<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 14, 1998
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CHIREX INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
<TABLE>
<CAPTION>
<S> <C>
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION 04-3296309
OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
300 ATLANTIC STREET, SUITE 402
STAMFORD, CONNECTICUT 06901
203-351-2300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTION OFFICES)
BETH P. HECHT, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
CHIREX INC.
300 ATLANTIC STREET, SUITE 402
STAMFORD, CONNECTICUT 06901
203-351-2300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
KRIS F. HEINZELMAN, ESQ.
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS PROPOSED MAXIMUM AGGREGATE
OF SECURITIES TO AMOUNT TO BE OFFERING OFFERING AMOUNT OF
BE REGISTERED REGISTERED PRICE PER UNIT(1) PRICE(2) REGISTRATION FEE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(4) ....
Preferred Stock, par
value
$.01 per share (5)(6)
......................
Depositary Shares(6)... (3) (3) (3) (3)
Common Stock, par value
$.01 per share(7).....
Warrants(8)............
- -------------------------------------------------------------------------------
Total................... $100,000,000(9) 100% $100,000,000(9) $27,800
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with the issuance by the
registrant of the securities registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely
for the purpose of calculating the registration fee pursuant to Rule
457(o) under the Securities Act of 1933.
(3) Not applicable pursuant to General Instructions II.D. of Form S-3.
(footnotes continued on next page)
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
(continued from previous page)
(4) Subject to note (9) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from
time to time, by the registrant. If any Debt Securities are issued at an
original issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering price
not to exceed $100,000,000 less the dollar amount of any securities
previously issued hereunder.
(5) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from
time to time, by the registrant. There are also being registered hereunder
an indeterminate number of shares of Preferred Stock as shall be issuable
upon the exercise of certain associated Rights (as defined) to purchase
fractional interests in shares of Preferred Stock. Until the occurrence of
certain prescribed events, none of which has occurred, the Rights are not
exercisable.
(6) Subject to note (9) below, there is being registered hereunder an
indeterminate number of Depositary Shares (to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement) as may be sold, from time
to time, by the registrant. In the event the registrant elects to offer
fractional interests in shares of Preferred Stock registered hereunder,
Depositary Receipts will be distributed to those persons purchasing such
fractional interests and the shares of Preferred Stock will be issued to
the depositary under the Deposit Agreement.
(7) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time
to time, by the registrant. There are also being registered hereunder (i)
an indeterminate number of shares of Common Stock as may be issuable upon
conversion or redemption of Preferred Stock or Debt Securities registered
hereunder and (ii) the Rights referred to in note (5) above. Until the
occurrence of certain prescribed events, none of which has occurred, the
Rights are evidenced by the certificates representing the Common Stock and
will be transferred along with and only with the Common Stock. After the
occurrence of certain prescribed events, none of which has occurred, the
Rights will be evidenced by separate certificates.
(8) Subject to note (9) below, there is being registered hereunder an
indeterminate amount and number of Warrants, (representing rights to
purchase Debt Securities, Preferred Stock, or Common Stock registered
hereunder.) as may be sold, from time to time, by the registrant.
(9) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$100,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units or composite currencies. The securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION DATED DECEMBER 14, 1998
CHIREX INC.
DEBT SECURITIES,
PREFERRED STOCK,
DEPOSITARY SHARES,
WARRANTS
AND COMMON STOCK
From time to time, we may sell any of the following securities:
. DEBT SECURITIES which may be
--senior or subordinated in priority of payment
--convertible or exchangeable into other of our securities or the
securities of another issuer
. PREFERRED STOCK which may be convertible into our common stock or
exchangeable for our debt securities
. DEPOSITARY SHARES which represent a fractional share of our preferred stock
. WARRANTS which would allow a buyer to purchase our debt securities, preferred
stock or common stock
. COMMON STOCK
When we decide to sell a particular series of securities, we will prepare a
Prospectus Supplement describing such securities offering and the particular
terms of the securities. You should read this Prospectus and any Prospectus
Supplement carefully.
Our common stock is listed on the Nasdaq Stock Market's National Market under
the trading symbol "CHRX".
This investment involves risks. See the Risk Factors section beginning on
page 1.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE SECURITIES TO BE ISSUED UNDER THIS
PROSPECTUS OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR ADEQUATE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is . , 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
About This Prospectus...................................................... i
Where You Can Find More Information........................................ ii
Disclosure Regarding Forward-Looking Statements............................ ii
The Company................................................................ 1
Risk Factors............................................................... 1
Use of Proceeds............................................................ 7
Earnings to Fixed Charges--Coverage Deficiency............................. 7
Description of Debt Securities............................................. 8
Description of Capital Stock............................................... 20
Description of Depositary Shares........................................... 23
Description of Warrants.................................................... 26
Plan of Distribution....................................................... 27
Legal Opinions............................................................. 28
Experts.................................................................... 28
</TABLE>
This Prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission (the "SEC") utilizing a "shelf" registration
process. Under this shelf process, we may, from time to time over approximately
the next two years, sell any combination of the securities described in this
Prospectus in one or more offerings up to a total dollar amount of $100,000,000
or the equivalent of this amount in foreign currencies or foreign currency
units.
This Prospectus provides you with a general description of the securities we
may offer. Each time we sell securities, we will provide a Prospectus
Supplement that will contain specific information about the terms of that
offering. The Prospectus Supplement may also add, update or change information
contained in this Prospectus. You should read both this Prospectus and any
Prospectus Supplement together with additional information described under the
heading "Where You Can Find More Information About the Company" beginning on
page (i) of this Prospectus.
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell notes and making offers
to buy notes only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or any
sale of the notes. In this prospectus, the "Company," "we," "us" and "our"
refer to CHIREX INC.
CERTAIN PERSONS PARTICIPATING IN THE OFFERING OF THE OFFERED SECURITIES MAY
ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE
OF THE OFFERED SECURITIES OR ANY SECURITIES THE PRICES OF WHICH MAY BE USED TO
DETERMINE PAYMENTS ON THE OFFERED SECURITIES. SPECIFICALLY, THE UNDERWRITERS OR
AGENTS SPECIFIED IN THE RELEVANT PROSPECTUS SUPPLEMENT OR PRICING SUPPLEMENT
MAY OVERALLOT IN CONNECTION WITH THE OFFERING, AND MAY BID FOR AND PURCHASE THE
OFFERED SECURITIES OR ANY SECURITIES THE PRICES OF WHICH MAY BE USED TO
DETERMINE PAYMENTS ON THE OFFERED SECURITIES IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION" IN THIS PROSPECTUS
AND "PLAN OF DISTRIBUTION" OR "UNDERWRITING" IN THE RELEVANT PROSPECTUS
SUPPLEMENT.
i
<PAGE>
WHERE YOU CAN FIND MORE
INFORMATION ABOUT THE COMPANY
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus, and
later information filed with the SEC will update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act until our offering is completed:
(1) Annual Reports on Form 10-K for the year ended December 31, 1997 and
Form 10K/A for the year ended December 31, 1997;
(2) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998; and
(3) Current Reports on Form 8-K filed on July 7, 1998 and September 1,
1998.
You may request a copy of these filings, at no cost, by writing to or
telephoning us at the following address:
Beth P. Hecht
Vice President, Secretary and General Counsel
ChiRex Inc.
300 Atlantic Street, Suite 402
Stamford, Connecticut 06901
(203) 351-2300
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 (the "Securities Act") and Section
21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act").
These forward-looking statements are subject to a number of risks and
uncertainties, many of which are beyond the Company's control. Forward-looking
statements are typically identified by the words "believe," "expect,"
"anticipate," "intent," "estimate" and similar expressions.
Actual results could differ materially from those contemplated by these
forward-looking statements as a result of factors ("Cautionary Statements")
such as product development and market acceptance risks, product manufacturing
risks, the impact of competitive products and pricing, the results of current
and future licensing and other collaborative relationships, the results of
financing efforts, developments regarding intellectual property rights and
litigation, risks of product non-approval or delays or post-approval reviews
by the U.S. Food and Drug Administration ("FDA") or foreign regulatory
authorities and those described under "Risk Factors."
In light of these risks and uncertainties, there can be no assurance that
the results and events contemplated by the forward-looking information
contained in this Prospectus will in fact transpire. Potential investors are
cautioned not to place undue reliance on these forward-looking statements. The
Company does not undertake any obligation to update or revise any forward-
looking statements. All subsequent written or oral forward-looking statements
attributable to the Company or persons acting on behalf of the Company are
expressly qualified in their entirety by the Cautionary Statements.
ii
<PAGE>
THE COMPANY
ChiRex Inc. serves the outsourcing needs of some of the largest
pharmaceutical and life science companies in the world by providing
pharmaceutical fine chemical manufacturing and process development services
and offering its customers access to the Company's extensive portfolio of
proprietary technologies (the "ChiRex Technologies"). The Company's contract
manufacturing services developed over the past thirty years, include process
research and development, hazard evaluation, clinical quantity production and
pilot-scale and commercial-scale manufacturing at its world-class, current
Good Manufacturing Practices facilities in Dudley, England (the "Dudley
Facility") and Annan, Scotland (the "Annan Facility"). The Company's customers
include Glaxo Wellcome plc, Sanofi S.A., Pfizer Inc., Pharmacia & Upjohn Inc.,
Bristol Myers-Squibb, Eli Lilly and Company, Astra, Rohm and Haas Company and
SmithKline Beecham plc.
As drug companies have focused their resources on the discovery and
development of new drugs that often require complex syntheses, they have
increasingly sought to outsource their process development and manufacturing
requirements to contract manufacturing organizations, such as ChiRex. The
Company believes that the recent trend of pharmaceutical and life science
companies to increase outsourcing of drug development and manufacturing
activities will continue as a result of: (i) cost containment pressures; (ii)
the need to reduce drug development time; (iii) the use of increasingly
complex chemical syntheses; and (iv) the growth of the biotechnology segment
of the industry.
One of the Company's most important and long-standing relationships is with
Glaxo Wellcome. In the fall of 1997, the Company enhanced this relationship by
purchasing the Annan Facility from Glaxo Wellcome and entering into a five-
year supply agreement (the "Glaxo Supply Agreement"). Pursuant to the Glaxo
Supply Agreement, the Company, through both of its manufacturing facilities,
will supply Glaxo Wellcome with certain pharmaceutical intermediates and
active ingredients for some of its important new drugs. Since the acquisition
of the Annan Facility, the Company has been redesigning, reconfiguring and
upgrading the Annan Facility (the "Annan Renovation") to manufacture certain
of the products to be supplied under the Glaxo Supply Agreement and to
increase the general flexibility of the Annan Facility for other products.
The Company's principal executive offices are located at 300 Atlantic
Street, Suite 402, Stamford, Connecticut 06901, and its telephone number at
those offices is 203-351-2300.
RISK FACTORS
HOLDING COMPANY STRUCTURE; STRUCTURAL SUBORDINATION
We are a holding company whose only asset, excluding certain trademarks, is
our investment in our subsidiaries. We conduct no business or operations and
we are completely dependent on the earnings of our subsidiaries to pay debt
obligations. Our subsidiaries do not have to make funds available to us,
whether in the form of loans, dividends or otherwise.
None of our English subsidiaries may pay us dividends unless such payments
are made out of profits available for distribution. Such profits consist of
accumulated, realized profits not previously written off in a reduction or
reorganization of capital.
