
Company or any of its Subsidiaries, or (iii) transfer any of its properties or
assets to the Company or any of its Subsidiaries, except for such encumbrances
or restrictions in existence on the date of this Indenture, including any
renewal, refunding or refinancing thereof, and encumbrances or restrictions
existing under or by reason of (A) this Indenture and the Securities, (B)
applicable law, (C) any instrument governing Indebtedness or capital stock of a
person acquired by the Company, or any of its Subsidiaries, in existence at the
time of such acquisition (but not in connection with such acquisition),
including any renewals, refundings or refinancings thereof, provided, that, the
restrictions contained in such renewals, refundings or refinancings are no more
restrictive than those contained in such instrument at the time of such
acquisition, which encumbrance or restriction is not applicable to any person,
or to the properties
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or assets of any person, other than the person, or the property or assets of the
person, so acquired by the Company or its Subsidiaries, (D) by reason of
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices, or (E) with respect to
clause (iii) above, purchase money obligations for property acquired in the
ordinary course of business.
Section 4.07. RESTRICTION ON PAYMENT OF DIVIDENDS AND STOCK
REPURCHASES. The Company may not, (i) declare or pay any dividend or make any
distribution on its Capital Stock of any class to its stockholders (other than
dividends or distributions payable in shares of Capital Stock of the Company),
or (ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interest of the Company, any Subsidiary or other Affiliate (other than any such
Equity Interests owned by the Company or any Subsidiary or other than in
connection with an acquisition of any business entity where payment includes a
stock in lieu of cash component), or (iii) permit any Subsidiary to declare or
pay any dividend on, or make any contribution to its stockholders of, any shares
of its capital stock, except to the Company or any Subsidiary (other than
dividends or distributions payable in Equity Interests of it or the Company), or
(iv) permit any Subsidiary to purchase, redeem or otherwise acquire or retire
for value any Equity Interests of such Subsidiary, the Company or any Affiliate
of either of them (other than any such Equity Interests owned by the Company or
any Subsidiary) (such restricted dividends, distributions, purchases,
redemptions or other acquisitions or retirements being collectively referred to
as "Restricted Payments") if at the time of such Restricted Payment:
(a) an Event of Default shall have occurred and be
continuing, or shall occur as a consequence thereof; or
(b) if upon giving effect to such Restricted Payment the
aggregate amount expended for all such Restricted Payments
(the amount expended for such purposes, if other than cash, to
be conclusively determined by the Board of Directors as
evidenced by a Board Resolution) subsequent to the date of
execution of this Indenture shall exceed the sum of:
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(1) 50% of the aggregate Consolidated Net Income
of the Company accrued during fiscal quarters ending
subsequent to December 31, 1996;
(2) the aggregate net proceeds, including cash and
the fair market value of property other than cash (as
determined in good faith by the Board of Directors as
evidenced by a Board Resolution), received by the Company from
the issue or sale subsequent to the date of execution of this
Indenture of Capital Stock of the Company (other than Capital
Stock subject to mandatory redemption or redemption at the
option of the holder, in either case prior to the maturity of
the Securities (collectively "Disqualified Stock")) or of
warrants to purchase such Capital Stock (other than warrants
to purchase such Disqualified Stock) other than in connection
with the conversion of any Indebtedness;
(3) the aggregate net proceeds received by the
Company subsequent to the date of execution of this Indenture
from the issue or sale of any debt securities or Disqualified
Stock of the Company, if, at such time, such debt securities
or Disqualified Stock, as the case may be, have been converted
into Capital Stock of the Company; and
(4) $2,000,000.
For purposes of any calculation pursuant to the preceding sentence which is
required to be made within 60 days after the declaration of a dividend by the
Company or any Subsidiary, such dividend shall be deemed to be paid at the date
of declaration, and the subsequent payment of such dividend during such 60-day
period shall not be treated as an additional Restricted Payment.
Notwithstanding the foregoing, the provisions of this Section 4.07
will not prevent (i) the payment of any dividend within 60 days after the date
of declaration with the payment complied with the foregoing provisions on the
date of declaration; or (ii) the retirement of any shares of the
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Company's Capital Stock by exchange for, or out of the proceeds of the
substantially concurrent sale (other than to a Subsidiary) of, other shares of
its Capital Stock (other than any Disqualified Stock), and neither such
retirement nor the proceeds of any such sale or exchange shall be included in
any computation made under this Section 4.07.
"Equity Interest" means Capital Stock or warrants, options or other
rights to acquire Capital Stock.
Section 4.08. RESTRICTION ON TRANSFER WITH AFFILIATES. The Company
will not, nor permit any Subsidiary to,(i) engage in any transaction with an
affiliate of the Company on terms less favorable to the Company or such
Subsidiary than that which might be obtained at the time of such transactions
from unrelated entities, (ii) loan or advance any funds to any Affiliate (other
than to the Company or any of its direct or indirect Subsidiaries) in excess of
$250,000 in the aggregate outstanding at any time, or (iii) purchase less than
all of the Securities of an Affiliate or an entity controlled by any Affiliate;
provided, however, that any such purchase of all Securities shall be deemed fair
to the Company as evidenced by an opinion rendered by an investment banker
selected by independent directors of the Company. The restrictions in this
Section 4.08 shall not apply to intercompany advances or bona fide transactions
with or between Subsidiaries and/or the Company to the extent not expressly
precluded in this Indenture.
Section 4.09. INCURRENCE OF INDEBTEDNESS. The Company will not,
directly or indirectly, create, incur, issue, assume, guarantee or become liable
with respect to, contingently or otherwise, or extend the maturity of, any
Indebtedness except for: (i) the Securities and other obligations under this
Indenture; (ii) Indebtedness of the Company outstanding as of December 31, 1996;
(iii) Senior Indebtedness; (iv) Capitalized Lease obligations, letters of credit
to finance trade payables, in each case to the extent incurred in the ordinary
course of business of the Company and its Subsidiaries; (v) Indebtedness of the
Company or a Subsidiary of the Company secured by liens on assets used in the
ordinary course of business by the Company or any Subsidiary and of which the
value of the collateral is equal to at least 50% of the outstanding principal
amount of such Indebtedness; (vi) Indebtedness which is expressly junior in
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right of payment to the Securities; or (vii) any amendment, removal, extension
or refunding of such Indebtedness.
Section 4.10. PLAN OF LIQUIDATION. The Board of Directors or the
stockholders of the Company may not adopt any plan of liquidation (other than a
plan of liquidation incident to a permitted merger, consolidation, sale of
assets or other transaction described in Article V of this Indenture) which
provides for, contemplates or the effectuation of which is preceded by, (i) the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of the Company otherwise than substantially as an entirety (Article V of
this Indenture being the Article which governs any such sale, lease, conveyance
or other disposition substantially as an entirety) and (ii) the distribution of
all or substantially all of the proceeds of such sale, lease, conveyance or
other disposition and of the remaining assets of the Company to the holders of
Capital Stock of the Company, unless the Company shall have made provision for
the satisfaction of the Company's obligations hereunder and the Securities as to
the payment of principal and interest, in the amounts and in the manner set
forth below, (A) immediately following the adoption of such plan or (B) not less
than five business days ("Business Days") prior to the making of any such
liquidating distributions, whichever occurs first. The Company shall be deemed
to make provision for such payment only if the Company irrevocably deposits in
trust with the Trustee U.S. Government Obligations (as defined in Section 8.01)
sufficient to pay in full the redemption price that would be payable under
paragraph 5 of the Securities on the last Business Day of the second full
calendar month following the month in which such provision is made, plus
interest accrued and to accrue on the Securities to the last Business Day of
such second calendar month. No such liquidating distributions may be made by the
Company unless five Business Days have elapsed from the making of such provision
for payment of the Securities and the Company shall have certified to the
Trustee by an Officers' Certificate that the provisions of this Section 4.10
have been complied with.
The Company shall redeem all of the then outstanding Securities on
the last Business Day of the second full calendar month following the month in
which provision is made by the Company for the payment of principal and interest
pursuant to the preceding paragraph, at the same redemption price payable on the
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date of such redemption under paragraph 5 of the Securities, plus all accrued
and unpaid interest on such Securities to the date of such redemption.
Notwithstanding the foregoing, no liquidating distributions may be
made by the Company if a Default or Event of Default has occurred and is
continuing nor may any such liquidating distribution be made if for any reason
the application of the proceeds of any instruments held or to be held in trust
by the Trustee pursuant to this Section 4.10 are or could become subject to any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting the Trustee's application of such proceeds in the
manner provided in this Section 4.10.
At least 10 days but not more than 90 days prior to the date on
which the Securities are to be redeemed by the Company pursuant to this Section
4.10, the Company shall mail or cause the Trustee to mail, at the Company's
expense, a notice of redemption to each Holder stating that all of the
Securities are to be redeemed, identifying the Section of this Indenture
pursuant to which the Securities are to be redeemed, describing the facts which
require such redemption and otherwise complying with the notice provisions of
Section 3.03.
If the Company has irrevocably deposited in trust with the Trustee
U.S. Government Obligations in accordance with the provisions of this Section
4.10, the Company may terminate all of its obligations under this Indenture
other than the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
7.07, 7.08 and 8.03, and in Article IV and Article XI, all of which shall
survive until the Securities are no longer outstanding. Thereafter, only the
Company's obligations in Section 7.07 and 8.03 shall survive.
After a deposit made pursuant to this Section 4.10, the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture except for those surviving obligations specified above.
In order to have money available on the applicable redemption date
specified above to pay principal and interest on the Securities, and on each
principal or Interest Payment Date,
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if any, occurring prior to such payment date to pay principal and interest on
the Securities, the U.S. Government Obligations shall be payable as to principal
or interest on or before such redemption date or principal or Interest Payment
Date in such amounts as will provide the necessary money. U.S. Government
Obligations shall not be callable at the issuer's option.
The Trustee shall hold in trust the U.S. Government Obligations
deposited with it pursuant to this Section 4.10. It shall apply the money from
U.S. Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal and interest on the Securities at the
times and in the amounts specified in this Indenture, including this Section
4.10, and in the Securities, including, without limitation, paragraph 1 thereof.
Money and securities so held in trust are subject to Article XI.
Section 4.11. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. If
the Company shall at any time act as its own Paying Agent, it will, on or before
each due date of the principal of or interest on the Securities, segregate and
hold in trust for the benefit of the Securityholders a sum sufficient to pay the
principal or interest so becoming due until such sum shall be paid to such
persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
on or prior to each date for the payment of the principal of or interest on the
Securities, deposit with a Paying Agent or the Trustee a sum sufficient to pay
the principal or interest so becoming due, such sum to be held in trust for the
benefit of the Securityholders; and, unless such Paying Agent is the Trustee,
the Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of or interest on the Securities
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(and on the Senior Indebtedness to the extent required by
Article XI) in trust for the benefit of the Securityholders
(and the holders of such Senior Indebtedness) until such sums
shall be paid to such persons or otherwise disposed of as
herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities) in the
making of any payment of principal or interest;
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent; and
(4) maintain such records as may reasonably be requested
by the Trustee and furnish to the Trustee such records as the
Trustee may require.
The Company may at any time pay, or direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such
sums to be held by the Trustee upon the same trusts as those upon which such
sums were held by the Company or such Paying Agent; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money, subject in all cases to the terms
and provisions of Article XI hereof.
ARTICLE V.
SUCCESSOR CORPORATION
Section 5.01. WHEN COMPANY MAY MERGE, ETC. The Company shall not
consolidate with or merge into, or transfer all or substantially all of its
assets in one or more related transactions, to, any person unless:
(1) the Company shall be the surviving entity, or the
corporation formed by or surviving any such consolidation or merger (if other
than the Company), or to which such sale,
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conveyance or lease shall have been made, shall expressly assume by supplemental
indenture all the obligations of the Company under the Securities and this
Indenture, except that it need not assume the obligations of the Company as to
conversion of Securities if pursuant to Section 10.18 the Company or another
person enters into a supplemental indenture obligating it to deliver the
securities, cash or other assets deliverable upon conversion of Securities;
(2) immediately after giving effect to such transaction no
Default or Event of Default shall have occurred and be continuing; and
(3) the corporation formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
conveyance or lease shall have been made, has a net worth not less than the
Consolidated Net Worth of the Company at the date hereof or immediately prior to
such merger or transfer of assets.
The Company shall deliver to the Trustee prior to the proposed
transaction an Officers' Certificate to the foregoing effect and an Opinion of
Counsel only as to clause (1) above stating that the proposed transaction and
such supplemental indenture comply with this Indenture.
The surviving, transferee or lessee corporation shall be the
successor Company, but the predecessor Company in the case of a transfer or
lease shall not be released from the obligation to pay the principal of and
interest on the Securities.
ARTICLE VI.
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any
Security when the same becomes due and payable and the Default continues for a
period of ten (10) days;
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(2) the Company defaults in the payment of principal and
premium, if any, of any Security when the same becomes due and payable and the
default continues for a period of ten (10) days;
(3) the Company defaults in the making of a deposit of any
sinking fund payment when and as due pursuant to this Indenture and the default
continues for a period of ten (10) days;
(4) the Company fails to comply with or perform any of its
other covenants or agreements in, or provisions of, the Securities or this
Indenture and the Default continues for the period and after the notice
specified below;
(5) the Company defaults under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company or under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed by the
Company which default shall constitute a failure to pay any portion of interest
or principal when due after any applicable grace period or if the effect of such
event of default is to cause or permit the acceleration of such indebtedness
prior to its expressed maturity, and such event of default results in an
acceleration of a principal amount of such indebtedness without such
indebtedness having been discharged or such acceleration having been rescinded
or annulled, provided, that the aggregate indebtedness in default under this
clause (5) is in excess of $200,000;
(6) the Company, pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for
relief against it in an involuntary case,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of
its property,
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(D) makes a general assignment for the
benefit of its creditors, or
(E) generally is unable to pay its debts as
the same become due;
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or
any Subsidiary or for all or substantially all of
its property, or
(C) orders the liquidation of the Company or
any Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; and
(8) in the event that the Company's reporting obligations
pursuant to Section 13 or 15(d) of the Exchange Act suspended or terminated.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law or other applicable and similar law for the relief of
debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities notifies the Company of the default and the Company does not cure the
default within 30 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If the Holders of 25% in principal amount of the outstanding
Securities request the Trustee to give such notice on their behalf, the Trustee
shall do so.