PRODUCT DEVELOPMENT RISKS; DEPENDENCE ON OTHERS
Part of our business strategy involves collaborating with our customers in
the early stage of product development. This enables us to establish long-term
relationships for the manufacture of these products upon their
commercialization. We currently collaborate with customers on a substantial
number of development products, the majority of which are currently in
clinical trials. Our success depends in large part on the following factors:
. the commercial viability of new pharmaceutical and life science products
being developed by our customers
1
<PAGE>
. our customers' willingness to attempt to commercialize such products
. the ability of our pharmaceutical and life science customers to conduct
clinical trials, obtain required regulatory approvals and successfully
market such products
In particular, the marketing and sale of pharmaceutical products in the
United States will require FDA approvals and will require similar approvals in
foreign countries. To obtain such approvals, the safety and efficacy of these
products must be demonstrated through human clinical trials which, if
permitted, can take several years. We cannot assure you that any of these
products will be safe or efficacious. Each stage in the development of these
products can require substantial investment and take a long time without any
assurance as to the commercial viability of these products, the absence of
competing drugs or alternative therapies. We cannot assure you that our
product development efforts will be successful, that required regulatory
approvals can be obtained on a timely basis, if at all, that products can be
manufactured at an acceptable cost and with appropriate quality, that any
products, if approved, can be successfully marketed or that our customers will
commercialize such products.
DEPENDENCE ON KEY CUSTOMERS AND PRODUCTS
Our largest customers account for a significant percentage of our revenues.
In 1997, our largest customers accounted for approximately 76% of total
revenues. Sanofi, Glaxo Wellcome, Rohm and Haas and SmithKline Beecham
accounted for approximately 36%, 17%, 13% and 10% of our revenues,
respectively. In addition, our top ten revenue generating products accounted
for 74% of 1997 revenues. We will continue to rely on a limited number of
customers, particularly Glaxo Wellcome, as well as a limited number of
products for a great deal of our revenues. The loss of any customer, or a
material amount of sales to any customer, could have a material adverse effect
on our business and results of operations. Our customers may also be
susceptible to adverse effects on their own businesses due to changes in
government regulation, including those regarding health care reform.
RISKS ASSOCIATED WITH THE ANNAN RENOVATION
We acquired the Annan Facility in the fall of 1997. Since then, we have been
redesigning, reconfiguring and upgrading the facility to:
. manufacture the products we will supply under the Glaxo Supply Agreement
. increase the general flexibility of the Annan Facility to manufacture
other products.
We will be subject to all of the risks inherent in renovating a complex, FDA
and European Community-approved production facility. The commercial success of
the Annan Facility depends upon, among other things, its successful renovation
and operation at projected capacity. We cannot assure you that we will be able
to complete the Annan Renovation on time or on budget or to operate the
facility at its anticipated capacity.
We believe that any difficulties we experience will be typical of those
encountered when renovating such a facility. However, we cannot assure you
that we will not experience operational difficulties upon completion of the
Annan Renovation, or that we will ultimately achieve or be able to sustain
optimal production at the facility. Moreover, even after the facility is fully
operational, we may experience difficulties in validating the products we
intend to manufacture at the Annan Facility. Any significant delay in
completing the Annan Renovation, starting up full-scale production of
scheduled intermediates or validating the products scheduled to be
manufactured there could have a material adverse affect on us and our
relationship with Glaxo Wellcome.
RELATIONSHIP WITH GLAXO WELLCOME
In the fall of 1997, we entered into the Glaxo Supply Agreement. While sales
to Glaxo Wellcome already accounted for approximately 17% of our revenues
during 1997, we expect that over the next five years, an even higher
percentage of our total revenues will come from our sales to Glaxo Wellcome
under the Glaxo Supply
2
<PAGE>
Agreement. In addition, the Glaxo Supply Agreement contains certain profit
sharing provisions in the event that we supply greater volumes of products
than anticipated in the Glaxo Supply Agreement. Moreover, while the Glaxo
Supply Agreement contains certain provisions for renewal, we cannot assure you
that the contract will be renewed.
To meet expected demand under the Glaxo Supply Agreement, we are investing
approximately $39 million in capital expenditures for significant plant
modifications and expansion at our Dudley and Annan facilities. We anticipate
that the Annan Renovation will be completed in stages during the fourth
quarter of 1998 and the first quarter of 1999. The Annan Facility will be
fully operational during the first quarter of 1999.
During the second quarter of 1998, we experienced production difficulties at
our Dudley Facility in connection with one of the products being supplied to
Glaxo Wellcome. We had to significantly reduce production of this product
until we identified the cause of the problem and satisfactorily resolved these
difficulties. We resumed full-scale production in July 1998.
RISKS ASSOCIATED WITH OPERATING FACILITIES
Many factors, such as production disruptions, industrial accidents,
environmental hazards, technical difficulties or equipment failures, labor
disputes, late delivery of supplies, and periodic or extended interruptions
due to inclement or hazardous weather conditions, fires, explosions or other
accidents or acts of force majeure, could cause serious operational problems
at the Annan and Dudley Facilities. These events could damage or destroy the
Annan and/or Dudley Facilities, cause personal injury, environmental damage,
delays in productions, or result in financial losses and legal liability. Any
prolonged downtime or shutdowns of the Annan and/or Dudley Facilities could
have a material adverse effect on our business, results of operations,
financial conditions or prospects.
COMPETITION; RAPID TECHNOLOGICAL CHANGE
We operate in an extremely competitive environment. Many of our competitors
are major chemical and pharmaceutical companies, including a number of our own
customers, that have much greater financial resources, technical skills and
marketing experience than we do. Our competitive market is characterized by
extensive research efforts and rapid technological progress. We expect new
developments to continue, and we cannot assure you that discoveries by our
competitors will not render our research and development, our technologies or
our potential products obsolete or noncompetitive. Competition may grow more
intense as industry-wide technological progress accelerates and more money is
invested in these fields.
Competition in our market is based upon reputation, service, manufacturing
capability and expertise, price and reliability of supply. We cannot assure
you that we will be successful in obtaining customer contracts on commercially
favorable terms, if at all. Furthermore, our success depends to a significant
extent on our ability to provide manufacturing services to potential customers
at an early stage of product development. We cannot assure you that we will be
successful in such efforts. In addition, we may not be able to attract and
retain experienced management and technical personnel.
ENVIRONMENTAL RISKS; HAZARDOUS MATERIALS
Our manufacturing and research and development processes involve the
controlled use of hazardous materials. We are subject to laws and regulations
in the United Kingdom governing the use, manufacture, storage, handling and
disposal of such materials and certain waste products. In the event of
contamination or injury from hazardous materials, we could be held liable for
any damages that result. Our liability for these damages could exceed our
resources. In addition, we may have to incur significant costs to comply with
environmental laws and regulations in the future. Any environmental regulatory
action taken by U.K. environmental authorities causing the temporary cessation
of production operations at the Dudley or Annan facilities could have a
material adverse effect on our results of operations. Maintaining our
permitted effluent
3
<PAGE>
discharge limits and implementing air emission improvement programs acceptable
to the regulatory authorities may also prove costly. These programs may
require significant ongoing capital expenditures in an amount greater than we
currently anticipate, which could have a material adverse effect on our
results of operations.
COMPREHENSIVE GOVERNMENTAL REGULATION
Our operations, as well as those of our customers, are subject to extensive
regulation by numerous governmental authorities in the United States, the
United Kingdom and other countries. In particular, we are required to adhere
to applicable FDA regulations for cGMP, including extensive record keeping and
reporting and periodic inspections of our manufacturing facilities. Similar
requirements are imposed by governmental agencies in other countries. The
concept of cGMP encompasses all aspects of the production process and involves
changing and evolving standards. Consequently, continuing compliance with cGMP
is a particularly difficult part of regulatory compliance. Failure to comply
with the applicable regulatory requirements can, among other things, result in
fines, suspensions of regulatory approvals, product recalls, operating
restrictions and criminal prosecution. We are also subject to numerous
environmental, health and workplace safety laws and regulations, including
those governing emissions control, laboratory procedures and the handling of
hazardous materials. Any violation of, and cost of compliance with, these laws
and regulations could adversely affect our operations.
Governmental laws and regulations, including environmental laws and
regulations, require us to obtain permits from appropriate regulatory agencies
to continue to operate our manufacturing facilities. These permits generally
require periodic renewal or review of their conditions, and public comment may
be solicited in the permitting process. We cannot assure you that we will be
able to obtain all necessary permits or renew all existing permits, or that
material changes in permit conditions will not be imposed or that material
public opposition will not surface. Failure to obtain or renew certain permits
could result in the shutdown of our facilities or the imposition of
significant fines, each of which would have a material adverse effect on our
business and results of operations.
PATENT AND LICENSE UNCERTAINTIES
Our proprietary rights with respect to our products and processes are
generally protected only to the extent that they are covered by valid and
enforceable patents or are maintained in confidence as trade secrets. We
currently have the perpetual, exclusive and royalty-free right and license to
use and practice the ChiRex Technologies on a worldwide basis in a defined
field. Our principal patents expire at various times beginning in 2005. Some
of our technology remains uncovered by any patent or patent application. In
addition, we have ongoing research efforts and expect to seek additional
patents in the future covering patentable results of such research. We cannot
assure you that any pending patent applications we file will result in patents
being issued, or that any patents or licenses:
. will protect us against competitors with similar technologies
. will not be infringed upon or designed around by others
. will not be challenged by others and held to be invalid or unenforceable
In the absence of patent protection, our business may be adversely affected
by competitors who independently develop substantially equivalent technology.
There may be third-party patents relating to technology we use. We may need
to acquire licenses to, or to contest the validity of, any such patents.
Defending any claim that we are infringing a third-party patent would most
likely prove costly, and any such claim could adversely affect us until the
claim is resolved. Furthermore, any such dispute could result in a rejection
of our patent applications or the invalidation of our patents. We cannot
assure you that we could obtain any licenses required under such patents on
acceptable terms or that we would prevail in any litigation involving such
patents. Any of the foregoing negative results could have a material adverse
effect on us and our results of operations.
4
<PAGE>
We use our own proprietary technology, including technology that may not be
patented or patentable. We seek to protect our proprietary technology through,
among other things, confidentiality agreements and, if applicable, inventors'
rights agreements with our collaborators, advisors, employees and consultants.
We cannot assure you that these agreements will not be breached, that we will
have adequate remedies for any breach or that our trade secrets will not
otherwise be disclosed to, or discovered by, our competitors. In addition, we
cannot assure you that these collaborators, advisors, employees and
consultants will not claim rights to intellectual property arising out of
their research.
PRODUCT LIABILITY RISKS; LACK OF INSURANCE
Our business exposes us to product liability risks inherent in the testing,
manufacturing and marketing of pharmaceuticals and life science products. We
have limited product liability insurance coverage, and we cannot assure you
that we will be able to obtain further product liability insurance on
acceptable terms or that our current or future insurance will provide adequate
coverage against any or all potential claims. In addition, we have no clinical
trial liability insurance.
SIGNIFICANT RISKS RELATING TO INTERNATIONAL OPERATIONS; CURRENCY FLUCTUATIONS;
INTRODUCTION OF THE EURO
Substantially all of our operations are conducted outside the United States.
Upon completion of the Annan Renovation, we will operate two manufacturing
facilities in the United Kingdom, where substantially all of our employees are
located. For 1995, 1996, 1997 and the six months ended June 30, 1998, net
sales of our products outside the United States totaled approximately $85
million (on a pro forma basis), $82 million (on a pro forma basis), $89
million and $49 million, representing 96% (on a pro forma basis), 92% (on a
pro forma basis), 94% and 94%, respectively, of our net sales for those
periods. As a result of our international operations, we are subject to risks
associated with operating in foreign countries, including devaluations and
fluctuations in currency exchange rates, imposition or increase of withholding
and other taxes on remittances and other payments by foreign subsidiaries,
trade barriers, political risks and imposition or increase of investment and
other restrictions by foreign governments. Because substantially all of our
revenues and expenses are denominated in Pounds Sterling, our revenues, cash
flows and earnings are directly and materially affected by fluctuations in the
exchange rate between the Pound Sterling and the U.S. Dollar. We cannot assure
you that these risks will not have a material adverse effect on our business
and operating results.
The treaty on the European Union (the "Treaty") provides, among other
things, that on or before January 1, 1999, and subject to the fulfilment of
certain conditions, the "Euro" will replace some of the currencies of the
member states of the European Union (the "EU"), including countries in which
we market our products. We cannot assure you that the introduction of the Euro
will not increase the volatility of Pounds Sterling exchange rates or result
in the future appreciation of Pounds Sterling, which could, in either case,
adversely affect our results of operations. The United Kingdom government has
stated that it will not participate in the European monetary union at its
commencement, although it is possible that under certain circumstances it may
participate at a later date. If the United Kingdom were to participate in the
European monetary union, the Pound Sterling will be replaced by the Euro.
FLUCTUATIONS IN QUARTERLY RESULTS OF OPERATIONS
Our quarterly operating results may vary significantly, depending on factors
such as the timing of substantial orders and new product introductions by us
or our competitors. Accordingly, results of operations for any quarter are not
necessarily indicative of the results of operations for a full year or
otherwise. We cannot assure you that we will be able to achieve or maintain
profitability on an annual or quarterly basis.
MANAGEMENT CHANGES
Since our initial public offering on March 5, 1996, we have had significant
changes in our senior management. On July 7, 1998, Mr. Alan R. Clark, Chairman
of the Board and Chief Executive Officer, retired from the Company and
resigned from the Board of Directors, and a number of other senior management
changes
5
<PAGE>
were made. On September 1, 1998, the Board of Directors appointed Mr. Michael
A. Griffith, formerly the Chief Financial Officer of the Company, as Chairman
of the Board and Chief Executive Officer, and Mr. Frank J. Wright, formerly
Vice President, Annan Operations, as Executive Vice President. In addition, on
September 1, 1998, the Company hired a new Chief Operating Officer, Mr. Ian
Shott. The new senior management team has only recently been established. We
cannot assure you that further changes will not be implemented or that the
recent changes in personnel will not have an adverse effect on our operations.
YEAR 2000 ISSUE
We have worked internally to identify and resolve any "year 2000" compliance
issues. We have also engaged external resources, including hiring an
independent consulting firm. We intend to purchase necessary computer software
and upgrades to become year 2000 compliant. We are implementing a year 2000
compliant management information system at our Annan Facility.
To ensure year 2000 compliance, we will develop comprehensive testing
procedures once necessary software and equipment have been installed. We are
implementing a year 2000 compliant management information system at our Annan
facility in connection with our business plans for this location. We plan to
implement these systems at our other locations, including the Dudley Facility,
in 1999. We expect to spend approximately $3.0 million on year 2000 compliant
systems and equipment, and will expense these costs in accordance with current
accounting guidance.
We believe that the systems at two of the three production facilities at
Annan are year 2000 compliant. At present, we do not utilize the third
production facility at Annan. If we do begin operations at this third
facility, we expect to spend approximately $1.0 million upgrading the
facility's computer systems and applications. We will expense these costs in
accordance with current accounting guidance.
We have contingency plans in place for all our major computer systems and
applications. These plans include manual capability of certain business areas,
if necessary, and the controlled shutdown and start-up of the manufacturing
plant for a minimum period of days during the date change. The approach,
methodology, plan and contingencies for our internal processes have been
reviewed by our independent computer consultant and are subject to further
development and testing. Our contingency plans for external factors, such as
supply of raw materials, access to funds and potential utility disruption, are
at a preliminary stage and require further development.
However, we cannot assure you that all year 2000 compliance issues will be
resolved without any future disruption or that we will not incur significant
additional expense. In addition, if some of our major suppliers and customers
fail to address their own year 2000 compliance issues, their non-compliance
could have a material adverse effect on us and our operations.
RISKS RELATED TO ENFORCEABILITY OF CIVIL LIABILITIES
We are a Delaware corporation. Although investors will be able to effect
service of process in the United States upon the Company, we are a holding
company and our principal assets are the stock of our subsidiaries. In
addition, virtually all of our tangible assets are owned by our subsidiaries
incorporated in, and physically located in, the United Kingdom. As a result,
it may not be possible for investors to enforce judgments of United States
courts upon the civil liability provisions of United States laws against our
subsidiaries and substantially all of our assets. Moreover, we have been
advised by our legal counsel in the United Kingdom, Dibb Lupton Alsop, that
there is doubt as to the enforceability in the United Kingdom of original
actions or, in actions for enforcement of judgments of the United States
courts, of civil liabilities based upon United States federal securities laws.
6
<PAGE>
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used for general
corporate purposes, which may include repayment of indebtedness, acquisitions,
additions to working capital, capital expenditures and repurchases and
redemption of securities.
EARNINGS TO FIXED CHARGES--COVERAGE DEFICIENCY
The following table sets forth the Company's consolidated earnings to fixed
charges--coverage deficiency for each of the years ended December 31, 1993,
1994, 1995, 1996, 1997 and the nine months ended September 30, 1998.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS
---------------------------- ENDED
1993 1994 1995 1996 1997 SEPTEMBER 30, 1998
---- ---- ---- ------ ------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings to fixed charges--
coverage deficiency........... N/A N/A N/A $6,442 $1,135 $2,731
</TABLE>
For purposes of calculating the amount of the earnings to fixed charges--
coverage deficiency (the difference between earnings and the amount of the
fixed charges), earnings represent losses before income taxes and fixed
charges, excluding capitalized interest. Fixed charges consist of the total of
(i) interest, whether capitalized or expensed and (ii) amortization of
deferred debt costs.
7
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be
described in the Prospectus Supplement relating to such Debt Securities.
Accordingly, for a description of the terms of a particular issue of Debt
Securities, reference must be made to both the Prospectus Supplement relating
thereto and to the following description.
The Debt Securities will be general obligations of the Company and may be
subordinated to "Senior Indebtedness" (as defined below) of the Company to the
extent set forth in the Prospectus Supplement relating thereto. See
"Description of Debt Securities--Subordination" below. Debt Securities will be
issued under an indenture (the "Indenture") between the Company and one or
more commercial banks to be selected as trustees (collectively, the
"Trustee"). A copy of the form of Indenture has been filed as an exhibit to
the Registration Statement filed with the SEC. The following discussion of
certain provisions of the Indenture is a summary only and does not purport to
be a complete description of the terms and provisions of the Indenture.
Accordingly, the following discussion is qualified in its entirety by
reference to the provisions of the Indenture, including the definition therein
of terms used below.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities that can be issued thereunder. The Debt Securities may be issued in
one or more series as may be authorized from time to time by the Company.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Debt Securities of the series with respect to which such
Prospectus Supplement is being delivered:
(a) the title of the Debt Securities of the series;
(b) any limit on the aggregate principal amount of the Debt Securities of
the series that may be authenticated and delivered under the Indenture;
(c) the date or dates on which the principal and premium with respect to
the Debt Securities of the series are payable;
(d) the rate or rates (which may be fixed or variable) at which the Debt
Securities of the series shall bear interest (if any) or the method of
determining such rate or rates, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest shall be
payable or the method by which such dates will be determined, the record
dates for the determination of holders thereof to whom such interest is
payable (in the case of Registered Securities (as defined below)), and the
basis upon which interest will be calculated if other than that of a 360-
day year of twelve 30-day months;
(e) the place or places, if any, in addition to or instead of the
corporate trust office of the Trustee (in the case of Registered
Securities) or the principal London office of the Trustee (in the case of
Bearer Securities), where the principal, premium, and interest with respect
to Debt Securities of the series shall be payable;
(f) the price or prices at which, the period or periods within which, and
the terms and conditions upon which Debt Securities of the series may be
redeemed, in whole or in part, at the option of the Company or otherwise;
(g) whether Debt Securities of the series are to be issued as Registered
Securities or Bearer Securities (as defined below) or both and, if Bearer
Securities are to be issued, whether coupons will be attached thereto,
whether Bearer Securities of the series may be exchanged for Registered
Securities of the series, and the circumstances under which and the places
at which any such exchanges, if permitted, may be made;
8
<PAGE>
(h) if any Debt Securities of the series are to be issued as Bearer
Securities or as one or more Global Securities (as defined below)
representing individual Bearer Securities of the series, whether certain
provisions for the payment of additional interest or tax redemptions shall
apply; whether interest with respect to any portion of a temporary Bearer
Security of the series payable with respect to any interest payment date
prior to the exchange of such temporary Bearer Security for definitive
Bearer Securities of the series shall be paid to any clearing organization
with respect to the portion of such temporary Bearer Security held for its
account and, in such event, the terms and conditions (including any
certification requirements) upon which any such interest payment received
by a clearing organization will be credited to the persons entitled to
interest payable on such interest payment date; and the terms upon which a
temporary Bearer Security may be exchanged for one or more definitive
Bearer Securities of the series;
(i) the obligation, if any, of the Company to redeem, purchase, or repay
Debt Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a holder thereof and the price or prices at
which, the period or periods within which, and the terms and conditions
upon which Debt Securities of the series shall be redeemed, purchased, or
repaid, in whole or in part, pursuant to such obligations;
(j) the terms, if any, upon which the Debt Securities of the series may
be convertible into or exchanged for Common Stock, Preferred Stock (which
may be represented by Depositary Shares), other Debt Securities or warrants
for Common Stock, Preferred Stock, indebtedness or other securities of any
kind of the Company or any other issuer or obligor and the terms and
conditions upon which such conversion or exchange shall be effected,
including the initial conversion or exchange price or rate, the conversion
or exchange period and any other additional provisions;
(k) if other than denominations of $1,000 or any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(l) if the amount of principal, premium or interest with respect to the
Debt Securities of the series may be determined with reference to an index
or pursuant to a formula, the manner in which such amounts will be
determined;
(m) if the principal amount payable at the stated maturity of Debt
Securities of the series will not be determinable as of any one or more
dates prior to such stated maturity, the amount that will be deemed to be
such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the stated maturity or which will be deemed to be outstanding as
of any such date (or, in any such case, the manner in which such deemed
principal amount is to be determined), and if necessary, the manner of
determining the equivalent thereof in United States currency;
(n) any changes or additions to the provisions of the Indenture dealing
with defeasance;
(o) any provision for the Offered Securities to be denominated, and
payments thereon to be made, in currencies other than the U.S. dollar
(including the Euro) or in units based on or relating to such other
currencies (including ECUs);
(p) if other than such coin or currency of the United States as at the
time of payment is legal tender for payment of public and private debts,
the coin or currency or currencies or units of two or more currencies in
which payment of the principal, premium, and interest with respect to Debt
Securities of the series shall be payable;
(q) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series that shall be payable
upon declaration of acceleration of the maturity thereof or provable in
bankruptcy;
(r) the terms, if any, of the transfer, mortgage, pledge or assignment as
security for the Debt Securities of the series of any properties, assets,
moneys, proceeds, securities or other collateral, including whether
9
<PAGE>
certain provisions of the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") are applicable and any corresponding changes to
provisions of the Indenture as then in effect;
(s) any addition to or change in the Events of Default (as defined below)
with respect to the Debt Securities of the series and any change in the
right of the Trustee or the holders to declare the principal, premium and
interest with respect to such Debt Securities due and payable;
(t) if the Debt Securities of the series shall be issued in whole or in
part in the form of a Global Security, the terms and conditions, if any,
upon which such Global Security may be exchanged in whole or in part for
other individual Debt Securities in definitive registered form, the
Depositary (as defined in the applicable Prospectus Supplement) for such
Global Security and the form of any legend or legends to be borne by any
such Global Security in addition to or in lieu of the legend referred to in
the Indenture;
(u) any Trustee, authenticating or paying agents, transfer agents or
registrars;
(v) the applicability of, and any addition to or change in, the covenants
and definitions then set forth in the Indenture or in the terms then set
forth in the Indenture relating to permitted consolidations, mergers, or
sales of assets;
(w) the terms, if any, of any guarantee of the payment of principal,
premium, and interest with respect to Debt Securities of the series and any
corresponding changes to the provisions of the Indenture as then in effect;
(x) the subordination, if any, of the Debt Securities of the series
pursuant to the Indenture and any changes or additions to the provisions of
the Indenture relating to subordination;
(y) with regard to Debt Securities of the series that do not bear
interest, the dates for certain required reports to the Trustee; and
(z) any other terms of the Debt Securities of the series (which terms
shall not be prohibited by the provisions of the Indenture).