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Subject to the provisions of Sections 7.01 and 7.02, the Trustee
shall not be charged with knowledge of any Event of Default, other then an Event
of Default pursuant to Section 6.01(1) or 6.01(2), unless written notice thereof
shall have been given to the Trustee at its address set forth in Section 13.02
by the Company, the Paying Agent, the Holder of a Security or an agent of any
Holder or any holder of any indebtedness.
The Company shall promptly notify the Trustee of the occurrence of a
Default under clause (4) or (5).
Upon the occurrence of an Event of Default, the Holders of a
majority in principal amount of the outstanding Securities may select a person
to serve as director of the Company until the Event of Default is cured.
Section 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(6) and (7)) occurs and is continuing,
the Trustee by written notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the then outstanding Securities by written notice
to the Company and the Trustee, may declare to be due and payable immediately
the principal amount of the outstanding Securities plus accrued interest to the
date of acceleration. Upon such declaration such principal and interest shall be
due and payable immediately.
At any time after such a declaration of acceleration has been made,
the Holders of a majority in principal amount of the outstanding Securities, by
written notice to the Trustee, may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived, except nonpayment of
principal or interest that has become due solely because of the acceleration;
and if the Company has paid or deposited with the Trustee a sum sufficient to
pay all overdue installments of interest on all Securities, the principal of any
Securities which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Securities, and all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
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No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Section 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity, to collect the payment of principal of or interest on the Securities
or to enforce the performance of any provision of the Securities or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and recovery of judgment shall, after provision for
the payment of reasonable compensation, expense, 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 judgment has been recovered.
If the Trustee or any Securityholder has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Securityholder, then and in every such case the Company,
the Trustee and the Securityholders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the
Securityholders shall continue as though no such proceeding had been instituted.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All remedies are cumulative to the extent
permitted by law.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit
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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 6.04. WAIVER OF PAST DEFAULTS. Subject to Section 9.02, the
Holders of a majority in principal amount of the outstanding Securities by
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a continuing Default or Event of Default in the payment of
principal of or interest on any Security. When a Default is waived, it is cured.
Section 6.05. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of 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 the Trustee; provided, however:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee shall have the right to decline to follow any
such direction if the Trustee, being advised by an opinion of its counsel,
determines that the action so directed may not lawfully be taken or if the
Trustee in good faith shall, by an Officer, determine that the proceedings so
directed would involve it in personal liability or be unduly prejudicial to the
Holders not taking part in such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 6.06. LIMITATION ON SUITS. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
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(2) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within thirty
(30) days after receipt of the request and the offer and, if requested,
provision of indemnity; and
(5) during such 30-day period the Holders of a majority in
principal amount of the Securities do not give the Trustee a direction
inconsistent with such request.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the absolute and unconditional right
under this Indenture of any Holder of a Security to receive payment of principal
of and interest on the Security, on or after the respective due dates expressed
in the Security, or to bring suit for the enforcement of any such payment on or
after such respective dates, 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 bring suit for the enforcement of the right to
convert the Security shall not be impaired or affected without the consent of
the Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default in
payment of interest or principal specified in Section 6.01(1) or (2) occurs and
continues for a period of thirty (30) days, the Company, upon demand of the
Trustee, will pay to the Trustee, for the benefit of the Securityholders the
whole amount of principal and interest then due on such Securities; and in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses and
disbursements
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and advances of the Trustee, its agents and counsel. If the Company fails to pay
such amount forthwith upon such demand, the Trustee, in its own name and as
trustee of an express trust, may institute a judicial proceeding against the
Company and may prosecute such proceeding to judgment or final decree, and may
enforce the same to recover the amount of principal and interest remaining
unpaid adjudged or decreed to be payable in the manner provided by law out of
the property of the Company.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Securityholders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. In the case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company upon the Securities or the property of the
Company or its creditors, the Trustee (irrespective of whether the principal of
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(1) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Securities
and to file such 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 of the
Securityholders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same;
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and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07.
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 6.10. PRIORITIES. If the Trustee collects any money pursuant
to this Article, it shall pay out the money in the following order:
FIRST: to holders of Senior Indebtedness to the
extent required by Article XI;
SECOND: to the Trustee for amounts due under
Section 7.07;
THIRD: to Securityholders for amounts due and
unpaid on the Securities for principal and interest,
ratably, without preference or priority of any kind,
according to the amounts due and payable on the
Securities for principal and interest, respectively;
and
FOURTH: to the Company or any other person
lawfully entitled thereto.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section.
Section 6.11. UNDERTAKING FOR COSTS; NOTICE OF PROCEEDINGS. (a) In
any suit for the enforcement of any right
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or remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11(a) does not apply to a suit by the Trustee, a suit
by a Holder pursuant of Section 6.06 or 6.07 or a suit by Holders of more than
10% in principal amount of the then outstanding Securities.
(b) In the event that the Trustee institutes a judicial proceeding
or proceedings for the benefit of the Securityholders as provided in this
Indenture, the Trustee shall give prior written notice of such proceeding(s), if
any, to the holders of Senior Indebtedness or the Representative of such holders
where the Senior Indebtedness is known to the Trustee.
ARTICLE VII.
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default with respect to the Securities has
occurred and is continuing and the Trustee has actual knowledge thereof, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee undertakes to perform, with respect to the
Securities, only those duties that are specifically set forth in this Indenture
and no implied covenants
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or obligations shall be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may,
with respect to the Securities, conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall examine such certificates and opinions to
determine whether they conform to the requirements of this Indenture.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by an Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 6.05.
(4) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
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(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it.
(g) 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 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01,
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may require, and, in the absence of
bad faith on its part, rely upon, an Officers' Certificate;
(4) as a condition to the taking, suffering or omission of any
act contemplated hereunder, the Trustee may, but is not required to, consult
with counsel and the written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;
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(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys, and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(8) 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 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or 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, must comply with Sections 7.09.
Section 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities; it shall not be accountable for the Company's use of the proceeds
from the Securities; it shall not be responsible for the use or application of
any money received by any Paying Agent other than the Trustee; it shall not be
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responsible for any statement by the Company in the Indenture or document used
in connection with the sale of the Securities; and it shall not be responsible
for any statement in the Securities other than its certificate of
authentication.
Section 7.05. NOTICE OF DEFAULTS. 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 30 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security or
in the making of a required sinking fund payment pursuant to Article XII or a
redemption payment pursuant to Article III, the Trustee shall be protected in
withholding the notice if and so long as the board of directors of the Trustee,
the executive or any trust committee of such board and/or Officers of the
Trustee in good faith determine(s) that withholding the notice is in the
interests of Securityholders.
Section 7.06. COMPENSATION AND INDEMNITY. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation hereunder shall not be limited by any law on compensation
relating to the trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable disbursements, advances and
out-of-pocket expenses incurred by it. Such expenses shall include the
reasonable compensation and out-of-pocket expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee for and hold it harmless
against any expense, loss or liability incurred by it in connection with the
administration of this trust and its duties hereunder, except as set forth in
the next paragraph. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such counsel. The
Company shall not pay for any settlement of any claim without its consent, which
consent will not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
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To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except money or property held in trust to pay
principal of or interest on particular Securities, and subject to the terms and
provisions of Article XI.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.07. REPLACEMENT OF TRUSTEE. A resignation or removal of
the Trustee and the appointment of a successor Trustee shall become effective
only upon the successor Trustee's acceptance of appointment as provided in this
Section. The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company and may appoint a successor
Trustee with the Company's consent.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.09;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a Custodian or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
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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 outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.09, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee (subject to the lien provided for in Section 7.06), the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail notice of its succession
to each Securityholder. Notwithstanding replacement of the Trustee pursuant to
this Section, the Company's obligation under Section 7.06 shall continue for the
benefit of the retiring Trustee with respect to expenses, losses and liabilities
incurred by it prior to such replacement.
Section 7.08. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into or transfers all or substantially all
of its corporate trust business to, another corporation or national banking
association, the successor corporation or national banking association without
any further act shall be the successor Trustee.
Section 7.09. ELIGIBILITY; DISQUALIFICATION. 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.
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ARTICLE VIII.
DISCHARGE OF INDENTURE
Section 8.01. TERMINATION OF COMPANY'S OBLIGATIONS. The Company may
terminate all of its obligations under the Securities and this Indenture (except
that the Company's obligations under Sections 7.06 and 8.03 shall survive) if
all outstanding Securities previously authenticated and issued (other than
destroyed, lost or stolen Securities which have been replaced or paid) have been
delivered to the Trustee for cancellation.
In addition, the Company may terminate all of its obligations under
this Indenture if:
(1) the Securities mature within twelve months or all of them
are to be called for redemption within twelve months under arrangements
satisfactory to the Trustee for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations sufficient to pay principal of and interest
on the outstanding Securities to maturity or redemption, as the case may be, and
the Company delivers to the Trustee an Officers' Certificate stating that all
conditions precedent to satisfaction and discharge of the Indenture have been
complied with, and an Opinion of Counsel to the same effect. Immediately after
making the deposit, the Company shall give notice of such event and the proposed
date of payment to each Securityholder. The Company may make the deposit only
during the one-year period and only if Article XI permits it.
The Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
7.06, 7.07 and 8.03, and in Article IV and Article XI, however, shall survive
until the Securities are no longer outstanding. Thereafter, the Company's
obligations in Sections 7.06 and 8.03 shall survive.
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After a deposit and delivery of the Officers' Certificate and
Opinion of Counsel made pursuant to this Section 8.01, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities and this Indenture except for those surviving obligations
specified above.
In order to have money available on a payment date to pay principal
or interest on the Securities, the U.S. Government Obligations shall be payable
as to principal or interest on or before such payment date in such amounts as
will provide the necessary money. U.S. Government Obligations shall not be
callable at the issuer's option.
"U.S. Government Obligations" means direct obligations of the United
States for the payment of which the full faith and credit of the United States
is pledged.
Section 8.02. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to Section
8.01. It shall apply the deposited money and the money from the U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities. Money and Securities
so held in trust are subject to Article XI, except for money and Securities
previously paid as provided hereunder and held in trust for sinking fund
payments in accordance with Article XII.
Section 8.03. REPAYMENT TO COMPANY. Subject to Section 8.01, the
Trustee and the Paying Agent shall promptly pay to the Company upon request any
excess money or securities held by them at any time. The Trustee and the Paying
Agent shall pay to the Company upon request any money held by them for the
payment of principal or interest that remains unclaimed for two years. After
payment to the Company, Securityholders entitled to any of such money must look
to the Company for payment as general creditors unless applicable abandoned
property law designates another person and all liability of the Trustee or
Paying Agent with respect to such money shall thereupon cease.
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ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. WITHOUT CONSENT OF HOLDERS. The Company, when
authorized by a Board Resolution, and with the consent of the Trustee, may amend
or supplement this Indenture or the Securities without notice to or consent of
any Securityholders:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01 and 10.18;
(3) to provide for uncertificated Securities in addition to
certificated Securities; or
(4) to make any change that does not adversely affect the
legal rights of any Securityholder.
Section 9.02. WITH CONSENT OF HOLDERS. The Company, when authorized
by a Board Resolution, and with the consent of the Trustee, may amend or
supplement this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities. The Holders of a majority in principal
amount of the outstanding Securities may waive compliance by the Company with
any provision of this Indenture or the Securities without notice to any
Securityholder. Without the consent of each Securityholder affected, however, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of
interest, including default interest, on any Security;
(3) reduce the principal of or extend the fixed maturity of
any Security;
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(4) waive a default in the payment of the principal of or
interest on any Security;
(5) make any Security payable in money other than that stated
in the Security;
(6) make any change in Article X that adversely affects the
rights of a Holder of Securities;
(7) make any change in Section 6.04, 6.07 or 9.02 (third
sentence);
(8) make any change in Article XI that adversely affects the
rights of any Securityholder; or
(9) make any change in Article XII that adversely affects the
rights of any Securityholder.
An amendment under this Indenture may not make any change that
adversely affects the rights under Article XI of any holder of an issue of
Senior Indebtedness unless the holders of the issue pursuant to its terms
consent to the change.
After an amendment under this Section becomes effective, the Company
shall mail to the Holders a notice briefly describing the amendment.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplement, but it shall
be sufficient if such consent approves the substance thereof.
Section 9.03. REVOCATION AND EFFECT OF CONSENTS. Until an amendment,
supplement or waiver becomes effective, a consent to an amendment, supplement or
waiver by a Holder of a Security is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. Any such Holder or subsequent Holder, however, may revoke
the consent as to his Security or portion of a Security. Such revocation shall
be effective only if the Trustee receives the notice of
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revocation before the date the amendment, supplement or waiver becomes
effective.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder unless it is of the type described in any of clauses
(1) through (9) of Section 9.02. In such case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
Section 9.04. NOTATION ON OR EXCHANGE OF SECURITIES. If an
amendment, supplement or waiver changes the terms of a Security, the Trustee may
require the Holder of the Security to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Security regarding the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue, and the
Trustee shall authenticate, a new Security that reflects the changed terms.
Section 9.05. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall
sign any amendment, supplement or waiver authorized pursuant to this Article if
the amendment, supplement or waiver does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may
but need not sign it. In signing any amendment, supplement or waiver, the
Trustee may rely on and be fully protected by an Opinion of Counsel which shall
state that such amendment, supplement or waiver is permitted or authorized by
this Indenture. The Company may not sign an amendment until the Board of
Directors approves it.
ARTICLE X.
CONVERSION
Section 10.01. CONVERSION PRIVILEGE. Subject to and upon compliance
with the provisions of this Article, a Securityholder may convert a Security
into Common Stock at any time in whole or from time to time in part as stated in
paragraph
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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 initial conversion price is stated in paragraph 7 of the
Securities. The conversion price is subject to adjustment.
A Holder may convert a portion of a Security if the portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to conversion of all of a Security also apply to conversion to a portion
of it.
"Common Stock" means Common Stock, $.01 par value per share, of the
Company, as it exists on the date of this Indenture or as it may be constituted
from time to time.
Any portion of any Security converted into Common Stock pursuant to
this Indenture shall be deemed to have been paid in full upon such conversion.
Thereafter, this Indenture shall no longer apply to the converted Security
(I.E., the Common Stock), and no holder of any Common Stock received in
conversion shall have any rights under this Indenture respecting such former
Security or Common Stock, provided, that, this Indenture shall continue to
apply, and the Securityholder shall have the benefits hereunder, respecting any
portion of any Security not so converted.
Section 10.02. CONVERSION PROCEDURE. To convert a Security a Holder
must satisfy the requirements in paragraph 7 of the Securities. The date on
which the Holder satisfies all those requirements is the conversion date. As
soon as practical, the Company shall deliver through the Conversion Agent a
certificate for the number of full shares of Common Stock issuable upon the
conversion and a check for 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.
No payment or adjustment will be made for accrued interest on a
converted Security or dividends on any Common Stock issued on conversion.
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If a Holder converts more than one Security at the same time, the
number of full shares issuable upon the conversion shall be based on the total
principal amount of the Securities converted.
Upon a surrender of a Security that is converted in part, the
Company shall issue and the Trustee shall authenticate for the Holder a new
Security equal in principal amount to the unconverted portion of the Security
surrendered.
If the last day on which a Security may be converted is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
Section 10.03. 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 of a full share by the fraction and
round the result to the nearest cent.
The current market price of a share of Common Stock is the quoted
price (the "Quoted Price") of the Common Stock on the New York Stock Exchange
(or on such national securities exchange or automated trading system on which
the Common Stock is then primarily traded) on the last Trading Day prior to the
conversion date. In the absence of such a quotation, the Company shall determine
the current market price on the basis of such quotations as it considers
appropriate.
Section 10.04. TAXES ON CONVERSION. If a Holder of a Security
converts it, the Company shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Common Stock upon the conversion.
However, the Holder shall pay any such tax which is due because the shares are
issued in a name other than the Holder's name.
Section 10.05. COMPANY TO PROVIDE STOCK. The Company shall reserve
out of its authorized but unissued Common Stock or its Common Stock held in
treasury enough shares of Common Stock to permit the conversion of the
Securities.
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All shares of Common Stock which may be issued upon conversion of
the Securities shall be fully paid and non-assessable.
The Company will endeavor to comply with all securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Securities and will endeavor to list such shares on each national securities
exchange on which the Common Stock is listed.
Section 10.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the
Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) makes a distribution on its Common Stock in shares of its
Capital Stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares
of its Capital Stock;
then the conversion privilege and the conversion price in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares of Capital Stock of the
Company which he would have owned immediately following such action if he had
converted the Security immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of it
may receive shares of two or more classes of Capital Stock of the Company, the
Company shall determine the
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allocation of the adjusted conversion price between the classes of Capital
Stock. After such allocation, the conversion privilege and the conversion price
of each class of Capital Stock shall thereafter be subject to adjustment on
terms comparable to those applicable to Common Stock in this Article.
Section 10.07. ADJUSTMENT FOR RIGHTS ISSUE. If the Company
distributes any rights or warrants to all holders of its Common Stock entitling
them for a period expiring within 60 days after the record date mentioned below
to subscribe for or purchase shares of Common Stock at a price per share less
than the current market price per share on that record date, then the conversion
privilege and the conversion price in effect immediately prior to such action
shall be adjusted to equal the offering price (the "Offering Price") per share
of the additional shares if such Offering Price is less than the then conversion
price.
The adjustment shall be made successively whenever any such rights
or warrants are issued and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the rights or
warrants.
Section 10.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company
distributes to all holders of its Common Stock any of its assets or debt
securities or any rights or warrants to purchase debt securities, assets or
other securities of the Company, the conversion price shall be adjusted in
accordance with the formula:
M - F
-----
C'= C x M
where:
C' = the adjusted conversion price.
C = the current conversion price.
M = the current market price per share of Common
Stock on the record date mentioned below.
F = the fair market value on the record date of the
assets, securities, rights or warrants applicable to one
share of Common Stock. The Board of Directors shall
determine the fair market value.
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The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This Section does not apply to cash dividends or cash distributions
paid out of consolidated current or retained earnings as shown on the books of
the Company. Also, this Section does not apply to rights or warrants referred to
in Section 10.07.
Section 10.09. ADJUSTMENTS FOR COMMON STOCK ISSUE. If the Company
issues shares of Common Stock for a consideration per share less than the
current market price per share on the date the Company fixes the Offering Price
of such additional shares, then the conversion privilege and the conversion
price in effect immediately prior to such action shall be adjusted to equal the
Offering Price if such Offering Price is less than the conversion price.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This Section does not apply to (i) any of the transactions described
in Sections 10.07 and 10.08, (ii) the conversion of Securities, or the
conversion or exchange of other securities convertible or exchangeable for
Common Stock, (iii) Common Stock issued to the Company's employees under bona
fide employee benefit plans adopted by the Board of Directors and approved by
the holders of Common Stock when required by law, if such Common Stock would
otherwise be covered by this Section (but only to the extent that the aggregate
number of shares excluded hereby and issued after the date of this Indenture
shall not exceed 5% of the Common Stock outstanding at the time of the adoption
of each such plan, exclusive of antidilution adjustments thereunder), (iv)
Common Stock upon the exercise of rights or warrants issued to the holders of
Common Stock, (v) Common Stock issued, directly or indirectly, to stockholders
of any person which merges into the Company in proportion to their stock
holdings of such person immediately prior to such merger, upon such merger, (vi)
Common Stock issued in a bona fide public offering pursuant to a firm commitment
underwriting,(vii) Common
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Stock issued upon the exercise of options or warrants issued by the Company
prior to the date of this Indenture, or (viii) Common Stock issued pursuant to
any transaction contemplated by Section 4.07(ii) or any other provision of this
Indenture.
Section 10.10. ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE. If the
Company issues any securities convertible into or exchangeable for Common Stock
(other than securities issued in transactions described in Sections 10.07 and
10.08 or the Securities) for a consideration per share of Common Stock initially
deliverable upon conversion or exchange of such securities less than the current
market price per share on the date of issuance of such securities, then the
conversion privilege and the conversion price in effect immediately prior to
such action shall be adjusted to equal the Offering Price if such Offering Price
is less than the then conversion price.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This Section does not apply to (i) convertible securities issued to
stockholders of any person which merges into the Company, or with a Subsidiary
of the Company, in proportion to their stock holdings of such person immediately
prior to such merger, upon such merger or any similar transactions (including
the purchase of assets or stock) or (ii) convertible securities issued in a bona
fide public offering pursuant to a firm commitment underwriting.
Section 10.11. CURRENT MARKET PRICE. In Sections 10.07, 10.08,
10.09, and 10.10 the current market price per share of Common Stock on any date
is the average of the Quoted Prices of the Common Stock for 30 consecutive
Trading Days commencing 45 Trading Days before the date in question. In the
absence of one or more such quotations, the Company shall determine the current
market price on the basis of such quotations as it considers appropriate.
Section 10.12. CONSIDERATION RECEIVED. For purposes of any
computation respecting consideration received pursuant to Sections 10.09 and
10.10, the following shall apply:
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(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock for
a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined in good faith by the Board of Directors
(irrespective of the accounting treatment thereof), whose
determination shall be conclusive, and described in a Board
Resolution which shall be filed with the Trustee; and
(3) in the case of the issuance of securities convertible into
or exchangeable for shares, the aggregate consideration received
therefor shall be deemed to be the consideration received by the
Company for the issuance of such securities plus the additional
minimum consideration, if any, to be received by the Company upon
the conversion or exchange thereof (the consideration in each case
to be determined in the same manner as provided in clauses (1) and
(2) of this Section).
Section 10.13. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the
conversion price need be made unless the adjustment would require an increase or
decrease of at least 1% in the conversion price. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
Section 10.14. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be
made for a transaction referred to in Sections 10.06, 10.07, 10.08, 10.09 or
10.10 if Securityholders are to
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participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Stock participate in the transaction.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.
Section 10.15. NOTICE OF ADJUSTMENT. Whenever the conversion price
is adjusted, the Company shall promptly mail to Securityholders a notice of the
adjustment. The Company shall file with the Trustee a certificate from the
Company's independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct.
Section 10.16. VOLUNTARY REDUCTION. The Company from time to time
may reduce the conversion price by any amount for any period of time if the
period is at least 20 days and if the reduction is irrevocable during the
period, provided, that in no event may the conversion price be less than the par
value of a share of Common Stock.
Whenever the conversion price is reduced, the Company shall mail to
Securityholders a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced conversion price takes effect. The
notice shall state the reduced conversion price and the period it will be in
effect.
A reduction of the conversion price does not change or adjust the
conversion price otherwise in effect for purposes of Sections 10.06, 10.07,
10.08, 10.09 and 10.10.
Section 10.17. NOTICE OF CERTAIN TRANSACTIONS.
If:
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(1) the Company takes any action that would require an
adjustment in the conversion price pursuant to Sections 10.06,
10.07, 10.08, 10.09 or 10.10 and if the Company does not let
Securityholders participate pursuant to Section 10.14;
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 10.18; or
(3) there is a liquidation or dissolution of the Company,
the Company shall mail to Securityholders a notice stating the
proposed record date for a dividend or distribution or the
proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at
least 15 days before such date. Failure to mail the notice or any
defect in it shall not affect the validity of the transaction.
Section 10.18. REORGANIZATION OF COMPANY. If the Company is a party
to a transaction subject to Section 5.01, upon consummation of such transaction
the Securities shall automatically become convertible into the kind and amount
of securities, cash or other assets which the Holder of a Security would have
owned immediately after the consolidation, merger, transfer or lease if the
Holder had converted the Security immediately before the effective date of the
transaction. Concurrently with the consummation of such transaction, the
corporation formed by or surviving any such consolidation or merger if other
than the Company, or the person to which such sale or conveyance shall have been
made, shall enter into a supplemental indenture so providing and further
providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Article. The successor Company
shall mail to Securityholders a notice describing the supplemental indenture.
If the issuer of securities deliverable upon conversion of
Securities under the supplemental indenture is an Affiliate of
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the formed, surviving, transferee or lessee corporation, that issuer shall join
in the supplemental indenture.
If this Section applies, Sections 10.06, 10.07, 10.08 and 10.09 do
not apply.
Section 10.19. COMPANY DETERMINATION FINAL. Any determination that
the Company or the Board of Directors must make pursuant to Section 10.03,
10.06, 10.08, 10.09, 10.10, 10.11, 10.12 or 10.14 is conclusive.
Section 10.20. TRUSTEE'S DISCLAIMER. The Trustee has no duty to
determine when an adjustment under this Article should be made, how it should be
made or what it should be. The Trustee has no duty to determine whether any
provisions of a supplemental indenture under Section 10.18 are correct. The
Trustee makes no representation as to the validity or value of any securities or
assets issued upon conversion of Securities. The Trustee shall not be
responsible for the Company's failure to comply with this Article. Each
Conversion Agent other than the Company shall have the same protection under
this Section as the Trustee.
ARTICLE XI.
SUBORDINATION
Section 11.01. AGREEMENT TO SUBORDINATE. The Company and the Trustee
agree, and each Securityholder by accepting a Security agrees, that the
indebtedness evidenced by the Securities is subordinated in right of payment, to
the extent and in the manner provided in this Article, to the prior payments in
full of all Senior Indebtedness, whether outstanding at the date of this
Indenture or later incurred, and that the subordination is for the benefit of
the holders of Senior Indebtedness. Notwithstanding anything in this Indenture
or any Security to the contrary, any and all payments, distributions, proceeds,
moneys and/or other assets and properties paid to or collected, realized, or
otherwise received by the Trustee, the Paying Agent or any Securityholder in
connection with any payment or other action by the Company, any Subsidiary or
any other person acting on behalf of the Company, or any exercise or other
enforcement
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under the Indenture or any Security, shall be subject to the terms and
provisions of this Article.
Section 11.02. CERTAIN DEFINITIONS.
"Representatives" means the indenture trustee or other
trustee, agent, administrator or representative for an issue of Senior
Indebtedness as and if designated by the holder or holders of such Senior
Indebtedness from time to time by written notice to the Trustee from such
holder(s) or such other person.
"Senior Indebtedness" means all Indebtedness of the Company
for money borrowed from a bank, insurance company or any other institutional
lender, whether secured by assets of the Company or any Subsidiary or unsecured,
outstanding at any time (including future advances), all Indebtedness of the
Company which is secured by liens or assets used in the ordinary course of
business by the Company or any Subsidiary and the value of the collateral is
equal to at least 50% of the then outstanding principal amount of such
Indebtedness, all together with interest thereon, but excluding from Senior
Indebtedness, Indebtedness of the Company to any of its Subsidiaries for money
borrowed or advanced from any such Subsidiary and Indebtedness which by its
terms is not superior in right of payment to the Securities.
Section 11.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any
distribution to creditors and/or stockholders 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:
(1) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash of the principal of and interest
(including interest accruing after the commencement of any such
proceeding) to the date of payment on the Senior Indebtedness before
Securityholders shall be entitled to receive any payment of
principal of or interest on Securities; and
(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Securityholders would be entitled but for this
Article shall be made to
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holders of Senior Indebtedness as their interests may appear, except
that Securityholders may receive securities that are subordinated to
Senior Indebtedness to at least the same extent as the Securities.
Section 11.04. DEFAULT ON SENIOR INDEBTEDNESS. Upon the maturity of
any Senior Indebtedness by lapse of time, acceleration or otherwise, all such
Senior Indebtedness shall first be paid in full, or such payment duly provided
for in cash or in a manner satisfactory to the holders of such Senior
Indebtedness, before any payment is made by the Company, the Trustee, the Paying
Agent or any other person acting on behalf of the Company on account of the
principal or interest on the Securities.
The Company may not pay or prepay any principal of, interest on or
other amount respecting the Securities (including (without limitation) any
payment into the sinking fund or any other fund), and may not acquire any
Securities for cash or for any other asset or property (other than Capital Stock
of the Company), or cause, suffer or permit the Trustee, the Paying Agent, any
Subsidiary of the Company or any other person acting on behalf of the Company to
do so, and neither the Trustee, nor any Securityholder nor any person acting on
behalf of any of them may seek to receive or collect any payment or other amount
under this Indenture or any Security, or may exercise or otherwise enforce any
of their respective rights, powers, privileges, remedies and interests under
this Indenture or any Security, if:
(1) a default on Senior Indebtedness occurs and is continuing
that permits holders of such Senior Indebtedness to accelerate its
maturity, and
(2) (i) the default is the subject of judicial proceedings,
(ii) the Company shall have received notice respecting the
continuation of a default under the Senior Indebtedness AND
specifically requesting the imposition of the standstill period
provided by this Section, or (iii) the Company receives a notice of
the acceleration of any of the Senior Indebtedness, which notice is
from a person who may give them pursuant to such Senior
Indebtedness.