The Prospectus Supplement will also describe any material United States
federal income tax consequences or other special considerations applicable to
the series of Debt Securities to which such Prospectus Supplement relates,
including those applicable to (a) Bearer Securities, (b) Debt Securities with
respect to which payments of principal, premium or interest are determined
with reference to an index or formula (including changes in prices of
particular securities, currencies or commodities), (c) Debt Securities with
respect to which principal, premium or interest is payable in a foreign or
composite currency, (d) Debt Securities that are issued at a discount below
their stated principal amount, bearing no interest or interest at a rate that
at the time of issuance is below market rates ("Original Issue Discount Debt
Securities") and (e) variable rate Debt Securities that are exchangeable for
fixed rate Debt Securities.
Unless otherwise provided in the applicable Prospectus Supplement,
Registered Securities may be transferred or exchanged at the office of the
Trustee at which its corporate trust business is principally administered in
the United States or at the office of the Trustee or the Trustee's agent in
the Borough of Manhattan, the City and State of New York, at which its
corporate agency business is conducted, subject to the limitations provided in
the Indenture, without the payment of any service charge, other than any tax
or governmental charge payable in connection therewith. Bearer Securities will
be transferable only by delivery. Provisions with respect to the exchange of
Bearer Securities will be described in the Prospectus Supplement relating to
such Bearer Securities.
All funds paid by the Company to a paying agent for the payment of
principal, premium or interest with respect to any Debt Securities that remain
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company, and the
holders of such Debt Securities or any coupons appertaining thereto will
thereafter look only to the Company for payment thereof.
10
<PAGE>
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities. A Global Security is a Debt Security
that represents, and is denominated in an amount equal to the aggregate
principal amount of, all outstanding Debt Securities of a series, or any
portion thereof, in either case having the same terms, including the same
original issue date, date or dates on which principal and interest are due,
and interest rate or method of determining interest. A Global Security will be
deposited with, or on behalf of, a Depositary, which will be identified in the
Prospectus Supplement relating to such Debt Securities. Global Securities may
be issued in either registered or bearer form and in either temporary or
definitive form. Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented thereby, a Global Security may not be
transferred except as a whole by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or another
nominee of the Depositary, or by the Depositary or any nominee of the
Depositary to a successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to
such Debt Securities. The Company anticipates that the following provisions
will generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Debt Securities represented by
such Global Security to the accounts of persons that have accounts with the
Depositary ("participants"). Such accounts shall be designated by the dealers
or underwriters with respect to such Debt Securities or, if such Debt
Securities are offered and sold directly by the Company or through one or more
agents, by the Company or such agents. Ownership of beneficial interests in a
Global Security will be limited to participants or persons that hold
beneficial interests through participants. Ownership of beneficial interests
in such Global Security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the Depositary (with
respect to interests of participants) or records maintained by participants
(with respect to interests of persons other than participants). The laws of
some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limitations and laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner or holder of such Global Security, such Depositary or
nominee, as the case may be, will be considered the sole owner or holder of
the individual Debt Securities represented by such Global Security for all
purposes under the Indenture. Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have any of the
individual Debt Securities represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
any of such Debt Securities in definitive form, and will not be considered the
owners or holders thereof under the Indenture.
Subject to the restrictions applicable to Bearer Securities described in an
applicable Prospectus Supplement (see Limitations on Issuance of Bearer
Securities" below), payments of principal, premium, and interest with respect
to individual Debt Securities represented by a Global Security will be made to
the Depositary or its nominee, as the case may be, as the registered owner or
holder of such Global Security. Neither the Company, the Trustee, any paying
agent or registrar for such Debt Securities or any agent of the Company or the
Trustee will have any responsibility or liability for (a) any aspect of the
records relating to or payments made by the Depositary, its nominee or any
participants on account of beneficial interests in the Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
interests, (b) the payment to the owners of beneficial interests in the Global
Security of amounts paid to the Depositary or its nominee or (c) any other
matter relating to the actions and practices of the Depositary, its nominee or
its participants. Neither the Company, the Trustee, any paying agent or
registrar for such Debt Securities or any agent of the Company or the Trustee
will be liable for any delay by the Depositary, its nominee or any of its
participants in identifying the owners of beneficial interests in the Global
Security, and the Company and the Trustee may conclusively rely on, and will
be protected in relying on, instructions from the Depositary or its nominee
for all purposes.
11
<PAGE>
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest
with respect to a definitive Global Security representing any of such Debt
Securities, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security, as shown on the records of the
Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers and registered in "street name." Such payments will be the
responsibility of such participants. Receipt by owners of beneficial interests
in a temporary Global Security of payments of principal, premium or interest
with respect thereto will be subject to the restrictions described in an
applicable Prospectus Supplement (see "Limitation on Issuance of Bearer
Securities" below).
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary, the Company shall appoint a
successor depositary. If a successor depositary is not appointed by the
Company within 90 days, the Company will issue individual Debt Securities of
such series in exchange for the Global Security representing such series of
Debt Securities. In addition, the Company may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to such Debt Securities, determine to no longer have Debt Securities
of a series represented by a Global Security and, in such event, will issue
individual Debt Securities of such series in exchange for the Global Security
representing such series of Debt Securities. Furthermore, if the Company so
specifies with respect to the Debt Securities of a series, an owner of a
beneficial interest in a Global Security representing Debt Securities of such
series may, on terms acceptable to the Company, the Trustee, and the
Depositary for such Global Security, receive individual Debt Securities of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery of individual Debt
Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name (if the Debt Securities are issuable as Registered
Securities). Individual Debt Securities of such series so issued will be
issued (a) as Registered Securities in denominations, unless otherwise
specified by the Company, of $1,000 and integral multiples thereof if the Debt
Securities are issuable as Registered Securities, (b) as Bearer Securities in
the denomination or denominations specified by the Company if the Debt
Securities are issuable as Bearer Securities or (c) as either Registered
Securities or Bearer Securities as described above if the Debt Securities are
issuable in either form.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
The Debt Securities of a series may be issued as Registered Securities
(which will be registered as to principal and interest in the register
maintained by the registrar for such Debt Securities) or Bearer Securities
(which will be transferable only be delivery). If such Debt Securities are
issuable as Bearer Securities, the applicable Prospectus Supplement will
describe certain special limitations and considerations that will apply to
such Debt Securities.
CERTAIN COVENANTS
Limitation on Secured Debt. The Indenture provides that the Company will
not, and will not permit any Restricted Subsidiary to, become liable for any
indebtedness for borrowed money secured by a mortgage or lien on a Principal
Property or on any shares of stock or indebtedness of any Restricted
Subsidiary ("Secured Debt") or secure the same without making effective
provision for securing the payment of the principal of and interest on the
Debt Securities (and, if the company so elects, any indebtedness ranking
equally with the Debt Securities) equally and ratably with or prior to such
secured indebtedness. This covenant will not apply to debt secured by (a)
mortgages or liens on property, capital stock or indebtedness of any
corporation existing at the time it becomes a subsidiary, (b) mortgages
existing on property at the time of acquisition, purchase money mortgages and
mortgages to secure indebtedness incurred within 180 days after the time of
acquisition thereof to finance
12
<PAGE>
the purchase price, (c) mortgages or liens on unimproved property to finance
the cost of improvements to such property, (d) mortgages or liens securing
indebtedness owed by a Subsidiary (as defined in the Indenture) to the Company
or a wholly owned Restricted Subsidiary, (e) certain mortgages in favor of
governmental entities including mortgages in connection with industrial
revenue financing or (f) extensions, renewals or replacements of any of the
foregoing. Notwithstanding this covenant, the Company and its Restricted
Subsidiaries may incur or guarantee any Secured Debt, provided that after
giving effect thereto the aggregate amount of such debt then outstanding (not
including Secured Debt permitted under the foregoing exceptions) and the
aggregate "value" of Sale and Leaseback Transactions (as defined below) other
than Sale and Leaseback Transactions permitted under clauses (a) through (d)
and (f) in the following paragraph, at such time does not exceed 10% of
Consolidated Net Tangible Assets (as defined below).
Limitation on Sales and Leasebacks. The Indenture provides that sales and
leasebacks of a Principal Property (as defined below) by the Company or a
Restricted Subsidiary (except those for a temporary period of not more than
three years and those from the Company or a wholly owned Restricted
Subsidiary) will be prohibited unless (a) the transaction is entered into to
finance the cost of acquiring such property or within 180 days after such
acquisition, (b) the transaction is entered into finance the cost of
improvements to such unimproved property, (c) the transaction is one of
certain types in which the lessor is a governmental entity, (d) the
transaction involves the extension, renewal or replacement of the transactions
referred to in clauses (a) through (c) above, (e) the property involved is
property that could be mortgaged without equally and ratably securing the Debt
Securities under the last sentence of the preceding paragraph or (f) an amount
equal to the proceeds of sale or the fair value of the property sold
(whichever is higher) is applied to the retirement of funded debt of the
Company.
A Prospectus Supplement may provide that additional covenants will be
applicable to the Company with respect to the Debt Securities of a series. In
addition, a Prospectus Supplement may provide that a series of Debt Securities
will not have the benefit of the covenants described above.
DEFINITIONS. For purposes of the events described above under Certain
Covenants" the following definitions and conventions will apply.
The term "Restricted Subsidiary" means (a) any Subsidiary other than (1) a
Subsidiary the primary business of which consists of one or more of the
following: (i) purchasing amounts receivable, (ii) making loans secured by
accounts receivable or inventories or otherwise providing credit, (iii) making
investment in real estate or providing services directly related thereto or
otherwise engaging in the business of a finance or real estate investment
company, or (iv) leasing equipment, machinery, vehicles, rolling stock and
other articles of use of the business of the Company, or (2) certain named
Subsidiaries; and (b) any Subsidiary described in Clauses (1) or (2) of
paragraph (a) above which at the time of determination shall be a Restricted
Subsidiary pursuant to designation by the Board of Directors hereinafter
provided for.
The Company may by board resolution designate any Unrestricted Subsidiary
(defined as a Subsidiary that is not a Restricted Subsidiary) to be a
Restricted Subsidiary. The Company may by board resolution designate a newly
acquired or formed Subsidiary to be an Unrestricted Subsidiary, provided such
designation takes place not later than 90 days after such acquisition or
formation.
The term "Principal Property" will mean any manufacturing or research
property, plant or facility of the Company or any Restricted Subsidiary except
any property that the Board of Directors by resolution declares is not of
material importance to the total business conducted by the Company and its
Restricted Subsidiaries as an entirety. The term "Consolidated Net Tangible
Assets" will mean at any date the total amount of assets that under generally
accepted accounting principles would be included on a consolidated balance
sheet of the Company and its Restricted Subsidiaries as of such date, less the
sum of the following items, which would then also be so included in accordance
with generally accepted accounting principles: (a) related depreciation,
amortization and other valuation reserves, (b) certain investments, less
applicable reserves in Unrestricted Subsidiaries, (c) all treasury stock,
goodwill, trade names, trademarks, patents, unamortized debt discount and
13
<PAGE>
expense and other like intangibles and (d) all liabilities and liability in
terms of the Company and its Restricted Subsidiaries (including minority
interests in Restricted Subsidiaries held by persons other than the Company or
wholly owned Restricted Subsidiaries) except (i) the reserves deducted as
described in clauses (a) and (b) above, (ii) funded debt, (iii) provisions for
deferred income taxes and (iv) capital stock, surplus and surplus reserves.
A Prospectus Supplement may modify or add to the foregoing covenants. In
addition, a Prospectus Supplement may omit some or all of the foregoing
covenants and/or definitions (thereby evidencing the decision by the Company
to not be bound by such covenants and/or definitions).
SUBORDINATION
Debt Securities of a series may be subordinated ("Subordinated Debt
Securities") to Senior Indebtedness (as defined in the applicable Prospectus
Supplement) to the extent set forth in the Prospectus Supplement relating
thereto. The Company conducts substantially all its operations through
subsidiaries, and the holders of Debt Securities (whether or not Subordinated
Debt Securities) will be structurally subordinated to the creditors of the
Company's subsidiaries.
Upon any payment or distribution of assets of the Company to creditors or
upon a total or partial liquidation or dissolution of the Company or in a
bankruptcy, receivership, or similar proceeding relating to the Company or its
property, holders of Senior Indebtedness shall be entitled to receive payment
in full in cash of the Senior Indebtedness before holders of Subordinated Debt
Securities shall be entitled to receive any payment of principal, premium, or
interest with respect to the Subordinated Debt Securities, and until the
Senior Indebtedness is paid in full, any distribution to which holders of
Subordinated Debt Securities would otherwise be entitled shall be made to the
holders of Senior Indebtedness (except that such holders may receive shares of
stock and any debt securities that are subordinated to Senior Indebtedness to
at least the same extent as the Subordinated Debt Securities).
The Company may not make any payments of principal, premium, or interest
with respect to Subordinated Debt Securities, make any deposit for the purpose
of defeasance of such Subordinated Debt Securities, or repurchase, redeem, or
otherwise retire (except, in the case of Subordinated Debt Securities that
provide for a mandatory sinking fund, by the delivery of Subordinated Debt
Securities by the Company to the Trustee in satisfaction of the Company's
sinking fund obligation) any Subordinated Debt Securities if (a) any
principal, premium or interest with respect to Senior Indebtedness is not paid
in full in cash within any applicable grace period (including at maturity) or
(b) any other default on Senior Indebtedness occurs and the maturity of such
Senior Indebtedness is accelerated in accordance with its terms, unless, in
either case, the default has been cured or waived and such acceleration has
been rescinded, such Senior Indebtedness has been paid in full in cash or the
Company and the Trustee receive written notice approving such payment from the
representatives of such Senior Indebtedness. During the continuance of any
default (other than a default described in clause (a) or (b) above) with
respect to any Designated Senior Indebtedness (as defined in the applicable
Prospectus Supplement) pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable
grace periods, the Company may not pay the Subordinated Debt Securities for a
period (the "Payment Blockage Period") commencing on the receipt by the
Company and the Trustee of written notice of such default from the
representative of any Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period (a "Blockage Notice"). The Payment Blockage
Period may be terminated before its expiration by written notice to the
Trustee and the Company from the person who gave the Blockage Notice, by
repayment in full in cash of the Senior Indebtedness with respect to which the
Blockage Notice was given or because the default giving rise to the Payment
Blockage Period is no longer continuing. Unless the holders of such Designated
Senior Indebtedness shall have accelerated the maturity thereof, the Company
may resume payments on the Subordinated Debt Securities after the expiration
of the Payment Blockage Period. Not more than one Blockage Notice may be given
in any period of 360 consecutive days. In no event, however, may the total
number of days during which any Payment Blockage Period or Periods is in
effect exceed 179 days in the aggregate during any period of 360 consecutive
days. After all Senior Indebtedness is paid in full and until the Subordinated
Debt Securities are paid in full, holders of the Subordinated Debt Securities
shall be subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness.
14
<PAGE>
By reason of such subordination, in the event of insolvency, creditors of
the Company who are holders of Senior Indebtedness, as well as certain general
creditors of the Company, may recover more, ratably, than the holders of the
Subordinated Debt Securities.
EVENTS OF DEFAULT AND REMEDIES
The following events are defined in the Indenture as "Events of Default"
with respect to a series of Debt Securities:
(a) default in the payment of any installment of interest on any Debt
Securities of that series or any payment with respect to the related
coupons, if any, as and when the same shall become due and payable (whether
or not, in the case of Subordinated Debt Securities, such payment shall be
prohibited by reason of the subordination provisions described above) and
continuance of such default for a period of 30 days;
(b) default in the payment of principal or premium with respect to any
Debt Securities of that series as and when the same shall become due and
payable, whether at maturity, upon redemption, by declaration, upon
required repurchase, or otherwise (whether or not, in the case of
Subordinated Debt Securities, such payment shall be prohibited by reason of
the subordination provisions described above);
(c) default in the payment of any sinking fund payment with respect to
any Debt Securities of that series as and when the same shall become due
and payable;
(d) failure on the part of the Company to comply with the provisions of
the Indenture relating to consolidations, mergers, and sales of assets;
(e) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Debt
Securities of that series, in any resolution of the Board of Directors of
the Company authorizing the issuance of that series of Debt Securities, in
the Indenture with respect to such series, or in any supplemental Indenture
with respect to such series (other than a covenant a default in the
performance of which is otherwise specifically dealt with) continuing for a
period of 60 days after the date on which written notice specifying such
failure and requiring the Company to remedy the same shall have been given
to the Company by the Trustee or to the Company and the Trustee by the
holders of at least 25% in aggregate principal amount of the Debt
Securities of that series at the time outstanding;
(f) indebtedness of the Company or any subsidiary of the Company is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default, the total amount
of such Indebtedness unpaid or accelerated exceeds $20 million or the
United States dollar equivalent thereof at the time, and such default
remains uncured or such acceleration is not rescinded for 10 days after the
date on which written notice specifying such failure and requiring the
Company to remedy the same shall have been given to the Company by the
Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Debt Securities of that series at the
time outstanding;
(g) the Company or any of its "Significant Subsidiaries" (defined as any
subsidiary of the Company that would be a "significant subsidiary" as
defined in Rule 405 under the Securities Act as in effect on the date of
the Indenture) shall (1) voluntarily commence any proceeding or file any
petition seeking relief under the United States Bankruptcy Code or other
federal, state or foreign bankruptcy, insolvency or similar law, (2)
consent to the institution of, or fail to controvert within the time and in
the manner prescribed by law, any such proceeding or the filing of any such
petition, (3) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Company or any
such Significant Subsidiary or for a substantial part of its property, (4)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (5) make a general assignment for the
benefit of creditors, (6) admit in writing its inability or fail generally
to pay its debts as they become due, (7) take corporate action for the
purpose of effecting any of the foregoing or (8) take any comparable action
under any foreign laws relating to insolvency;
15
<PAGE>
(h) the entry of an order or decree by a court having competent
jurisdiction for (1) relief with respect to the Company or any of its
Significant Subsidiaries or a substantial part of any of their property
under the United States Bankruptcy Code or any other federal, state or
foreign bankruptcy, insolvency or similar law, (2) the appointment of a
receiver, trustee, custodian, sequestrator or similar official for the
Company or any such Significant Subsidiary or for a substantial part of any
of their property (except any decree or order appointing such official of
any Significant Subsidiary pursuant to a plan under which the assets and
operations of such Significant Subsidiary are transferred to or combined
with another Significant Subsidiary or Subsidiaries of the Company or to
the Company) or (3) the winding-up or liquidation of the Company or any
such Significant Subsidiary (except any decree or order approving or
ordering the winding-up or liquidation of the affairs of a Significant
Subsidiary pursuant to a plan under which the assets and operations of such
Significant Subsidiary are transferred to or combined with another
Significant Subsidiary or Subsidiaries of the Company or to the Company),
and such order or decree shall continue unstayed and in effect for 60
consecutive days, or any similar relief is granted under any foreign laws
and the order or decree stays in effect for 60 consecutive days;
(i) any judgment or decree for the payment of money in excess of $20
million or the United States dollar equivalent thereof at the time is
entered against the Company or any Significant Subsidiary of the Company by
a court of competent jurisdiction, which judgment is not covered by
insurance, and is not discharged and either (1) an enforcement proceeding
has been commenced by any creditor upon such judgment or decree or (2)
there is a period of 60 days following the entry of such judgment or decree
during which such judgment or decree is not discharged or waived or the
execution thereof stayed and, in either case, such default continues for 10
days after the date on which written notice specifying such failure and
requiring the Company to remedy the same shall have been given to the
Company by the Trustee or to the Company and the Trustee by the holders of
at least 25% in aggregate principal amount of the Debt Securities of that
series at the time outstanding; and
(j) any other Event of Default provided with respect to Debt Securities
of that series.
An Event of Default with respect to one series of Debt Securities is not
necessarily an Event of Default for another series.
A Prospectus Supplement may omit, modify or add to the foregoing Events of
Default.
If an Event of Default described in clause (a), (b), (c), (d), (e), (f), (i)
or (j) above occurs and is continuing with respect to any series of Debt
Securities, unless the principal and interest with respect to all the Debt
Securities of such series shall have already become due and payable, either
the Trustee or the holders not less than 25% in aggregate principal amount of
the Debt Securities of such series then outstanding may declare the principal
amount (or, if Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in such series) of and interest on all
the Debt Securities of such series due and payable immediately. If an Event of
Default described in clause (g) or (h) above occurs, unless the principal and
interest with respect to all the Debt Securities of all series shall have
become due and payable, the principal amount (or, if any series are Original
Issue Discount Debt Securities, such portion of the principal amount as may be
specified in such series) of and interest on all Debt Securities of all series
then outstanding shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any holder of Debt
Securities.
If an Event of Default occurs and is continuing, the Trustee shall be
entitled and empowered to institute any action or proceeding for the
collection of the sums so due and unpaid or to enforce the performance of any
provision of the Debt Securities of the affected series or the Indenture, to
prosecute any such action or proceeding to judgment or final decree, and to
enforce any such judgment or final decree against the Company or any other
obligor on the Debt Securities of such series. In addition, if there shall be
pending proceedings for the bankruptcy or reorganization of the Company or any
other obligor on the Debt Securities, or if a receiver, trustee, or similar
official shall have been appointed for its property, the Trustee shall be
entitled and empowered to file and prove a claim for the whole amount of
principal, premium, and interest (or, in the case of Original Issue Discount
Debt
16
<PAGE>
Securities, such portion of the principal amount as may be specified in the
terms of such series) owing and unpaid with respect to the Debt Securities. No
holder of any Debt Security or coupon of any series shall have any right to
institute any action or proceeding upon or under or with respect to the
Indenture, for the appointment of a receiver or trustee, or for any other
remedy, unless (a) such holder previously shall have given to the Trustee
written notice of an Event of Default with respect to Debt Securities of that
series and of the continuance thereof, (b) the holders of not less than 25% in
aggregate principal amount of the outstanding Debt Securities of that series
shall have made written request to the Trustee to institute such action or
proceeding with respect to such Event of Default and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and (c) the
Trustee, for 60 days after its receipt of such notice, request, and offer of
indemnity shall have failed to institute such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to the provisions of the Indenture.
Prior to the acceleration of the maturity of the Debt Securities of any
series, the holders of a majority in aggregate principal amount of the Debt
Securities of that series at the time outstanding may, on behalf of the
holders of all Debt Securities and any related coupons of that series, waive
any past default or Event of Default and its consequences for that series,
except (a) a default in the payment of the principal, premium, or interest
with respect to such Debt Securities or (b) a default with respect to a
provision of the Indenture that cannot be amended without the consent of each
holder affected thereby. In case of any such waiver, such default shall cease
to exist, any Event of Default arising therefrom shall be deemed to have been
cured for all purposes, and the Company, the Trustee and the holders of the
Debt Securities of that series shall be restored to their former positions and
rights under the Indenture.