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If the Company receives any such notice, a similar notice received
within nine months thereafter relating to the same default on the same issue of
Senior Indebtedness shall not be effective for purposes of this Section.
The Company may resume payments on the Securities and may acquire
them when:
(a) the default is cured or waived,
(b) 150 days pass after the notice is given if the default is
a result of the failure to make any payment due under the
instruments and agreements governing Senior Indebtedness and is not
the subject of judicial proceedings, or
(c) 120 days pass after the notice is given if the default is
for any reason other than as set forth in clause (b) and is not the
subject of judicial proceedings,
if this Article otherwise permits the payment or acquisition at that time.
Section 11.05. ACCELERATION OF SECURITIES. If payment of the
Securities is accelerated because of an Event of Default, the Company shall
promptly notify holders of Senior Indebtedness of the acceleration. The Company
may pay the Securities after such acceleration occurs if this Article permits
the payment at that time.
Section 11.06. WHEN DISTRIBUTION MUST BE PAID OVER. Any payments,
distributions, proceeds, monies and/or other assets and properties paid to or
collected, realized or otherwise received by the Trustee, the Paying Agent, any
Securityholder or any person acting therefor in connection with any payment or
other action by the Company, any Subsidiary or any other person acting on behalf
of the Company, or any exercise or other enforcement under this Indenture or any
Security, during any time when the Company is not permitted to make payments on
the Securities under this Article, any and all such payments, distributions,
proceeds, monies or other assets and properties shall be held by the recipient
in trust for the benefit of, and
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shall be paid forthwith over and delivered to the holders of Senior Indebtedness
(pro rata as to each of such holders on the basis of the respective amounts of
Senior Indebtedness held by them) or their Representative or the trustee under
the indenture or other agreement (if any) pursuant to which Senior Indebtedness
may have been issued, as their respective interests may appear, for application
to the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness.
If a distribution is made to Securityholders that because of this
Article should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
Section 11.07. NOTICE BY COMPANY. The Company shall promptly notify
the Trustee and the Paying Agent of any facts known to the Company that would
cause a payment of principal of or interest on the Securities to violate this
Article, but failure to give such notice shall not affect the subordination of
the Securities to the Senior Indebtedness provided in this Article. Nothing in
this Article shall apply to claims of, or payment to, the Trustee under or
pursuant to Section 7.07.
Section 11.08. SUBROGATION. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to the Securityholders have been applied to the payment of
Senior Indebtedness. A distribution made under this Article to holders of Senior
Indebtedness which otherwise would have been made to Securityholders is not, as
between the Company and Securityholders, a payment by the Company on Senior
Indebtedness.
Section 11.09. RELATIVE RIGHTS. This Article defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
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(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to
pay principal of and interest on the Securities in accordance with
their terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or Event of Default, subject
to the rights of holders of Senior Indebtedness to receive
distribution otherwise payable to Securityholders, except as
otherwise provided herein.
If the Company fails because of this Article to pay principal of or
interest on Security on the due date, the failure is still a Default or Event of
Default.
Section 11.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No
right of any holder of Senior Indebtedness to enforce the subordination of the
indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
Section 11.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to the Representative.
Whenever the Trustee is required or permitted to give any notice of default,
redemption, acceleration, payment and the like to any Securityholder, the
Trustee shall send a copy of each such notice to the holders of Senior
Indebtedness who have given the Trustee a written request for copies thereof
(individually or through their Representative).
Section 11.12. RIGHTS OF THE TRUSTEE AND PAYING AGENT. The Trustee
or Paying Agent may continue to make payments on the Securities until it
receives notice of facts that would cause a payment of principal of or interest
on the Securities to violate this Article. Only the Company, a Representative or
a holder of an issue of Senior Indebtedness that has no Representative may give
the notice.
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The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 11.13. RANKING OF SECURITIES. The indebtedness evidenced by
the Securities shall rank senior to all indebtedness evidenced by securities of
the Company issued by the Company after the date of this Indenture, any other
evidence of Indebtedness of the Company except as expressly provided for in
Section 11.01, and the Capital Stock of the Company, including any rights or
warrants entitling holders thereof to subscribe for or purchase shares of
Capital Stock of the Company or any securities convertible into or exchangeable
for shares of Capital Stock of the Company issued by the Company after the date
of this Indenture.
ARTICLE XII.
SINKING FUND
Section 12.01. SINKING FUND PAYMENTS. As and for a sinking fund for
the retirement of the Securities, the Company will deposit in accordance with
Section 3.05, two equal installments totalling 67% of the aggregate principal
amount of the Issued Securities on June 15, 2002 and June 15, 2003,
respectively, with the balance of the issue being retired at maturity on June
15, 2004. The cash amount of any sinking fund payment is subject to reduction as
provided in Section 12.02. Each sinking fund payment shall be applied to the
redemption of Securities as herein provided. In the event the Company desires to
satisfy a sinking fund payment with Securities pursuant to Section 12.02 but the
aggregate principal amount of such Securities then held by the Company or its
Subsidiaries (the "Treasury Securities") is less than the amount required for
such sinking fund payment, the Company may redeem, at a price equal to the
principal amount of the Securities plus accrued interest to the date fixed for
redemption (notwithstanding the redemption price in paragraph 5 of the
Securities), Securities in a principal amount equal to the difference between
(I) the required principal payment and (II) the principal amount of Treasury
Securities.
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Section 12.02. SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES. The Company (i) may deliver outstanding Securities (other than any
previously called for redemption) and (ii) may apply as a credit Securities (a)
which have been surrendered for conversion by the Holders pursuant to Article X,
(b) which have been redeemed at the election of the Company pursuant to Article
III, or (c) which have been theretofore acquired by the Company otherwise than
by redemption and delivered to the Trustee for cancellation in each case in
satisfaction of all or any part of any sinking fund payment required to be made
pursuant to Section 12.01, provided that such Securities have not been
previously so credited. Each such Security shall be received and credited for
such purpose by the Trustee at the sinking fund redemption price set forth in
Section 12.01 for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly.
Section 12.03. REDEMPTION OF SECURITIES FOR SINKING FUND. On or
before June 15, 2002, June 15, 2003, and June 15, 2004, the Company will deliver
to the Trustee an Officers' Certificate specifying the amount of the next
ensuing sinking fund payment pursuant to Section 12.01, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 12.02 and will also deliver to the Trustee any Securities to be so
delivered. The Trustee shall select the Securities to be redeemed upon the next
ensuing sinking fund payment date in the manner specified in Section 3.02 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company upon not less than twenty (20) days' written notice
mailed to each Holder of Securities at the Holder's registered address. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 3.05 and 3.06.
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ARTICLE XIII.
MISCELLANEOUS
Section 13.01. NOTICES; REPORTING DATE. Any notice or communication
shall be sufficiently given if in writing and delivered in person or mailed by
first-class mail addressed as follows:
if to the Company:
First South Africa Corp., Ltd.
c/o First South Africa Management Corp.
2665 South Bayshore
Suite 702
Coconut Grove, Florida 33133
Attention: Clive Kabatznik
President
if to the Trustee:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: George Karfunkel
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to such Securityholder at the address which appears on the registration
books of the Registrar and shall be sufficiently given to such Securityholder if
so mailed by first class mail within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is
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duly given, whether or not the addressee receives it, except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee. If the
Company mails a notice or communication to Securityholders it shall mail a copy
of such notice to the Trustee and each Agent at the same time. All notices or
communications shall be in writing.
Section 13.02. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate with other Securityholders with respect to their
rights under this Indenture or the Securities.
Section 13.03. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel, stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
Section 13.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the person signing such certificate or
opinion has read such covenant or condition and the definitions relating
thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
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(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 13.05. WHEN TREASURY SECURITIES DISREGARDED. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Affiliate of the Company shall be disregarded, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities which the Trustee knows are
so owned shall be so disregarded. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officer's Certificate listing and identifying
all Securities, if any, known by the Company to be owned by or held for the
account of the Company, or any Affiliate of the Company and the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are outstanding for the purposes of any such determination.
Section 13.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make
reasonable rules for action by, or at a meeting of, Securityholders. The
Registrar or Paying Agent may make reasonable rules for its functions.
Section 13.07. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
city in which the Trustee administers its corporate trust business. If a payment
date is a Legal Holiday at a place of payment, payment may be made at the place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
Section 13.08. GOVERNING LAW. The laws of the State of New York
shall govern this Indenture and the Securities without regard to principles of
conflicts of law.
Section 13.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or a Subsidiary. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
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Section 13.10. NO RECOURSE AGAINST OTHERS. Liabilities of directors,
officers, employees and stockholders, as such, of the Company are waived and
released as provided in paragraph 19 of the Securities.
Section 13.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
Section 13.12. DUPLICATE ORIGINALS. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
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Section 13.13. SEPARABILITY. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim therefor against
any party hereto.
FIRST SOUTH AFRICA CORP., LTD.
By:__________________________________
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By:__________________________________
Name:
Title:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT IS IN EFFECT WITH REGARD THERETO OR (II) THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.
No.________ $_____________
FIRST SOUTH AFRICA CORP., LTD.
9% SENIOR SUBORDINATED CONVERTIBLE DEBENTURES
DUE JUNE 15, 2004
promises to pay to
or registered assigns the principal sum of______________________________________
Dollars on June 15, 2004
The provisions set forth on Annex A hereto are incor porated as if set forth on
the face hereof.
Interest Payment Dates:
June 15, September 15,
December 15, March 15.
Record Dates:
June 1, September 1,
December 1, March 1.
DATED:
Certificate of Authentication
This Security is one of the
Securities described in the
within mentioned Indenture.
AMERICAN STOCK TRANSFER AND FIRST SOUTH AFRICA CORP., LTD.
TRUST COMPANY, as Trustee
By:_____________________ By:_____________________
Authorized Signature
By:_____________________
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ANNEX A
FIRST SOUTH AFRICA CORP., LTD.
9% SENIOR SUBORDINATED CONVERTIBLE DEBENTURES
DUE JUNE 15, 2004
1. INTEREST. First South Africa, Corp., Ltd., a Bermuda corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest quarterly
commencing June 15, 1997. Securities issued by the Company after April 17, 1997,
the initial closing date (the "Initial Closing Date") will bear interest from
the respective subsequent closing date, but in all other respects will be on the
same terms and conditions as the other Securities issued pursuant to the
Indenture. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Security
(except defaulted interest) to the persons who are registered holders of
Securities at the close of business on the record date for the next interest
payment date even though Securities are canceled after the record date and on or
before the interest payment date. 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 will pay interest by its check
payable in such money mailed to the holder's registered address.
3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT. Initially, American Stock
Transfer & Trust Company (the "Trustee") will act as Paying Agent, Registrar and
Conversion Agent. The Company may change any Paying Agent, Registrar or
Conversion Agent without notice to any Securityholder. The Company or any of its
subsidiaries may act in such capacity.
4. INDENTURE. The Company issued the Securities under an Indenture dated
as of April 25, 1997, (the "Indenture") between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture. The Securities
are subject to all such terms, and Securityholders are referred to the Indenture
for
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a statement of them. The Securities are limited to the aggregate principal
amount of $10,000,000.
5. REDEMPTION. The Securities may be redeemed by the Company at any time
or from time to time commencing June 15, 1999, at the Company's option, in whole
or in part, upon not less than 30 nor more than 60 days' notice, mailed to the
registered holders thereof at their last registered addresses, at the redemption
prices (expressed as percentages of the principal amount) set forth below, plus
accrued and unpaid interest to the redemption date (and subject to the right of
any record holder to receive the interest payable on the applicable Interest
Payment Date that is on or prior to the redemption date). If redeemed during the
periods indicated below, the applicable redemption percentage would be:
FROM THROUGH PERCENTAGE
---- ------- ----------
June 15, 1999 June 14, 2000.... 109.0%
June 15, 2000 June 14, 2001... 107.0%
June 15, 2001 June 14, 2002... 105.0%
June 15, 2002 June 14, 2003... 102.5%
June 15, 2003 June 15, 2004... 100.0%
The Company may not redeem the Securities prior to June 15, 1998. The
Company may redeem the Securities after June 15, 1998 but prior to June 15, 1999
if the market price of the Common Stock on any 20 trading days during a period
of 30 consecutive trading days shall have equaled or exceeded 150% of the then
Conversion Price of the Securities. The applicable redemption percentage would
be 109%.
6. SELECTION AND NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least thirty (30) but not more than sixty (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 may be redeemed in part but only
in whole multiples of $1,000. On and after the redemption date, interest ceases
to accrue on Securities or portions thereof called for redemption.
7. CONVERSION. A holder of a Security may convert it into Common Stock of
the Company at any time, subject to prior
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redemption and compliance with the terms of the Indenture. If the Security is
called for redemption, the holder may convert it at any time before the close of
business on the fifth business day prior to the redemption date. The initial
conversion price shall be equal to $6.00 per share of Common Stock, subject to
adjustment in certain events. 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 the result to the
nearest 1/100th of a Share. On conversion, no payment or adjustment for interest
will be made. 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 a Conversion
Agent, (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. A holder may convert a portion of a Security if the portion is $1,000
or an integral multiple of $1,000.
The conversion price is subject to adjustment as set forth in the
Indenture upon the occurrence of certain events, including: (i) the issuance of
stock of the Company as a dividend or distribution on any shares of the Common
Stock; (ii) subdivisions, combinations and certain reclassifications of the
Common Stock; (iii) the issuance to all holders of Common Stock of certain
rights or warrants entitling them to subscribe for or purchase Common Stock at
less than the then current conversion price (as determined in the manner set
forth in the Indenture); (iv) the distribution to all holders of Common Stock of
any shares of capital stock of the Company (other than the Common Stock),
evidences of indebtedness of the Company or other assets (including securities,
but excluding any rights or warrants referred to above, excluding any dividend
or distribution paid in cash out of earned surplus of the Company); (v) the
distribution to all holders of Common Stock of cash in the aggregate amount of
such cash distribution; (vi) the issuance of shares of Common Stock for less
consideration than the then current conversion price; and (vii) the issuance of
securities convertible into or exchangeable for shares of Common Stock (other
than pursuant to transactions described above and with certain exceptions) for a
consideration per share of Common Stock deliverable on such
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conversion or exchange that is less than the then current conversion price of
the Common Stock on the date of issuance of such security.