The Trustee shall, within 90 days after the occurrence of a default known to
it with respect to a series of Debt Securities, give to the holders of the
Debt Securities of such series notice of all uncured defaults with respect to
such series known to it, unless such defaults shall have been cured or waived
before the giving of such notice; provided, however, that except in the case
of default in the payment of principal, premium, or interest with respect to
the Debt Securities of such series or in the making of any sinking fund
payment with respect to the Debt Securities of such series, 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 holders of such Debt
Securities.
MODIFICATION OF THE INDENTURE
The Company and the Trustee may enter into supplemental Indentures without
the consent of the Holders of Debt Securities for one or more of the following
purposes:
(a) to evidence the succession of another person to the Company pursuant
to the provisions of the Indenture relating to consolidations, mergers and
sales of assets and the assumption by such successor of the covenants,
agreements and obligations of the Company in the Indenture and in the Debt
Securities;
(b) to surrender any right or power conferred upon the Company by the
Indenture, to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the holders of
all or any series of Debt Securities as the Board of Directors of the
Company shall consider to be for the protection of the holders of such Debt
Securities, and to make the occurrence, or the occurrence and continuance,
of a default in any of such additional covenants, restrictions, conditions
or provisions a default or an Event of Default under the Indenture
(provided, however, that with respect to any such additional covenant,
restriction, condition or provision, such supplemental Indenture may
provide for a period of grace after default, which may be shorter or longer
than that allowed in the case of other defaults, may provide for an
immediate enforcement upon such default, may limit the remedies available
to the Trustee upon such default or may limit the right of holders of a
majority in aggregate principal amount of any or all series of Debt
Securities to waive such default);
17
<PAGE>
(c) to cure any ambiguity or to correct or supplement any provision
contained in the Indenture, in any supplemental Indenture or in any Debt
Securities that may be defective or inconsistent with any other provision
contained therein, to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee, or to make such other provisions in regard
to matters or questions arising under the Indenture as shall not adversely
affect the interests of any holders of Debt Securities of any series;
(d) to modify or amend the Indenture in such a manner as to permit the
qualification of the Indenture or any supplemental Indenture under the
Trust Indenture Act as then in effect;
(e) to add to or change any of the provisions of the Indenture to provide
that Bearer Securities may be registerable as to principal, to change or
eliminate any restrictions on the payment of principal or premium with
respect to Registered Securities or of principal, premium or interest with
respect to Bearer Securities, or to permit Registered Securities to be
exchanged for Bearer Securities, so long as any such action does not
adversely affect the interests of the holders of Debt Securities or any
coupons of any series in any material respect or permit or facilitate the
issuance of Debt Securities of any series in uncertificated form;
(f) to comply with the provisions of the Indenture relating to
consolidations, mergers and sales of assets;
(g) in the case of Subordinated Debt Securities, to make any change in
the provisions of the Indenture relating to subordination that would limit
or terminate the benefits available to any holder of Senior Indebtedness
under such provisions (but only if each such holder of Senior Indebtedness
consents to such change);
(h) to add guarantees with respect to the Debt Securities or to secure
the Debt Securities;
(i) to make any change that does not adversely affect the rights of any
holder;
(j) to add to change, or eliminate any of the provisions of the Indenture
with respect to one or more series of Debt Securities, so long as any such
addition, change or elimination not otherwise permitted under the Indenture
shall (1) neither apply to any Debt Security of any series created prior to
the execution of such supplemental Indenture and entitled to the benefit of
such provision nor modify the rights of the holders of any such Debt
Security with respect to such provision or (2) become effective only when
there is no such Debt Security outstanding;
(k) to evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to the Debt Securities of one or
more series and to add to or change any of the provisions of the Indenture
as shall be necessary to provide for or facilitate the administration of
the Indenture by more than one Trustee; and
(l) to establish the form or terms of Debt Securities and coupons of any
series, as described under "Description of Debt Securities--General" above.
With the consent of the holders of a majority in aggregate principal amount
of the outstanding Debt Securities of each series affected thereby, the
Company and the Trustee may from time to time and at any time enter into a
supplemental Indenture for the purpose of adding any provisions to, changing
in any manner or eliminating any of the provisions of the Indenture or of any
supplemental Indenture or modifying in any manner the rights of the holder of
the Debt Securities of such series; provided, however, that without the
consent of the holders of each Debt Security so affected, no such supplemental
Indenture shall (a) reduce the percentage in principal amount of Debt
Securities of any series whose holders must consent to an amendment, (b)
reduce the rate of or extend the time for payment of interest on any Debt
Security or coupon or reduce the amount of any payment to be made with respect
to any coupon, (c) reduce the principal of or extend the stated maturity of
any Debt Security, (d) reduce the premium payable upon the redemption of any
Debt Security or change the time at which any Debt Security may or shall be
redeemed, (e) make any Debt Security payable in a currency other than that
stated in the Debt Security, (f) in the case of any Subordinated Debt Security
or coupons appertaining thereto, make any change in the provisions of the
Indenture relating to subordination that adversely affects the
18
<PAGE>
rights of any holder under such provisions, (g) release any security that may
have been granted with respect to the Debt Securities, (h) make any change in
the provisions of the Indenture relating to waivers of defaults or amendments
that require unanimous consent, (i) change any obligation of the Company
provided for in the Indenture to pay additional interest with respect to
Bearer Securities or (j) limit the obligation of the Company to maintain a
paying agency outside the United States for payment on Bearer Securities or
limit the obligation of the Company to redeem certain Bearer Securities.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Company may not consolidate with or merge with or into any person, or
convey, transfer or lease all or substantially all of its assets, unless the
following conditions have been satisfied:
(a) either (1) the Company shall be the continuing person in the case of
a merger or (2) the resulting, surviving, or transferee person, if other
than the Company (the "Successor Company"), shall be a corporation
organized and existing under the laws of the United States, any State
thereof, or the District of Columbia and shall expressly assume all of the
obligations of the Company under the Debt Securities and coupons and the
Indenture;
(b) immediately after giving effect to such transaction (and treating any
indebtedness that becomes an obligation of the Successor Company or any
subsidiary of the Company as a result of such transaction as having been
incurred by the Successor Company or such subsidiary at the time of such
transaction), no Default or Event of Default would occur or be continuing;
(c) the Successor Company waives any right to redeem any Bearer Security
under circumstances in which the Successor Company would be entitled to
redeem such Bearer Security but the Company would not have been so entitled
to redeem if the consolidation, merger, conveyance, transfer or lease had
not occurred; and
(d) the Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that such
consolidation, merger or transfer complies with the Indenture.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture shall generally cease to be of any further effect with respect
to a series of Debt Securities if (a) the Company has delivered to the Trustee
for cancelation all Debt Securities of such series (with certain limited
exceptions) or (b) all Debt Securities and coupons of such series not
theretofore delivered to the Trustee for cancelation shall have become due and
payable, or are by their terms to become due and payable within one year or
are to be called for redemption within one year, and the Company shall have
deposited with the Trustee as trust funds the entire amount sufficient to pay
at maturity or upon redemption all such Debt Securities and coupons (and if,
in either case, the Company shall also pay or cause to be paid all other sums
payable under the Indenture by the Company).
In addition, the Company shall have a "legal defeasance option" (pursuant to
which it may terminate, with respect to the Debt Securities of a particular
series, all of its obligations under such Debt Securities and the Indenture
with respect to such Debt Securities) and a "covenant defeasance option"
(pursuant to which it may terminate, with respect to the Debt Securities of a
particular series, its obligations with respect to such Debt Securities under
certain specified covenants contained in the Indenture). If the Company
exercises its legal defeasance option with respect to a series of Debt
Securities, payment of such Debt Securities may not be accelerated because of
an Event of Default. If the Company exercises its covenant defeasance option
with respect to a series of Debt Securities, payment of such Debt Securities
may not be accelerated because of an Event of Default related to the specified
covenants.
The applicable Prospectus Supplement will describe the procedures the
Company must follow in order to exercise its defeasance options.
19
<PAGE>
THE TRUSTEE
The Company may appoint a separate Trustee for any series of Debt
Securities. As used herein in the description of a series of Debt Securities,
the term "Trustee" refers to the Trustee appointed with respect to such series
of Debt Securities.
The Company may maintain banking and other commercial relationships with the
Trustee and its affiliates in the ordinary course of business, and the Trustee
may own Debt Securities.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The following summary of certain provisions of the Company's capital stock
does not purport to be complete and is subject to, and qualified in its
entirety by, the provisions of the Company's Certificate of Incorporation (the
"Certificate of Incorporation"), which is included as an exhibit to the
Registration Statement of which this Prospectus is a part, and by the
provisions of applicable law.
COMMON STOCK
The Company's Certificate of Incorporation authorizes the issuance of up to
30,000,000 shares of Common Stock, $.01 par value per share. Holders of Common
Stock are entitled to one vote for each share held on all matters submitted to
a vote of stockholders and do not have cumulative voting rights. Accordingly,
holders of a majority of the shares of Common Stock entitled to vote in any
election of directors may elect all of the directors standing for election.
Holders of Common Stock are entitled to receive ratably such dividends, if
any, as may be declared by the Board of Directors out of funds legally
available therefor, subject to any preferential dividend rights of outstanding
Preferred Stock. Upon the liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to receive ratably the net
assets of the Company available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding Preferred
Stock. Holders of Common Stock have no preemption, subscription, redemption or
conversion rights. The outstanding shares of Common Stock are fully paid and
nonassessable. The rights, preferences and privileges of holders of Common
Stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of Preferred Stock which the Company may
designate and issue in the future.
The outstanding shares of Common Stock are listed on the NASDAQ and trade
under the symbol "CHRX."
The transfer agent and registrar for the Common Stock is Boston EquiServe
L.P., an affiliate of The First National Bank of Boston.
PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which a
Prospectus Supplement may relate. Specific terms of any series of Preferred
Stock offered by a Prospectus Supplement will be described in the Prospectus
Supplement relating to such series. The description set forth below is subject
to and qualified in its entirety by reference to the certificate of
designations establishing a particular series of Preferred Stock, which will
be filed with the SEC in connection with the offering of such series.
The Certificate of Incorporation authorizes the issuance of up to 4,000,000
shares of Preferred Stock, $.01 par value per share. Under the terms of the
Certificate of Incorporation, the Board of Directors is authorized, subject to
any limitations prescribed by law, without stockholder approval, to issue such
shares of Preferred Stock in one or more series. Each such series of Preferred
Stock shall have such rights, preferences, privileges and restrictions,
including voting rights, dividend rights, conversion rights, redemption
privileges and liquidation
20
<PAGE>
preferences, as shall be determined by the Board of Directors. Accordingly,
the Board of Directors, without stockholder approval, may issue undesignated
stock with terms that could adversely affect the voting power and other rights
of holders of Common Stock.
The existence of undesignated preferred stock may have the effect of
discouraging attempts to acquire control of the Company with a view to
effecting a merger, sale or exchange of assets or a similar transaction. The
anti-takeover effects of the undesignated shares may deny stockholders the
opportunity to receive a premium on their stock and may also have a depressive
effect on the market price of the Common Stock.
The transfer agent, registrar, and dividend disbursement agent for a series
of Preferred Stock will be selected by the Company and will be described in
the applicable Prospectus Supplement. The registrar for shares of Preferred
Stock will send notices to stockholders of any meetings at which holders of
the Preferred Stock have the right to elect directors of the Company or to
vote on any other matter.
RIGHTS PLAN
Rights
The Board of Directors of the Company, pursuant to a stockholders rights
plan (the "Rights Plan") has declared a dividend of one right (the "Rights")
for each outstanding share of Common Stock. The Rights were issued to the
holders of record of Common Stock outstanding on the Rights issuance date, and
with respect to Common Stock issued thereafter until the Distribution Date (as
defined below), and, in certain circumstances, with respect to Common Stock
issued after the Distribution Date. Each Right, when it becomes exercisable as
described below, will entitle the registered holder to purchase from the
Company one one-thousandth (1/1000th) of a share of Preferred Stock (the
"Preferred Shares") at a price of $50 per (1/1000th) of a share, subject to
adjustment in certain circumstances (the "Purchase Price"). The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and the Rights Agent named therein. The Rights
will not be exercisable until the Distribution Date and will expire on the
tenth annual anniversary of the Rights Agreement (the "Expiration Date"),
unless earlier redeemed by the Company. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends with
respect to the Rights of the Preferred Shares relating thereto.