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the price then in effect;
but any adjustment that would otherwise be required to be made shall be carried
forward and taken into account in any subsequent adjustment.
The Company from time to time may voluntarily reduce the conversion price
for a period of time, provided that the conversion price is not less than the
par value of a share of Common Stock.
If the Company consolidates or merges into or sells, leases, transfers or
otherwise disposes of all or substantially all of its assets, the Securities
will become convertible into the kind and amount of Securities, cash or other
assets which the holders of the Securities would have owned immediately after
the transaction if the holders had converted the Securities immediately before
the effective date of the transaction at the conversion price in effect
immediately prior to such effective date.
8. SINKING FUND. The Securities will be redeemable through the operation
of a mandatory sinking fund in two equal installments totaling 67% of the issue
on June 15, 2002 and June 15, 2003, with the balance of the issue being retired
at maturity on June 15, 2004. Sinking fund redemptions shall be made upon not
less than 30 days' notice mailed to each holder of the Securities to be redeemed
at the holder's registered address, at a sinking fund redemption price equal to
the then redemption price plus accrued and unpaid interest to the date fixed for
redemption (subject to the right of holders of record on the relevant record
date to receive interest due on an Interest Payment Date that is prior to the
date fixed for redemption). Prior to June 15 of each of the years 2002 and 2003,
the Company will pay to the Trustee, for a sinking fund payment, cash sufficient
to redeem on such date fixed for redemption, 33.5% of the aggregate principal
amount of the issued Securities, provided that Securities converted pursuant to
the Indenture or reacquired or redeemed by the Company (other than Securities
redeemed
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through the sinking fund) may be used, at the principal amount thereof, to
reduce the amount of any sinking fund payment. Cash payments for the sinking
fund are to be applied to redeem Securities.
9. SUBORDINATION. The Securities are subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness (as defined in
the Indenture). To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect. The indebtedness evidenced by the
Securities shall rank senior to all indebtedness evidenced by securities of the
Company issued by the Company after the date of the Indenture, any other
evidence of Indebtedness of the Company except as expressly provided for in the
Indenture, and the Capital Stock of the Company, including any rights or
warrants entitling holders thereof to subscribe for or purchase shares of
Capital Stock of the Company or any securities convertible into or exchangeable
for shares of Capital Stock of the Company issued by the Company after the date
of the Indenture.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. A holder may transfer 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 transfer
or exchange any Security or portion of a Security selected for redemption, or
transfer or exchange any Security for a period of 15 days before a selection of
Securities to be redeemed.
11. PERSONS DEEMED OWNERS. The registered holder of a Security may be
treated as the owner of it for all purposes.
12. UNCLAIMED MONEY. If money for the payment of principal, premium, if
any, or interest on the Securities remains unclaimed for two years, the Trustee
or Paying Agent will pay the money back to the Company at its request. After
that, holders entitled to any of such money must look to the Company for
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payment as general creditors unless an "abandoned property" law designates
another person.
13. AMENDMENT, SUPPLEMENT, WAIVER. Subject to certain exceptions, the
Indenture or the Securities may be amended or supplemented with the consent of
the holders of at least a majority in principal amount of the outstanding
Securities and any past default or compliance with any provision may be waived
with the consent of the holders of a majority in principal amount of the
outstanding Securities. Without the consent of any Securityholder, the Company
may amend or supplement the Indenture or the Securities to, among other things,
cure any ambiguity, omission, defect or inconsistency or to provide for
uncertificated Securities in addition to certificated Securities or to make any
change that does not adversely affect the rights of any Securityholder.
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<PAGE>
14. SUCCESSOR CORPORATION. When a successor corporation assumes all the
obligations of its predecessor under the Securities and the Indenture and if
immediately thereafter no Default or Event of Default exists, the predecessor
corporation will be released from those obligations.
15. DEFAULTS AND REMEDIES. An Event of Default is:
(i) failure of the Company to pay interest on any Security for
10 days, (ii) failure of the Company to pay any principal
installment when due and payable for a period of 10 days, (iii)
default in the deposit of any sinking fund payment when and as due
which continues for a period of ten days, (iv) failure by the
Company for 30 days after written notice to the Company by the
Trustee or to the Company and the Trustee by the holders of 25% in
principal amount of the outstanding Securities, to comply with any
of its other agreements and covenants in the Indenture and the
Securities; (v) certain defaults under and accelerations prior to
maturity of other indebtedness; (vi) certain events of bankruptcy,
insolvency or reorganization, and (vii) suspension or termination of
the Company's reporting obligations pursuant to Sections 13 and
15(d) of the Securities Exchange Act of 1934, as amended.
The Indenture provides that the Trustee will, within 30 days after the
occurrence of a Default, give the Securityholders notice of all uncured Defaults
known to it (the term "Default" to include the events specified above, without
grace or notice), provided that, except in the case of default in the payment of
principal of or interest on any of the Securities, or failure to make a required
sinking fund deposit or a redemption payment pursuant to Article III of the
Indenture, the Trustee shall be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interest of
the Securityholders.
In case an Event of Default occurs and is continuing, the Trustee or the
holders of not less than 25% in aggregate principal amount of the Securities
then outstanding, by notice in writing to the Company (and to the Trustee if
given by the
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Securityholders), may declare to be due and payable the principal amount of the
Securities then outstanding plus accrued interest to the date of acceleration,
and upon any such declaration the same shall become and shall be immediately due
and payable. Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Such declaration may be rescinded by holders of a majority in principal
amount of outstanding Securities if all existing Events of Default have been
cured and waived (except nonpayment of principal or interest on Securities then
outstanding that has become due solely because of the acceleration) and if the
rescission would not conflict with any judgment or decree.
Defaults (except, unless theretofore cured, a default in payment of
principal of or interest on the Securities or a default with respect to a
provision which cannot be modified under the terms of the Indenture without the
consent of each Security affected) may be waived by the holders of a majority in
principal amount of outstanding Securities upon the conditions provided in the
Indenture.
Upon the occurrence of an Event of Default, the holders of a majority in
principal amount of the outstanding Securities may select a person to serve as
director of the Company until the Event of Default is cured.
The Indenture requires the Company to file periodic reports with the
Trustee as to the absence of defaults.
16. DISCHARGE OF INDENTURE. The Indenture will be discharged and canceled,
except for certain Sections thereof, subject to the terms of the Indenture, upon
the payment of all the Securities or upon the irrevocable deposit with the
Trustee or Paying Agent of money sufficient for such payment or redemption.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the
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Company or its affiliates, and may otherwise deal with the Company or its
affiliates, as if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
19. AUTHENTICATION. This Security shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
20. 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), J TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= custodian), and U/G/MA (= Uniform Gifts
to Minors Act).
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture. Requests may be made to: President,
First South Africa Corp., Ltd., c/o First South Africa Management Corp., 2665
South Bayshore, Suite 702, Coconut Grove, Florida 33133.
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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 I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
- --------------------------------------------------------------------------------
agent to transfer this Security on the books of Travel Ports of America, Inc.
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:*____________________________________________
- --------
* Needed only if the stock certificate is to be registered
in a name other than that of the record holder.
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CONVERSION NOTICE
To convert this Security into Common Stock of First South Africa Corp.,
Ltd., check the line below:
------
To convert only part of this Security, state the principal amount to be
converted:
$__________________
If you want the stock certificate made out in another person's name, fill in the
form below:
(Insert other person's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(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).
Signature Guarantee:*____________________________________________
- --------
* Needed only if the stock certificate is to be
registered in a name other than that of the record
holder.
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SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, OFFERED, OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A "U.S. PERSON" UNLESS THE
SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE. IN NO EVENT MAY
SUCH SECURITIES BE SOLD, OFFERED OR TRANSFERRED IN THE UNITED STATES OR TO A "U.
S. PERSON" FOR A PERIOD OF FORTY (40) DAYS FROM THE DATE OF THIS CERTIFICATE.
No._________ $_____________________
FIRST SOUTH AFRICA CORP., LTD.
9% SENIOR SUBORDINATED CONVERTIBLE DEBENTURES
DUE JUNE 15, 2004
promises to pay to EP Opportunity Fund
or registered assigns the principal sum of Seven Hundred Thousand Dollars on
June 15, 2004
The provisions set forth on Annex A
hereto are incorporated as if set
forth on the face hereof.
Interest Payment Dates:
June 15, September 15,
December 15, March 15.
Record Dates:
June 1, September 1,
December 1, March 1.
DATED:
Certificate of Authentication
This Security is one of the Securities
described in the within mentioned Indenture.
AMERICAN STOCK TRANSFER AND FIRST SOUTH AFRICA CORP., LTD.
TRUST COMPANY, as Trustee
By:___________________________ By:___________________________
Authorized Signature
By:___________________________
<PAGE>
ANNEX A
FIRST SOUTH AFRICA CORP., LTD.
9% SENIOR SUBORDINATED CONVERTIBLE DEBENTURES
DUE JUNE 15, 2004
1. INTEREST. First South Africa, Corp., Ltd., a Bermuda corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest quarterly
commencing June 15, 1997. Securities issued by the Company after April 17, 1997,
the initial closing date (the "Initial Closing Date") will bear interest from
the respective subsequent closing date, but in all other respects will be on the
same terms and conditions as the other Securities issued pursuant to the
Indenture. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Security
(except defaulted interest) to the persons who are registered holders of
Securities at the close of business on the record date for the next interest
payment date even though Securities are canceled after the record date and on or
before the interest payment date. 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 will pay interest by its check
payable in such money mailed to the holder's registered address.
3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT. Initially, American
Stock Transfer & Trust Company (the "Trustee") will act as Paying Agent,
Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar or Conversion Agent without notice to any Securityholder. The Company
or any of its subsidiaries may act in such capacity.
4. INDENTURE. The Company issued the Securities under an Indenture dated
as of April 25, 1997, (the "Indenture") between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture. The Securities
are subject to all such terms, and Securityholders are referred to the Indenture
for a statement of them. The Securities are limited to the aggregate principal
amount of $10,000,000.
5. REDEMPTION. The Securities may be redeemed by the Company at any time
or from time to time commencing June 15, 1999, at the Company's option, in whole
or in part, upon not less than 30 nor more than 60 days' notice, mailed to the
registered holders thereof at their last registered addresses, at the
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<PAGE>
redemption prices (expressed as percentages of the principal amount) set forth
below, plus accrued and unpaid interest to the redemption date (and subject to
the right of any record holder to receive the interest payable on the applicable
Interest Payment Date that is on or prior to the redemption date). If redeemed
during the periods indicated below, the applicable redemption percentage would
be:
FROM THROUGH PERCENTAGE
---- ------- ----------
June 15, 1999 June 14, 2000.... 109.0%
June 15, 2000 June 14, 2001... 107.0%
June 15, 2001 June 14, 2002... 105.0%
June 15, 2002 June 14, 2003... 102.5%
June 15, 2003 June 15, 2004... 100.0%
The Company may not redeem the Securities prior to June 15, 1998. The
Company may redeem the Securities after June 15, 1998 but prior to June 15, 1999
if the market price of the Common Stock on any 20 trading days during a period
of 30 consecutive trading days shall have equaled or exceeded 150% of the then
Conversion Price of the Securities. The applicable redemption percentage would
be 109%.
6. SELECTION AND NOTICE OF REDEMPTION. Notice of redemption will be
mailed at least thirty (30) but not more than sixty (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 may be redeemed in part
but only in whole multiples of $1,000. On and after the redemption date,
interest ceases to accrue on Securities or portions thereof called for
redemption.
7. CONVERSION. A holder of a Security may convert it into Common Stock
of the Company at any time, subject to prior redemption and compliance with the
terms of the Indenture. If the Security is called for redemption, the holder may
convert it at any time before the close of business on the fifth business day
prior to the redemption date. The initial conversion price shall be equal to
$6.00 per share of Common Stock, subject to adjustment in certain events. 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 the result to the nearest 1/100th of a Share. On
conversion, no payment or adjustment for interest will be made. 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 a Conversion
Agent, (3) furnish appropriate
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<PAGE>
endorsements and transfer documents if required by the Registrar or Conversion
Agent, and (4) pay any transfer or similar tax if required. A holder may convert
a portion of a Security if the portion is $1,000 or an integral multiple of
$1,000.
The conversion price is subject to adjustment as set forth in the
Indenture upon the occurrence of certain events, including: (i) the issuance of
stock of the Company as a dividend or distribution on any shares of the Common
Stock; (ii) subdivisions, combinations and certain reclassifications of the
Common Stock; (iii) the issuance to all holders of Common Stock of certain
rights or warrants entitling them to subscribe for or purchase Common Stock at
less than the then current conversion price (as determined in the manner set
forth in the Indenture); (iv) the distribution to all holders of Common Stock of
any shares of capital stock of the Company (other than the Common Stock),
evidences of indebtedness of the Company or other assets (including securities,
but excluding any rights or warrants referred to above, excluding any dividend
or distribution paid in cash out of earned surplus of the Company); (v) the
distribution to all holders of Common Stock of cash in the aggregate amount of
such cash distribution; (vi) the issuance of shares of Common Stock for less
consideration than the then current conversion price; and (vii) the issuance of
securities convertible into or exchangeable for shares of Common Stock (other
than pursuant to transactions described above and with certain exceptions) for a
consideration per share of Common Stock deliverable on such conversion or
exchange that is less than the then current conversion price of the Common Stock
on the date of issuance of such security.
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the price then in effect;
but any adjustment that would otherwise be required to be made shall be carried
forward and taken into account in any subsequent adjustment.
The Company from time to time may voluntarily reduce the conversion
price for a period of time, provided that the conversion price is not less than
the par value of a share of Common Stock.
If the Company consolidates or merges into or sells, leases, transfers
or otherwise disposes of all or substantially all of its assets, the Securities
will become convertible into the kind and amount of Securities, cash or other
assets which the holders of the Securities would have owned immediately after
the transaction if the holders had converted the Securities immediately before
the effective date of the transaction at the conversion price in effect
immediately prior to such effective date.