Distribution Date
Under the Rights Agreement, the Distribution Date is the earlier of (i) such
time as the Company learns that a person or group (including any affiliate or
associate of such person or group) has acquired, or has obtained the right to
acquire, beneficial ownership of more than 15% of the outstanding shares of
Common Stock (such person or group being an "Acquiring Person"), unless
provisions preventing accidental triggering of the distribution of the Rights
apply, and (ii) the close of business on such date, if any, as may be
designated by the Board of Directors following the commencement of, or first
public disclosure of an intent to commence, a tender or exchange offer for
more than 15% or more of the outstanding shares of Common Stock.
Triggering Event and Effect of Triggering Event
At such time as there is an Acquiring Person, the Rights will entitle each
holder (other than such Acquiring Person) of a Right to purchase, for the
Purchase Price, that number of one one-thousandths (1/1000ths) of a Preferred
Share equivalent to the number of shares of Common Stock which at the time of
such event would have a market value of twice the Purchase Price.
In the event the Company is acquired in a merger or other business
combination by an Acquiring Person or an affiliate or associate of an
Acquiring Person that is a publicly traded corporation or 50% or more of the
Company's assets or assets representing 50% or more of the Company's revenues
or cash flow are sold, leased, exchanged or otherwise transferred (in one or
more transactions) to an Acquiring Person or an affiliate or
21
<PAGE>
associate of an Acquiring Person, each Right will entitle its holder (other
than Rights beneficially owned by such Acquiring Person or its affiliates or
associates) to purchase, for the Purchase Price, that number of common shares
of such corporation (or, if such corporation is not a publicly traded
corporation, that number of common shares of an affiliate of such corporation
that has publicly traded shares) which at the time of the transaction would
have a market value or, in certain circumstances, book value of twice the
Purchase Price.
Redemption
At any time prior to the earlier of (i) such time as a person or group
becomes an Acquiring Person and (ii) the Expiration Date, the Board of
Directors may redeem the Rights in whole, but not in part, at a price (in cash
or Common Stock or other securities of the Company deemed by the Board of
Directors to be at least equivalent in value) of $.10 per Right (which amount
shall be subject to adjustment as provided in the Rights Agreement) (the
"Redemption Price"). Immediately upon the action of the Board of Directors
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right of the holders of Rights will be to receive the Redemption Price.
In addition, at any time after there is an Acquiring Person, the Board of
Directors may elect to exchange each Right for consideration per Right
consisting of one-half of the securities that would be issuable at such time
upon exercise of one Right pursuant to the terms of the Rights Agreement.
Amendment
At any time prior to the Distribution Date, the Company may, without the
approval of any holder of any Rights, supplement or amend any provision of the
Rights Agreement (including, without limitation, the date on which the
Distribution Date shall occur, the definition of Acquiring Person, the time
during which the Rights may be redeemed or the terms of the Preferred Shares),
except that no supplement or amendment shall be made which reduces the
Redemption Price (other than pursuant to certain adjustments therein) or
provides for an earlier Expiration Date.
Certain Effects of the Rights Plan
The Rights Plan is designed to protect stockholders of the Company in the
event of unsolicited offers to acquire the Company and other coercive takeover
tactics which, in the opinion of the Board of Directors, could impair its
ability to represent stockholder interests. The provisions of the Rights Plan
may render an unsolicited takeover of the Company more difficult or less
likely to occur or might prevent such a takeover, even though such takeover
may offer the Company's stockholders the opportunity to sell their stock at a
price above the prevailing market rate and may be favored by a majority of the
stockholders of the Company.
DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS
The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. A "business combination"
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. Subject to certain exceptions, an
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years did own, 15% or more of the
corporation's voting stock.
The Company's Amended and Restated By-Laws (the "Amended and Restated By-
Laws") provide for the division of the Board of Directors into three classes
as nearly equal in size as possible with staggered three-year terms. In
addition, the Amended and Restated By-Laws provide that directors may be
removed only for cause by the affirmative vote of the holders of two-thirds of
the shares of capital stock of the corporation entitled to vote. Under the
Company's Amended and Restated By-Laws, any vacancy on the Board of Directors,
however
22
<PAGE>
occurring, including a vacancy resulting from an enlargement of the Board, may
be filled only by vote of a majority of the directors then in office. The
classification of the Board of Directors and the limitations on the removal of
directors and filling of vacancies could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
acquiring, control of the Company.
The Company's Amended and Restated By-Laws also provide that any action
required or permitted to be taken by the stockholders of the Company at an
annual meeting or special meeting of stockholders may be taken only if it is
properly brought before such meeting and may not be taken by written action in
lieu of a meeting. For business to be properly brought before an annual
meeting by a stockholder, the stockholder must give written notice thereof to
the Secretary of the Company, subject to certain exceptions, not less than 70
days nor more than 90 days prior to the anniversary date of the previous
annual meeting. In addition, the Amended and Restated By-Laws provide that the
Company need not present a stockholder proposal which was otherwise submitted
properly, if such stockholder or its representative does not appear to present
such proposal at the annual meeting. The Amended and Restated By-Laws further
provide that special meetings of the stockholders may only be called by the
Chairman of the Board of Directors, the Chief Executive Officer or the
President of the Company or by the Board of Directors. Under the Company's
Amended and Restated By-Laws, in order for any matter to be considered
"properly brought" before a meeting, a stockholder must comply with certain
other requirements regarding notice to the Company. The foregoing provisions
could have the effect of delaying until the next stockholders meeting
stockholder actions which are favored by the holders of a majority of the
outstanding voting securities of the Company. These provisions may also
discourage another person or entity from making a tender offer for the Common
Stock, because such person or entity, even if acquired a majority of the
outstanding voting securities of the Company, would be able to take action as
a stockholder (such as electing new directors or approving a merger) only at a
duly called stockholders meeting, and not by written consent.
The General Corporation Law of Delaware provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's Certificate of Incorporation or By-Laws,
unless a corporation's Certificate of Incorporation or By-Laws, as the case
may be, requires a greater percentage. The Company's Amended and Restated By-
Laws require the affirmative vote of the holders of at least 75% of the shares
of capital stock of the Company issued and outstanding and entitled to vote to
amend or repeal any of the provisions described in the prior two paragraphs.
The Company's Certificate of Incorporation contains certain provisions
permitted under the General Corporation Law of Delaware relating to the
liability of directors. These provisions eliminate a director's liability for
monetary damages for a breach of fiduciary duty, except in certain
circumstances involving wrongful acts, such as the breach of a director's duty
of loyalty or acts or omissions which involve intentional misconduct or a
knowing violation of law. Further, the Company's Certificate of Incorporation
contains provisions to indemnify the Company's directors and officers to the
fullest extent permitted by the General Corporation Law of Delaware. The
Company believes that these provisions will assist the Company in attracting
and retaining qualified individuals to serve as directors.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares (as defined below) and Depositary Receipts (as defined below) does not
purport to be complete and is subject to and qualified in its entirety by
reference to the forms of Deposit Agreement and Depositary Receipts relating
to each series of Preferred Stock that will be filed with the SEC in
connection with the offering of such series of Preferred Stock.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
depositary to the public of receipts for depositary shares ("Depositary
Shares"), each of which will represent
23
<PAGE>
fractional interests of a particular series of Preferred Stock (which will be
set forth in the Prospectus Supplement relating to a particular series of
Preferred Stock).
The shares of any series of Preferred Stock underlying the Depositary Shares
will be deposited under a separate Deposit Agreement (the "Deposit Agreement")
between the Company and a bank or trust company selected by the Company having
its principal office in the United States and having a combined capital and
surplus of at least $50 million. The Prospectus Supplement relating to a
series of Depositary Shares will set forth the name and address of the
depositary with respect to such Depositary Shares. Subject to the terms of the
Deposit Agreement, each owner of Depositary Shares will be entitled, in
proportion to the applicable fractional interests in shares of Preferred Stock
underlying such Depositary Shares, to all the rights and preferences of the
Preferred Stock underlying such Depositary Shares (including dividend, voting,
redemption, conversion, and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional
interests in shares of the related series of Preferred Stock in accordance
with the terms of the offering described in the related Prospectus Supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received with respect to Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction
of one cent, and the balance not so distributed shall be added to and treated
as part of the next sum received by the depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the depositary determines that it is not feasible to
make such distribution, in which case the depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to the holders of Depositary
Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the depositary resulting from the redemption, in whole or
in part, of such series of the Preferred Stock held by the depositary. The
depositary shall mail notice of redemption not less than 30 and not more than
60 days prior to the date fixed for redemption to the record holders of the
Depositary Shares to be so redeemed at their respective addresses appearing in
the depositary's books. The redemption price per Depositary Share will be
equal to the applicable fraction of the redemption price per share payable
with respect to such series of the Preferred Stock. Whenever the Company
redeems shares of Preferred Stock held by the depositary, the depositary will
redeem as of the same redemption date the number of Depositary Shares relating
to shares of Preferred Stock so redeemed. If less than all the Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed will be
selected by lot or pro rata as may be determined by the depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be outstanding and all rights of the holders of the
Depositary Shares will cease, except the right to receive the money,
securities, or other property payable upon such redemption and any money,
securities, or other property to which the holders of such Depositary Shares
were entitled upon such redemption upon surrender to the depositary of the
Depositary Receipts evidencing such Depositary Shares.
24
<PAGE>
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the depositary as to the
exercise of the voting rights pertaining to the number of shares of Preferred
Stock underlying such holder's Depositary Shares. The depositary will
endeavor, insofar as practicable, to vote the number of shares of Preferred
Stock underlying such Depositary Shares in accordance with such instructions,
and the Company will agree to take all action that may be deemed necessary by
the depositary in order to enable the depositary to do so.
AMENDMENT AND TERMINATION OF DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the depositary. However, any amendment that materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the depositary only if
(a) all outstanding Depositary Shares relating thereto have been redeemed or
(b) there has been a final distribution with respect to the Preferred Stock of
the relevant series in connection with any liquidation, dissolution, or
winding up of the Company and such distribution has been distributed to the
holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the depositary in connection with the initial deposit of
the Preferred Stock and any redemption of the Preferred Stock. Holders of
Depositary Shares will pay transfer and other taxes and governmental charges
and such other charges as are expressly provided in the Deposit Agreement to
be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the depositary,
any such designation or removal to take effect upon the appointment of a
successor depositary and its acceptance of such appointment. Such successor
depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and
surplus of at least $50 million.
MISCELLANEOUS
The depositary will forward to the holders of Depositary Shares all reports
and communications from the Company that are delivered to the depositary and
that the Company is required to furnish to the holders of the Preferred Stock.
Neither the depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and
the depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding with respect to any Depositary Shares
or Preferred Stock unless satisfactory indemnity is furnished. They may rely
upon written advice of counsel or accountants, or information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Shares
or other persons believed to be competent and on documents believed to be
genuine.
25
<PAGE>
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Stock or Common Stock. Warrants may be issued independently or
together with Debt Securities, Preferred Stock or Common Stock offered by any
Prospectus Supplement and may be attached to or separate from any such Offered
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between the Company and a
bank or trust company, as warrant agent (the "Warrant Agent"). The Warrant
Agent will act solely as an agent of the Company in connection with the
Warrants and will not assume any obligation or relationship of agency or trust
for or with any holders or beneficial owners of Warrants. The following
summary of certain provisions of the Warrants does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
provisions of the Warrant Agreement that will be filed with the SEC in
connection with the offering of such Warrants.