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<PAGE>
8. SINKING FUND. The Securities will be redeemable through the operation
of a mandatory sinking fund in two equal installments totaling 67% of the issue
on June 15, 2002 and June 15, 2003, with the balance of the issue being retired
at maturity on June 15, 2004. Sinking fund redemptions shall be made upon not
less than 30 days' notice mailed to each holder of the Securities to be redeemed
at the holder's registered address, at a sinking fund redemption price equal to
the then redemption price plus accrued and unpaid interest to the date fixed for
redemption (subject to the right of holders of record on the relevant record
date to receive interest due on an Interest Payment Date that is prior to the
date fixed for redemption). Prior to June 15 of each of the years 2002 and 2003,
the Company will pay to the Trustee, for a sinking fund payment, cash sufficient
to redeem on such date fixed for redemption, 33.5% of the aggregate principal
amount of the issued Securities, provided that Securities converted pursuant to
the Indenture or reacquired or redeemed by the Company (other than Securities
redeemed through the sinking fund) may be used, at the principal amount thereof,
to reduce the amount of any sinking fund payment. Cash payments for the sinking
fund are to be applied to redeem Securities.
9. SUBORDINATION. The Securities are subordinated and subject in right
of payment to the prior payment in full of all Senior Indebtedness (as defined
in the Indenture). To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect. The indebtedness evidenced by the
Securities shall rank senior to all indebtedness evidenced by securities of the
Company issued by the Company after the date of the Indenture, any other
evidence of Indebtedness of the Company except as expressly provided for in the
Indenture, and the Capital Stock of the Company, including any rights or
warrants entitling holders thereof to subscribe for or purchase shares of
Capital Stock of the Company or any securities convertible into or exchangeable
for shares of Capital Stock of the Company issued by the Company after the date
of the Indenture.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. A holder may transfer 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 transfer
or exchange any Security or portion of a Security selected for redemption, or
transfer or exchange any
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<PAGE>
Security for a period of 15 days before a selection of Securities to be
redeemed.
11. PERSONS DEEMED OWNERS. The registered holder of a Security may be
treated as the owner of it for all purposes.
12. UNCLAIMED MONEY. If money for the payment of principal, premium, if
any, or interest on the Securities remains unclaimed for two years, the Trustee
or Paying Agent will pay the money back to the Company at its request. After
that, holders entitled to any of such money must look to the Company for payment
as general creditors unless an "abandoned property" law designates another
person.
13. AMENDMENT, SUPPLEMENT, WAIVER. Subject to certain exceptions, the
Indenture or the Securities may be amended or supplemented with the consent of
the holders of at least a majority in principal amount of the outstanding
Securities and any past default or compliance with any provision may be waived
with the consent of the holders of a majority in principal amount of the
outstanding Securities. Without the consent of any Securityholder, the Company
may amend or supplement the Indenture or the Securities to, among other things,
cure any ambiguity, omission, defect or inconsistency or to provide for
uncertificated Securities in addition to certificated Securities or to make any
change that does not adversely affect the rights of any Securityholder.
14. SUCCESSOR CORPORATION. When a successor corporation assumes all the
obligations of its predecessor under the Securities and the Indenture and if
immediately thereafter no Default or Event of Default exists, the predecessor
corporation will be released from those obligations.
15. DEFAULTS AND REMEDIES. An Event of Default is:
(i) failure of the Company to pay interest on any
Security for 10 days, (ii) failure of the Company to pay any
principal installment when due and payable for a period of 10
days, (iii) default in the deposit of any sinking fund payment
when and as due which continues for a period of ten days, (iv)
failure by the Company for 30 days after written notice to the
Company by the Trustee or to the Company and the Trustee by the
holders of 25% in principal amount of the outstanding
Securities, to comply with any of its other agreements and
covenants in the Indenture and the Securities; (v) certain
defaults under and accelerations prior to maturity of other
indebtedness; (vi) certain events of bankruptcy, insolvency or
reorganization, and (vii) suspension or termination of
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<PAGE>
the Company's reporting obligations pursuant to Sections 13 and
15(d) of the Securities Exchange Act of 1934, as amended.
The Indenture provides that the Trustee will, within 30 days after the
occurrence of a Default, give the Securityholders notice of all uncured Defaults
known to it (the term "Default" to include the events specified above, without
grace or notice), provided that, except in the case of default in the payment of
principal of or interest on any of the Securities, or failure to make a required
sinking fund deposit or a redemption payment pursuant to Article III of the
Indenture, the Trustee shall be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interest of
the Securityholders.
In case an Event of Default occurs and is continuing, the Trustee or the
holders of not less than 25% in aggregate principal amount of the Securities
then outstanding, by notice in writing to the Company (and to the Trustee if
given by the Securityholders), may declare to be due and payable the principal
amount of the Securities then outstanding plus accrued interest to the date of
acceleration, and upon any such declaration the same shall become and shall be
immediately due and payable. Securityholders may not enforce the Indenture or
the Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Such declaration may be rescinded by holders of a majority in principal
amount of outstanding Securities if all existing Events of Default have been
cured and waived (except nonpayment of principal or interest on Securities then
outstanding that has become due solely because of the acceleration) and if the
rescission would not conflict with any judgment or decree.
Defaults (except, unless theretofore cured, a default in payment of
principal of or interest on the Securities or a default with respect to a
provision which cannot be modified under the terms of the Indenture without the
consent of each Security affected) may be waived by the holders of a majority in
principal amount of outstanding Securities upon the conditions provided in the
Indenture.
Upon the occurrence of an Event of Default, the holders of a majority in
principal amount of the outstanding Securities may select a person to serve as
director of the Company until the Event of Default is cured.
The Indenture requires the Company to file periodic reports with the
Trustee as to the absence of defaults.
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<PAGE>
16. DISCHARGE OF INDENTURE. The Indenture will be discharged and
canceled, except for certain Sections thereof, subject to the terms of the
Indenture, upon the payment of all the Securities or upon the irrevocable
deposit with the Trustee or Paying Agent of money sufficient for such payment or
redemption.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its affiliates, and may otherwise deal
with the Company or its affiliates, as if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
19. AUTHENTICATION. This Security shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
20. 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), J TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= custodian), and U/G/MA (= Uniform Gifts
to Minors Act).
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture. Requests may be made to: President,
First South Africa Corp., Ltd., c/o First South Africa Management Corp., 2665
South Bayshore, Suite 702, Coconut Grove, Florida 33133.
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<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 I.D. number)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Security on the books of Travel Ports of America, Inc.
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:*____________________________________________
- --------
* Needed only if the stock certificate is to be
registered in a name other than that of the record
holder.
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<PAGE>
CONVERSION NOTICE
To convert this Security into Common Stock of First South Africa Corp.,
Ltd., check the line below:
______
To convert only part of this Security, state the principal amount to be
converted:
$__________________
If you want the stock certificate made out in another person's name, fill in the
form below:
(Insert other person's soc. sec. or tax I.D. no.)
(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).
Signature Guarantee:*____________________________________________
- --------
* Needed only if the stock certificate is to be
registered in a name other than that of the record
holder.
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR IF IN THE OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON AUGUST 1, 2007 OR IF NOT A BUSINESS DAY,
AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT FOLLOWING BUSINESS
DAY.
WARRANT TO PURCHASE
135,000 Shares of Common
Stock
WARRANT TO PURCHASE
COMMON STOCK
OF
FIRST SOUTH AFRICA CORP., LTD.
This certifies that, for good and valuable consideration, VALUE
INVESTING PARTNERS, INC., a Delaware corporation, having an address at 1853 Post
Road East, Westport, Connecticut 06880, and its registered, permitted assigns
(collectively, the "Warrantholder"), is entitled to purchase from FIRST SOUTH
AFRICA CORP., LTD., a Bermuda corporation (the "Company"), subject to the terms
and conditions hereof, at any time before 5:00 P.M., New York time, on August 1,
2007, (or, if such day is not a Business Day, as defined herein, at or before
5:00 P.M., New York time on the next following Business Day), the number of
fully paid and non-assessable shares of Common Stock, $.01 par value per share,
of the Company (the "Common Stock") stated above at the Exercise Price (as
defined herein). The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Article III hereof.
ARTICLE I
SECTION 1.01: DEFINITION OF TERMS. As used in this Warrant, the
following capitalized terms shall have the following respective meanings:
(a) BUSINESS DAY: A day other than a Saturday, Sunday or other
day on which banks in the State of New York are authorized by law to remain
closed.
(b) COMMON STOCK: Common Stock, $.01 par value per share, of the
Company.
<PAGE>
(c) COMMON STOCK EQUIVALENTS: Securities that are convertible
into or exercisable for shares of Common Stock.
(d) DEMAND REGISTRATION: See Section 7.02.
(e) EXCHANGE ACT: Securities Exchange Act of 1934, as amended.
(f) EXERCISE PRICE: $6.00 per share, subject to adjustment.
(g) EXPIRATION DATE: 5:00 P.M., New York time, on August 1,
2007.
(h) HOLDER: A Holder of Registrable Securities.
(i) NASD: National Association of Securities Dealers, Inc.
(j) PERSON: An individual, partnership, joint corporation,
trust, unincorporated organization or government or any department of agency
thereof.
(k) PIGGYBACK REGISTRATION: See Section 7.01.
(l) PROSPECTUS: Any prospectus included in a Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and supplements
to the Prospectus, including post-effective amendments and all material
incorporated by reference in such Prospectus.
(m) PUBLIC OFFERING: A public offering of any of the Company's
equity or debt securities pursuant to a registration statement under the
Securities Act.
(n) REGISTRATION EXPENSES: Any and all expenses incident to the
performance of or compliance with Article VII, including, without limitation,
(i) all SEC, stock exchange, NASD and Nasdaq registration and filing fees; (ii)
all fees and expenses of complying with securities or blue sky laws (including
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities); (iii) all printing,
mailing, messenger and delivery expenses; (iv) the fees and disbursements of
counsel for the Company and of its independent certified public accountants,
including the expenses of any special audits and/or "cold comfort" letters
required by or incident to such performance and compliance; and (v) any
disbursements of underwriters customarily paid by issuers or sellers of
securities including liability insurance if the Company so desires, and the
reasonable fees and expenses of any
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<PAGE>
special experts retained in connection with the requested registration, but
excluding underwriting fees, discounts and commissions and transfer taxes if
any.
(o) REGISTRABLE SECURITIES: Any Warrant Shares and/or other
securities that may be or are issued by the Company upon exercise of this
Warrant (and upon exercise of other Warrants as defined below), including those
which may thereafter be issued by the Company in respect of any such securities
by means of any stock splits, stock dividends, recapitalization or the like, and
as adjusted pursuant to Article III hereof; PROVIDED, HOWEVER, that as to any
particular security contained in Registrable Securities, such securities shall
cease to be Registrable Securities when (i) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement; or (ii) they shall have been sold pursuant to
Rule 144 (or any successor provision) under the Securities Act.
(p) REGISTRATION STATEMENT: Any registration statement of the
Company filed or to be filed with the SEC which covers any of the Registrable
Securities pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by
reference by such registration statement.
(q) SEC: The Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act or the Exchange Act.
(r) SECURITIES ACT: Securities Act of 1933, as amended.
(s) WARRANTS: This Warrant and all other warrants that have been
or may be issued to Value Investing Partners, Inc., or its assignees or
transferees, as additional compensation as placement agent for a 1997 private
placement of the Company's 9% Senior Subordinated Convertible Debentures, in its
or their place.
(t) WARRANTHOLDER: The person(s) or entity(ies) to whom this
Warrant is originally issued, or any successor in interest thereto, or any
assignee or transferee thereof, in whose name this Warrant is registered upon
the books to be maintained by the Company for that purpose.
(u) WARRANT SHARES: Common Stock purchasable upon exercise of
the Warrants.
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<PAGE>
ARTICLE II
DURATION AND EXERCISE OF WARRANT
SECTION 2.01: DURATION OF WARRANT. Subject to the terms contained
herein, this Warrant may be exercised at any time before 5:00 P.M., New York
time, on the Expiration Date (or, if such day is not a Business Day, at or
before 5:00 P.M., New York time, on the next following Business Day). If this
Warrant is not exercised at or before 5:00 P.M., New York time, on the
Expiration Date, it shall become void, and all rights hereunder shall thereupon
cease.
SECTION 2.02: EXERCISE OF WARRANT.
(a) The Warrantholder may exercise this Warrant, in whole or in
part, upon surrender of this Warrant with the Subscription Form hereon duly
executed, to the Company at its principal executive office, or to such other
office as the Company has given due notice thereof to the Warrantholder,
together with the full Exercise Price for each Warrant Share to be purchased by
wire transfer, certified check or bank draft payable in United States Dollars to
the order of the Company or by delivering to the Company the number of shares of
the Company's Common Stock having a value on the date of exercise equal to such
Exercise Price. In lieu of a monetary payment or delivery of shares for the
applicable Exercise Price, a Warrantholder may elect to receive, without the
payment of any additional consideration, shares equal to the value of its
Warrant Shares or portion thereof by the surrender of such Warrant to the
Company with the net issuance election marked in the Exercise Form. Thereupon,
the Company shall issue to the Holder, such number of fully paid and
nonassessable shares of Common Stock as is computed using the following formula:
X = Y(A-B)
------
A
where X = the number of shares to be issued to the Warrantholder pursuant to
this Section 2.02.
Y = the number of Warrant Shares in respect of which the net
issuance election is made pursuant to this Section 2.02.
A = the closing price of one share of Common Stock for the
last trading day immediately preceding the date of the
notice of election is given pursuant to this Section 2.02,
which closing price shall be the last sale price regular
way or if no reported last sale price regular way for
such, the last high bid price, in either case on the
principals national
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<PAGE>
securities or stock quotation system on which the Common
Stock is listed.
B = the applicable Exercise Price in effect at the time the
net issuance election is made pursuant to this Section
2.02.
(b) Within seven (7) Business Days after receipt of this Warrant
with the Exercise Form duly executed and accompanied by payment of the aggregate
Exercise Price for the Warrant Shares for which this Warrant is then being
exercised, the Company shall cause to be issued and delivered to the
Warrantholder (or its designee) certificates for the total number of whole
shares of Common Stock for which this Warrant is being exercised (adjusted to
reflect the effect of the anti-dilution provisions contained in Article III
hereof, if any, and as provided in Section 4.04 hereof) in such denominations in
multiples as are requested by the Warrantholder. If at the time this Warrant is
exercised, a Registration Statement is not in effect to register under the
Securities Act the Warrant Shares issuable upon exercise of this Warrant, the
Company may require the Warrantholder to make such investment intent
representations, and may place such legends on certificates representing the
Warrant Shares, as may be reasonably required in the opinion of counsel to the
Company to permit the Warrant Shares to be issued without such registration.
(c) In case the Warrantholder shall exercise this Warrant with
respect to less than all of the Warrant Shares that may be purchased under this
Warrant, the Company will execute a warrant in the form and on the terms of this
Warrant for the balance of such Warrant Shares and deliver such new warrant to
the Warrantholder.
(d) The Company covenants and agrees that it will pay when due
and payable any and all stock transfer and similar taxes which may be payable in
respect of the issue of this Warrant or in respect of the issue of any Warrant
Shares. The Company shall not, however, be required to pay any tax imposed on
income or gross receipts or any tax which may be payable in respect of any
transfer involved in the issuance or delivery of this Warrant or at the time of
surrender.
ARTICLE III
ADJUSTMENT OF SHARES OF COMMON STOCK
PURCHASABLE AND OF EXERCISE PRICE
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article III.
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<PAGE>
SECTION 3.01: MECHANICAL ADJUSTMENTS.
(a) If at any time prior to the full exercise of this Warrant,
the Company shall (i) pay a dividend or make a distribution on its shares of
Common Stock in shares of Common Stock (other than cash dividends or
distributions out of surplus or earnings); (ii) subdivide, reclassify or
recapitalize its outstanding Common Stock into a greater number of shares; or
(iii) combine, reclassify or recapitalize its outstanding Common Stock into a
smaller number of shares, the Exercise Price in effect at the time of the record
date of such subdivision, combination, reclassification or recapitalization
shall be proportionately adjusted so that the Warrantholder shall be entitled to
receive the aggregate number and kind of shares which, if this Warrant had been
exercised in full immediately prior to such time, he would have owned upon such
exercise and been entitled to receive upon such dividend, subdivision,
combination, reclassification or recapitalization. Such adjustment shall be made
successively whenever any event listed in this paragraph 3.01(a) shall occur.
(b) If the Company shall hereafter issue rights, options or
warrants (the "Rights") to all holders of its outstanding Common Stock, without
charge to such holders, entitling them to subscribe for or purchase shares of
Common Stock (or Common Stock Equivalents) at a price (or having a conversion
price per share) (such price being the "Rights Price") less than the Exercise
Price on the record date described below, the Exercise Price shall be adjusted
so that the Exercise Price shall equal the price determined by multiplying the
Exercise Price in effect immediately prior to the date of such sale or issuance
(which date in the event of distribution to shareholders shall be deemed to be
the record date set by the Company to determine shareholders entitled to
participate in such distribution) by a fraction, the numerator of which shall be
(i) the number of shares of Common Stock outstanding on the date of such sale or
issuance, plus (ii) the number of additional shares of Common Stock which the
aggregate consideration received by the Company upon such issuance or sale (plus
the aggregate of any additional amount to be received by the Company upon the
exercise of such Rights) would purchase at such current Exercise Price; and the
denominator of which shall be (i) the number of shares of Common Stock
outstanding on the date of such issuance or sale, plus (ii) the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the Common Stock Equivalents so offered are convertible). Such adjustments
shall be made successively whenever such Rights are issued; provided that if
Rights Price is greater than $4.00 per share (or as adjusted pursuant to
paragraph 3.01(a) hereof) the adjustment shall be made upon exercise of such
Rights. To the extent that shares of Common Stock are not delivered (or Common
Stock Equivalents are not delivered) after the expiration of such Rights which
caused an adjustment at the time of issuance thereof,
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the Exercise Price shall be readjusted to the Exercise Price which would then be
in effect had the adjustments been made upon the issuance of such Rights been
made upon the basis of delivery of only the number of shares of Common Stock (or
Common Stock Equivalents) actually delivered.
(c) In case the Company shall hereafter fix a record date for
making a distribution to the holders of Common Stock of assets or evidences of
its indebtedness (excluding cash dividends or distributions out of earnings and
dividends or distributions referred to in paragraph (a) of this Section 3.01) or
Common Stock subscription rights, options or warrants for Common Stock or Common
Stock Equivalents (excluding those referred to in paragraph (b) of this Section
3.01), then in each such case the Exercise Price in effect after such record
date shall be adjusted to the price determined by multiplying the Exercise Price
in effect immediately prior thereto by a fraction, the numerator of which shall
be the total number of shares of Common Stock outstanding multiplied by the
current market price per share of Common Stock (as defined in paragraph (e) of
this Section 3.01), less the fair market value (as determined by the Company's
Board of Directors) of said assets or evidences of indebtedness so distributed
or of such Common Stock subscription rights, option and warrants or of such
Common Stock Equivalents applicable to one share of Common Stock, and the
denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such current market price per share of Common Stock.
Such adjustment shall be made successively whenever the record date for such
distribution is fixed and shall become effective immediately after such record
date.
(d) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to paragraphs (a), (b) or (c) of this Section 3.01,
the adjustment shall be effective upon the record date as to paragraphs (a) and
(c) or the issue date as to paragraph (b) giving rise to the adjustment and the
Warrant Shares shall simultaneously be adjusted by multiplying the number of
Warrant Shares initially issuable upon exercise of each Warrant by the Exercise
Price in effect on the date thereof and dividing the product so obtained by the
Exercise Price, as adjusted.
(e) For the purpose of any computation under this Section 3.01,
the current market price per share of Common Stock at any date shall be deemed
to be the average of the daily closing price for 30 consecutive Business Days
commencing 45 Business Days before such date. The closing price for each day
shall be the last sale price or, in case no such reported sales take place on
such day, the average of the last reported bid and asked prices regular way, in
either case on the principal national securities exchange on which the Common
Stock is admitted to trading or listed, or if not listed or admitted to trading
on such exchange, the representative closing bid price as reported by Nasdaq (or
any stock quotation system on which the Company's Common Stock is then
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primarily traded), or if not so available, the fair market price as determined
by a party mutually agreed to by the Company and the Warrantholders.
(f) No adjustments in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least three (3%)
percent in such price; provided, however, that any adjustments which by reason
of this paragraph (f) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 3.01 shall be made to the nearest cent or to the nearest one-hundredth
of a share, as the case may be. Notwithstanding anything in this Section 3.01 to
the contrary, the Exercise Price shall not be reduced to less than the then
existing par value of the Common Stock as a result of any adjustment made
hereunder.
(g) In the event that at any time, as a result of any adjustment
made pursuant to paragraph (a) of this Section 3.01, the Warrantholder
thereafter shall become entitled to receive any shares of the Company, other
than Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Warrant 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 the Common Stock contained in paragraphs (a) to (f), inclusive, of
this Section 3.01.
SECTION 3.02: NOTICE OF ADJUSTMENT. Whenever the number of Warrant
Shares or the Exercise Price is adjusted as herein provided, the Company shall
prepare and deliver to the Warrantholder a certificate signed by its President,
any Vice President, Treasurer or Secretary, setting forth the adjusted number of
shares purchasable upon the exercise of this Warrant and the Exercise Price of
such shares after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which adjustment
was made.
SECTION 3.03: NO ADJUSTMENTS. Except as provided in Section 3.01 of this
Agreement, no adjustment in respect of any cash dividends shall be made during
the term of this Warrant or upon the exercise of this Warrant. Notwithstanding
anything to the contrary in Section 3.01 of this Agreement, no adjustment shall
be made with respect to (i) options granted under the Company's stock option
plans or otherwise to employees for services or (ii) warrants outstanding on
August 1, 1997.
SECTION 3.04: FORM OF WARRANT AFTER ADJUSTMENTS. The form of this
Warrant need not be changed because of any adjustments in the Exercise Price or
the number or kind of the Warrant Shares, and Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Warrant, as initially issued.
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SECTION 3.05: PRESERVATION OF PURCHASE RIGHTS IN CERTAIN TRANSACTIONS.
(a) In case of any consolidation of the Company with or a merger
of the Company into another corporation 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, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a publicly traded company, the Company
agrees that a condition of such transaction will be that the Company or such
successor or purchasing corporation, as the case may be, shall assume the
obligations of the Company hereunder in writing. In the case of any such
consolidation, merger or sale or conveyance, the Warrantholder shall have the
right until the expiration date upon payment of the Exercise Price in effect
immediately prior to such action, to receive the kind and amount of shares and
other securities and/or property which it would have owned or have been entitled
to receive after the happening of such consolidation, merger, sale or conveyance
had this Warrant been exercised immediately prior to such action, subject to
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article III. The provisions of this Section
3.05 shall similarly apply to successive consolidations, mergers, sales or
conveyances.
(b) In case of any consolidation of the Company with or a merger
of the Company into another corporation 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, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a non-publicly traded company, the
Company agrees that a condition of such transaction will be that the Company
shall mail to the Warrantholder at the earliest applicable time (and, in any
event not less than 20 days before any record date for determining the persons
entitled to receive the consideration payable in such transaction) written
notice of such record date. Such notice shall also set forth facts as shall
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price of and the kind and amount of the
shares of stock and other securities and property deliverable upon exercise of
this Warrant.
ARTICLE IV
OTHER PROVISIONS RELATING
TO RIGHTS OF WARRANTHOLDERS
SECTION 4.01: NO RIGHTS AS SHAREHOLDERS: NOTICE TO WARRANTHOLDERS.
Nothing contained in this Warrant shall be construed as conferring upon the
Warrantholder or its transferees the right to vote or to receive dividends or to
consent or to receive notice as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or of any
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other matter or any rights whatsoever as shareholders of the Company, except to
the extent specifically provided for herein.
SECTION 4.02: LOST, STOLEN MUTILATED OR DESTROYED WARRANTS. If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its discretion impose (which shall, in
the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as, and in substitution for, this
Warrant.
SECTION 4.03: RESERVATION OF SHARES.
(a) The Company covenants and agrees that at all times it shall
reserve and keep available for the exercise of this Warrant such number of
authorized shares of Common Stock as are sufficient to permit the exercise in
full of this Warrant.
(b) Prior to the issuance of any shares of Common Stock upon
exercise of this Warrant, the Company shall use its best efforts to secure the
listing of such shares of Common Stock upon the securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed.
(c) The Company covenants that all shares of Common Stock issued
on exercise of this Warrant will be validly issued, fully paid, non-assessable
and free of preemptive rights.
SECTION 4.04: NO FRACTIONAL SHARES. Anything contained herein to the
contrary notwithstanding, the Company shall not be required to issue any
fraction of a share in connection with the exercise of this Warrant, and in any
case where the Warrantholder would, except for the provisions of this Section
4.04, be entitled under the terms of this Warrant to receive a fraction of a
share upon exercise of this Warrant and receipt of the Exercise Price, issue the
larger number of whole shares purchasable upon exercise of this Warrant. The
Company shall not be required to make any cash or other adjustment in respect of
such fraction of a share to which the Warrantholder would otherwise be entitled.
ARTICLE V
TREATMENT OF WARRANTHOLDER
Prior to due presentment for registration or transfer of this Warrant,
the Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
the purpose of any exercise hereof and for all other purposes of the Company
shall not be affected by any notice to the contrary.
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ARTICLE VI
SPLIT-UP, COMBINATION
EXCHANGE AND TRANSFER OF WARRANTS
SECTION 6.01: SPLIT-UP, COMBINATION, EXCHANGE AND TRANSFER OF WARRANTS.
Subject to and limited by the provisions of Section 6.02 hereof, this Warrant
may be split up, combined or exchanged for another Warrant or Warrants
containing the same terms to purchase a like aggregate number of Warrant Shares.
If the Warrantholder desires to split up, combine or exchange this Warrant, it
shall make such request in writing delivered to the Company and shall surrender
to the Company this Warrant and any other Warrants to be so split up, combined
or exchanged. Upon any such surrender for a split-up, combination or exchange,
the Company shall execute and deliver to the person entitled thereto a Warrant
or Warrants, as the case may be, as so requested. The Company shall not be
required to effect any split-up, combination or exchange which will result in
the issuance of a Warrant entitling the Warrantholder to purchase upon exercise
a fraction of a share of Common Stock or a fractional Warrant. The Company may
require such Warrantholder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split-up,
combination or exchange of Warrants.
SECTION 6.02: RESTRICTIONS ON TRANSFER. This Warrant may be sold,
hypothecated exercised, assigned or transferred (a "Transfer") only in
accordance with and subject to the provisions of the Securities Act and the
rules and regulations promulgated thereunder. At the time of a Transfer, the
Company may require the Warrantholder and its transferee to make such
representations, and may place such legends on certificates representing this
Warrant, as may be reasonably required in the opinion of counsel to the Company
to permit such a Transfer without such registration.
ARTICLE VII
REGISTRATION UNDER THE SECURITIES ACT OF 1933
SECTION 7.01: PIGGYBACK REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If at any time prior
to the Expiration Date the Company proposes to register any class of debt or
equity security or any Common Stock Equivalent under the Securities Act on any
form for the registration of securities under such Act, whether or not for its
own account (other than a registration form relating to (i) a registration of a
stock option, stock purchase or compensation or incentive plan or of stock
issued or issuable pursuant to any such plan, or a dividend investment plan;
(ii) a registration of securities proposed to be issued in exchange for
securities or assets of, or in connection with a merger or consolidation with,
another
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corporation; or (iii) a registration of securities proposed to be issued in
exchange for other securities of the Company) in a manner which would permit
registration of Registrable Securities for sale to the public under the
Securities Act (a "Piggyback Registration"), it will at such time give prompt
written notice to all Holders of Registrable Securities of its intention to do
so and of such Holders' rights under this Section 7.01. Such rights are referred
to hereinafter as "Piggyback Registration Rights". Upon the written request of
any such Holder made within 20 days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such Holder and the intended method of disposition thereof), the Company will
include in the Registration Statement the Registrable Securities which the
Company has been so requested to register by the Holders thereof provided that
the Company need not include any such Registrable Securities in Registration
Statements filed after the Expiration Date.
(b) WITHDRAWAL OF PIGGYBACK REGISTRATION BY COMPANY. If, any time
after giving written notice of its intention to register any securities in a
Piggyback Registration but prior to the effective date of the related
Registration Statement filed in connection with such Piggyback Registration, the
Company shall determine for any reason not to register such securities, the
Company will give written notice of such determination to each Holder and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such Piggyback Registration. All best efforts
obligations of the Company pursuant to Section 7.02 shall cease if the Company
determines to terminate any registration where Registrable Securities are being
registered pursuant to this Section 7.01.
(c) PIGGYBACK REGISTRATION OF UNDERWRITTEN PUBLIC OFFERINGS. If a
Piggyback Registration requested pursuant to this Section 7.01 involves an
underwritten offering, then, (i) all Holders requesting to have their
Registrable Securities included in the Company's registration must sell their
Registrable Securities to the underwriters selected by the Company on the same
terms and conditions as apply to other selling shareholders; and (ii) any Holder
requesting to have its Registrable Securities included in such registration may
elect in writing, not later than three (3) Business Days prior to the
effectiveness of the Registration Statement filed in connection with such
registration, not to have its Registrable Securities so included in connection
with such registration.
(d) PAYMENT OF REGISTRATION EXPENSES FOR PIGGYBACK REGISTRATION.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to a Piggyback
Registration Right contained in this Section 7.01, except for the fees and
disbursements of any
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counsel retained by the Holders of the Registrable Securities being so
registered.
(e) PRIORITY IN PIGGYBACK REGISTRATION. If a Piggyback
Registration involves an underwritten offering and the managing underwriter, in
its sole judgment, advises the Company in writing that the number or kind of
Registrable Securities requested to be included in such Piggyback Registration
would have a material adverse effect on the price or distribution of any
securities to be offered solely for the account of the Company, then the
Registrable Securities to be offered for the accounts of Holders pursuant to a
Piggyback Registration Right shall be eliminated entirely or reduced pro rata as
to all requesting Holders on the basis of the relative number of Registrable
Securities to be included in such offering to the amount recommended by such
managing underwriter; provided, however, that no securities may be offered in
such registration for the account of persons other than the Company by virtue of
their also having "piggyback" registration rights, or otherwise, unless the
Registrable Securities requested to be included in such registration are so
included on a pro rata basis (by percentage of each class of securities) as to
such other persons holding "piggyback" rights and the Holders requesting
registration.
(f) EXPIRATION OF PIGGYBACK REGISTRATION RIGHTS. The Piggyback
Registration Rights shall survive the exercise of the Warrant or the
transactions or events pursuant to which such Registrable Securities were
issued, but all such rights will terminate in all events on the Expiration Date.
The Holders, as a group, shall be limited to three Piggyback Registrations under
this Section 7.01.
SECTION 7.02: DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. Subject to the limitations set
forth below in this Section 7.02, if a Piggyback Registration covering
Registrable Securities has not been declared effective prior to February 1,
1998, any Holder or Holders may from time to time make written requests for the
registration under the Securities Act of their Registrable Securities (a "Demand
Registration") provided the number of Warrant Shares subject to the request is
at least forty (40%) percent of the Warrant Shares issuable under this Warrant
and any other outstanding Warrants. The Company shall use its best efforts to
file and cause to be declared effective under the Securities Act such Demand
Registration. The Holders, as a group, shall be limited to two Demand
Registrations which are declared effective under the Securities Act, and
thereafter may not make any further written requests for registration under this
Section 7.02.
(b) LIMITATIONS ON DEMAND REGISTRATION. The Company shall not be
required to effect a Demand Registration sooner than
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(i) for a sixty (60) day period following the effective date of a registration
statement pertaining to an underwritten Public Offering for the account of the
Company; (ii) if the Company, in its reasonable judgment, determines that
registration at the time requested by the Holders would materially adversely
affect the Company, by, among other things, requiring disclosure of, any
litigation or transactions at an inopportune time, in which case the obligation
of the Company to register any Registrable Securities shall be delayed until the
reason for such adverse affect has ceased to exist, provided that the Company
may apply this limitation not more than once in any period of twelve (12)
months; or (iii) if the timing of the Demand Registration is such that a special
audit of the Company would be required in connection with the preparation of
financial statements for the registration.
SECTION 7.03: REGISTRATION PROCEDURES. If and whenever the
Company is required to use its best efforts to effect or cause the registration
of any Registrable Securities under the Securities Act as provided in this
Article VII, the Company will, as expeditiously as practicable:
(a) notify the selling Holders of Registrable Securities and the
managing underwriters, if any, promptly, and (if requested by any such Person)
confirm such advice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related Prospectus or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose; (iv) if at any time the representations and warranties of the Company
contemplated by paragraph (h) below ceases to be true and correct; (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, and (vi) of
the happening of any event that makes any statement made in the Registration
Statement, the Prospectus or any document incorporated therein by reference
untrue or which requires the making of any changes in the Registration Statement
or Prospectus so that they will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(b) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(c) if reasonably requested by the managing underwriters,
immediately incorporate in a Prospectus supplement or
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post-effective amendment such information as the managing underwriters believe
(on advice of counsel) should be included therein as required by applicable law
relating to such sale of Registrable Securities, including, without limitation,
information with respect to the purchase price being paid for the Registrable
Securities by such underwriters and with respect to any other terms of the
underwritten (or "best-efforts" underwritten) offering; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(d) furnish to each selling Holder of Registrable Securities and
each managing underwriter, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by all
exhibits (including those incorporated by reference);
(e) deliver to each selling Holder of Registrable Securities and
the underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; the Company consents
to the use of such Prospectus or any amendment or supplement thereto by each of
the selling Holders of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto;
(f) prior to any public offering of Registrable Securities,
cooperate with the selling Holders of Registrable Securities, the underwriters,
if any, and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any seller or underwriter reasonably requests in writing, use its reasonable
efforts to keep each such registration or qualification effective during the
period such Registration Statement is required to be kept effective and any and
all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; PROVIDED that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject the Company to general
service of process in any jurisdiction where it is not at the time so subject or
would subject the principal stockholders of the Company to any restrictions on
the resale or transfer of their shares of the Company's Common Stock;
(g) cooperate with the selling Holders of Registrable Securities
and the managing underwriters, if any, to facilitate the
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timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriters may request at least two Business Days prior to any
sale of Registrable Securities to the underwriters;
(h) upon the occurrence of any event contemplated by paragraph
(a)(vi) above, promptly prepare a supplement or post-effective amendment to the
applicable Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, such Prospectus will not contain an untrue statement or a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(i) with respect to each issue or class of Registrable
Securities, use its best efforts to cause all Registrable Securities covered by
the Registration Statements to be listed on each securities exchange on which
similar securities issued by the Company are listed, if so requested by the
Holders of a majority of such Registrable Securities; and
(j) except as otherwise provided in this Agreement, the Company
shall have sole control in connection with the preparation, filing, withdrawal,
amendment or supplementing of each Registration Statement, the selection of
underwriters, and the distribution of any preliminary prospectus included in the
Registration Statement, and may include within the coverage thereof additional
shares of Common Stock or other securities for its own account or for the
account of one or more of its other security holders.
SECTION 7.04: AGREEMENTS BY SELLING HOLDERS.
(a) The Company may require each seller of Registrable Securities
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such securities and such other
information as may otherwise be required by the Securities Act to be included in
such Registration Statement, as the Company may from time to time reasonably
request in writing.
(b) Each Holder of Registrable Securities agrees by acquisition
of such Registrable Securities that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 7.03(a) or (b)
hereof, such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 7.03(h) hereof, or until it is
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advised in writing by the Company that the use of the applicable Prospectus may
be resumed, and has received copies of any additional or supplemental filings
which are incorporated by reference in such Prospectus, and, if so directed by
the Company, such holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. Each Holder of Registrable Securities agrees to notify
the Company upon completion of its distribution of such Registrable Securities.
(c) Each holder of Registrable Securities whose Registrable
Securities are covered by a Registration Statement filed pursuant to Article VII
hereof agrees, if requested by the managing underwriters in any underwritten
offering, not to effect any public sale or distribution of any securities of the
Company of the same class as the securities included in such Registration
Statement, including a sale pursuant to rule 144 under the Securities Act
(except as part of such underwritten registration), during any period during
which the officers and directors of the Company and any other selling
shareholders included in such Registration Statement are similarly restricted in
the sale or distribution of any securities of the Company pursuant to such
Registration Statement, to the extent timely notified in writing by the managing
underwriters.
SECTION 7.05: INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY. The Company agrees to indemnify
and hold harmless, to the full extent permitted by the law, each Holder, its
officers, directors and agents and each Person who controls such Holder or
agents (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses caused by any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, Prospectus
or preliminary prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are contained in any
information furnished in writing to the Company by such Holder expressly for use
therein; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or in based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary prospectus if (i) such
Holder failed to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale of Registrable Securities and (ii)
the Prospectus would have corrected such untrue statement or omission; and
provided, further, that the Company shall not be liable in any such case to the
extent that any such loss claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement or
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omission or alleged omission in the Prospectus, if such untrue statement or
untrue statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and if, having previously been furnished by or on
behalf of the Company with copies of the Prospectus as so amended or
supplemented, such Holder thereafter fails to deliver or cause to be delivered
such Prospectus as so amended or supplemented, prior to or concurrently with the
sale of a Registrable Security to the person asserting such loss, claim, damage,
liability or expense who purchased such Registrable Security from such Holder.
The Company will also indemnify underwriters, selling brokers, dealer managers,
and similar securities industry professionals participating in the distribution
their officers and directors and each person who controls such Persons (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Securities, if
requested.
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. In
connection with any registration, each Holder will furnish to the Company in
writing such information and affidavits as the Company reasonably requests for
use in connection with any Registration Statement or Prospectus and agrees to
indemnify, to the same extent as the indemnification provided by the Company in
Section 7.05(a), the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act) and any other
selling Holder against all losses, claims, damages, liabilities and expenses
caused by any untrue statement of a material fact or any omission of a material
fact required to be stated in any Registration Statement or Prospectus or
preliminary prospectus or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue statement or
omission is contained in or based upon any information or affidavit so furnished
in writing by such Holder to the Company specifically for inclusion in such
Registration Statement or Prospectus. In no event shall the liability of any
selling Holder of Registrable Securities hereunder be greater in amount than the
dollar amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation. The
Company shall be entitled to receive indemnities from underwriters, selling
brokers, dealer managers, and similar securities industry professionals
participating in the distribution, to the same extent as provided above with
respect to information so furnished in writing by such Persons specifically for
inclusion in any prospectus or Registration Statement.
(c) CONDUCT OF INDEMNIFICATION PROCEDURE. Any party that proposes
to assert the right to be indemnified hereunder will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or parties
under this
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Section, notify each such indemnifying party of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served, No indemnification
provided for hereunder shall be available to any party who shall fail to give
notice as provided in this Section 7.05(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve
it from any liability that it may have to any indemnified party for contribution
or otherwise than under this Section. In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and the approval by the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying parties,
(ii) the indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the indemnified party
in the conduct of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party) or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action, suit,
proceeding or claim effected without its written consent.
ARTICLE VIII
OTHER MATTERS
SECTION 8.01: EXPENSES OF TRANSFER. The Company will from time to time
promptly pay, subject to the provisions of Section 6.01 and paragraph (d) of
Section 2.02, all taxes and charges that may be imposed upon the Company in
respect to the issuance or
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delivery of Warrant Shares upon the exercise of this Warrant by the
Warrantholder.
SECTION 8.02: SUCCESSORS AND ASSIGNS. All the covenants and provisions
of this Warrant by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.
SECTION 8.03: AMENDMENTS AND WAIVERS. The provisions of this Warrant,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waiver or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of holders
of at least a majority of the outstanding Warrants. Holders shall be bound by
any consent authorized by this Section whether or not certificates representing
such Warrants have been marked to indicate such consent.
SECTION 8.04: COUNTERPARTS. This Warrant may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 8.05: GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 8.06: SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
SECTION 8.07: INTEGRATION/ENTIRE AGREEMENT. This Warrant is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This Warrant
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
SECTION 8.08: NOTICES. Notice or demand pursuant to this Warrant to be
given or made by the Warrantholder to or on the Company shall be sufficiently
given or made if sent by first class mail, postage prepaid, to the Warrantholder
or the Holder of Registrable Securities at its last known address as it shall
appear on the books of the Company, and to the Company at c/o First South Africa
Management Corp., 2665 South Bayshore, Suite 702, Coconut Grove, Florida 33133,
or to such other address as may be duly given to such Holder.
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SECTION 8.09: HEADINGS. The Article headings herein are for convenience
only and are not part of this Warrant and shall not affect the interpretation
thereof.
IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company under its corporate seal as of the 1st day of August, 1997.
FIRST SOUTH AFRICA CORP., LTD.
By:________________________________
Name: Clive Kabatznik
Title: President
(Corporate Seal)
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ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, _____________________________ hereby sells, assigns and
transfers unto ______________________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ______________________ attorney, to transfer said Warrant
Certificate on the books of FIRST SOUTH AFRICA CORP., LTD. with respect to the
number of Warrants set forth below, with full power of substitution in the
premises:
Name(s) of
ASSIGNEE(S) ADDRESS NO. OF WARRANTS
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants represented by said
Warrant Certificate.
The Assignor agrees on behalf of himself and his assignee that the requested
assignment shall be in accordance with Section 6.02 of the Warrant Agreement
pursuant to which the Warrant Certificate was issued.
Dated: ______________ ___, 19__.
___________________________________
Note: The above signature should
correspond exactly with the
name on the face of this
Warrant Certificate.
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EXERCISE FORM
(To be executed upon exercise of Warrant)
FIRST SOUTH AFRICA CORP., LTD.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, _________ shares of Common Stock, as provided for therein, at an
aggregate exercise price of $_____, and tenders herewith payment of the purchase
price in full in the form of (i) a wire transfer, a certified or bank draft in
the amount of $_______, and/or (ii) _____ shares of Common Stock of FIRST SOUTH
AFRICA CORP., LTD. having a fair market value of $_____ and/or (iii) _____
shares as determined by the formula set forth in Section 2.02 of the Warrant
Certificate.
Please issue a certificate or certificates for such Common
Shares in the name of
Name__________________________
(Please Print)
__________________________
Address
__________________________
__________________________
Tax Identification No.
Signature_____________________
Note: The above signature
should correspond
exactly with the
name on the first
page of this Warrant
Dated: _______________ ___, 19__. Certificate.
And if said number of shares shall not be all the shares purchasable
under the within Warrant Certificate, a new Warrant Certificate is to be issued
in the name of the undersigned for the balance remaining of the number of whole
shares purchasable thereunder.
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