DEBT WARRANTS
The Prospectus Supplement relating to a particular issue of Debt Warrants
will describe the terms of such Debt Warrants, including the following: (a)
the title of such Debt Warrants; (b) the offering price for such Debt
Warrants, if any; (c) the aggregate number of such Debt Warrants; (d) the
designation and terms of the Debt Securities purchasable upon exercise of such
Debt Warrants; (e) if applicable, the designation and terms of the Debt
Securities with which such Debt Warrants are issued and the number of such
Debt Warrants issued with each such Debt Security; (f) if applicable, the date
from and after which such Debt Warrants and any Debt Securities issued
therewith will be separately transferable; (g) the principal amount of Debt
Securities purchasable upon exercise of a Debt Warrant and the price at which
such principal amount of Debt Securities may be purchased upon exercise (which
price may be payable in cash, securities, or other property); (h) the date on
which the right to exercise such Debt Warrants shall commence and the date on
which such right shall expire; (i) if applicable, the minimum or maximum
amount of such Debt Warrants that may be exercised at any one time; (j)
whether the Debt Warrants represented by the Debt Warrant certificates or Debt
Securities that may be issued upon exercise of the Debt Warrants will be
issued in registered or bearer form; (k) information with respect to book-
entry procedures, if any; (1) the currency (including the Euro) or currency
units (including ECUs) in which the offering price, if any, and the exercise
price are payable; (m) if applicable, a discussion of material United States
federal income tax considerations; (n) the antidilution provisions of such
Debt Warrants, if any; (o) the redemption or call provisions, if any,
applicable to such Debt Warrants; and (p) any additional terms of such Debt
Warrants, including terms, procedures, and limitations relating to the
exchange and exercise of such Debt Warrants.
STOCK WARRANTS
The Prospectus Supplement relating to any particular issue of Preferred
Stock Warrants or Common Stock Warrants will describe the terms of such
Warrants, including the following: (a) the title of such Warrants; (b) the
offering price for such Warrants, if any; (c) the aggregate number of such
Warrants; (d) the designation and terms of the Common Stock or Preferred Stock
purchasable upon exercise of such Warrants; (e) if applicable, the designation
and terms of the Offered Securities with which such Warrants are issued and
the number of such Warrants issued with each such Offered Security; (f) if
applicable, the date from and after which such Warrants and any Offered
Securities issued therewith will be separately transferable; (g) the number of
shares of Common Stock or Preferred Stock purchasable upon exercise of a
Warrant and the price at which such shares may be purchased upon exercise; (h)
the date on which the right to exercise such Warrants shall commence and the
date on which such right shall expire; (i) if applicable, the minimum or
maximum amount of such Warrants that may be exercised at any one time; (j) the
currency (including the Euro) or currency units (including ECUs) in which the
offering price, if any, and the exercise price are payable; (k) if applicable,
a discussion of material United States federal income tax considerations; (l)
the antidilution provisions of such Warrants, if any; (m) the redemption or
call provisions, if any, applicable to such Warrants; and (n) any additional
terms of such Warrants, including terms, procedures and limitations relating
to the exchange and exercise of such Warrants.
26
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities in or outside the United States
through underwriters or dealers, directly to one or more purchasers, or
through agents. The Prospectus Supplement with respect to the Offered
Securities will set forth the terms of the offering of the Offered Securities,
including the name or names of any underwriters, dealers, or agents, the
purchase price of the Offered Securities and the proceeds, to the Company from
such sale, any delayed delivery arrangements, any underwriting discounts and
other items constituting underwriters' compensation, the initial public
offering price, any discounts or concessions allowed or reallowed or paid to
dealers, and any securities exchanges on which the Offered Securities may be
listed.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The Offered Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. The underwriter or
underwriters with respect to a particular underwritten offering of Offered
Securities will be named in the Prospectus Supplement relating to such
offering, and if an underwriting syndicate is used, the managing underwriter
or underwriters will be set forth on the cover of such Prospectus Supplement.
Unless otherwise set forth in the Prospectus Supplement relating thereto, the
obligations of the underwriters or agents to purchase the Offered Securities
will be subject to conditions precedent and the underwriters will be obligated
to purchase all the Offered Securities if any are purchased. The initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
If dealers are utilized in the sale of Offered Securities with respect to
which this Prospectus is delivered, the Company will sell such Offered
Securities to the dealers as principals. The dealers may then resell such
Offered Securities to the public at varying prices to be determined by such
dealers at the time of resale. The names of the dealers and the terms of the
transaction will be set forth in the Prospectus Supplement relating thereto.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any agent
involved in the offer or sale of the Offered Securities with respect to which
this Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its
appointment.
In connection with the sale of the Offered Securities, underwriters or
agents may receive compensation from the Company or from purchasers of Offered
Securities for whom they may act as agents in the form of discounts,
concessions, or commissions. Underwriters, agents, and dealers participating
in the distribution of the Offered Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the
Company and any profit on the resale of the Offered Securities by them may be
deemed to be underwriting discounts or commissions under the Securities Act.
Offered Securities may be sold directly by the Company to institutional
investors or others, who may be deemed to be underwriters within the meaning
of the Securities Act with respect to any resale thereof. The terms of any
such sales will be described in the Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters, or dealers to solicit offers from certain types of
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject only to those conditions set forth
in the Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
27
<PAGE>
Agents, dealers, and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that such agents, dealers, or
underwriters may be required to make with respect thereto. Agents, dealers,
and underwriters may be customers of, engage in transactions with, or perform
services for the Company in the ordinary course of business.
Some or all of the Offered Securities may be new issues of securities with
no established trading market. Any underwriters to whom Offered Securities are
sold by the Company for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of or the trading markets for any Offered
Securities.
In order to facilitate the offering of the Offered Securities, any
underwriters or agents, as the case may be, involved in the offering of such
Offered Securities may engaged in transactions that stabilize, maintain or
otherwise affect the price of the Offered Securities or any other securities
the prices of which may be used to determine payments on such Offered
Securities. Specifically, the underwriters or agents, as the case may be, may
overallot in connection with the offering, creating a short position in such
Offered Securities for their own account. In addition, to cover overallotments
or to stabilize the price of such Offered Securities or any such other
securities, the underwriters or agents, as the case may be, may bid for, and
purchase, such Offered Securities or any such other securities in the open
market. Finally, in any offering of such Offered Securities through a
syndicate of underwriters, the underwriting syndicate may reclaim selling
concessions allowed to an underwriter or a dealer for distributing such
Offered Securities in the offering if the syndicate repurchases previously
distributed Offered Securities in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Offered Securities above
independent market levels. The underwriters or agents, as the case may be, are
not required to engage in these activities, and may end any of these
activities at any time.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that such agents, dealers, or
underwriters may be required to make with respect thereto.
Certain of the underwriters, dealers or agents and their affiliates may be
customers of, engage in transactions with or perform services for the Company
in the ordinary course of business.
LEGAL OPINIONS
The validity of the Offered Securities will be passed upon for the Company
by Cravath, Swaine & Moore, New York, New York and for any underwriters by
[ ].
EXPERTS
The consolidated statements of operations, shareholders' equity and cash
flows of ChiRex Inc. for the year ended December 31, 1995 have been
incorporated by reference in this Prospectus in reliance upon the report of
PricewaterhouseCoopers LLP, independent accountants, and upon the authority of
said firm as experts in accounting and auditing.
The consolidated balance sheets of ChiRex Inc. as of December 31, 1996 and
1997 and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the two years in the period ended December
31, 1997 incorporated by reference in this Prospectus have been audited by
Arthur Andersen LLP, independent public accountants, to the extent and for the
periods indicated in their report with respect
28
<PAGE>
thereto and have been included herein in reliance upon the authority of such
firm as experts in accounting and auditing in giving such reports.
On September 5, 1996, the Company engaged Arthur Andersen LLP as its
independent accountant and dismissed PricewaterhouseCoopers LLP from such
position. The decision to change accountants was made by the Board of
Directors of the Company. During the fiscal year ended December 31, 1995 and
the subsequent interim period immediately preceding the date of this change in
accountants, the Company and each of its subsidiaries (the "Subsidiaries") had
no disagreements with PricewaterhouseCoopers LLP on any matter of accounting
principles or practices, financial statements disclosure or auditing scope or
procedure, which disagreement(s), if not resolved to the satisfaction of
PricewaterhouseCoopers LLP, would have caused PricewaterhouseCoopers LLP to
make a reference to the subject matter of the disagreement in connection with
its reports on the financial statements of the Company or any of the
Subsidiaries.
29
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than the
underwriting discounts and commissions. All amounts shown are estimates except
for the Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
SEC Registration Fee............................................ $ 27,800
Accounting Fees and Expenses.................................... 100,000
Legal Fees and Expenses......................................... 200,000
Printing, Engraving and Mailing Expenses........................ 25,000
--------
Total........................................................... $352,800
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article EIGHTH of the Registrant's Certificate of Incorporation (the
"Certificate of Incorporation") provides that no director of the Registrant
shall be personally liable for any monetary damages for any breach of
fiduciary duty as a director, except to the extent that the Delaware General
Corporation Law prohibits the elimination or limitation of liability of
directors for breach of fiduciary duty.
Article NINTH of the Certificate of Incorporation provides that a director
or officer of the Registrant (a) shall be indemnified by the Registrant
against all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement incurred in connection with any litigation or other legal
proceeding (other than an action by or in the right of the Registrant) brought
against him by virtue of his position as a director or officer of the
Registrant if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to the best interests of the Registrant, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful and (b) shall be indemnified by the
Registrant against all expenses (including attorneys' fees) and amounts paid
in settlement incurred in connection with any action by or in the right of the
Registrant brought against him by virtue of his position as a director or
officer of the Registrant if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, except that no indemnification shall be made with respect to any
matter as to which such person shall have been adjudged to be liable to the
Registrant, unless the Court of Chancery of Delaware determines that, despite
such adjudication but in view of all of the circumstances, he is entitled to
indemnification of such expenses. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice,
he is required to be indemnified by the Registrant against all expenses
(including attorneys' fees) actually and reasonably incurred in connection
therewith. In the event the Registrant does not assume the defense of an
action in accordance with the Certificate of Incorporation, expenses shall be
advanced to a director or officer at his request prior to the final
disposition of the matter, provided that he undertakes to repay the amount
advanced if it is ultimately determined that he is not entitled to
indemnification for such expenses.
Indemnification is required to be made unless the Registrant determines that
the applicable standard of conduct required for indemnification has not been
met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent
to the right of indemnification, the director, or officer must give the
Registrant notice of the action for which indemnity is sought and the
Registrant has the right to participate in such action or assume the defense
thereof.
II-1
<PAGE>
Article NINTH of the Certificate of Incorporation further provides that the
indemnification provided therein is not exclusive, and provides that in the
event that the Delaware General Corporation Law is amended to expand the
indemnification permitted to directors or officers the Registrant must
indemnify those persons to the fullest extent permitted by such law as so
amended.
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent
of the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred
in connection with an action or proceeding to which he is or is threatened to
be made a party by reason of such position, if such person shall have acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, in any criminal proceeding, if
such person had no reasonable cause to believe his conduct was unlawful;
provided, that, in the case of actions brought by or in the right of the
corporation, no indemnification shall be made with respect to any matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
Pursuant to the Underwriting Agreement, the Underwriters are obligated,
under certain circumstances, to indemnify directors and officers of the
Registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed
as Exhibits 1 hereto.
The Company has purchased a general liability insurance policy which covers
certain liabilities of directors and officers of the Company arising out of
claims based on acts or omissions in their capacities as directors and
officers.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1### Form of Underwriting Agreement.
2.1* Agreement for the Sale and Purchase of the Entire Issued Share
Capital of Sterling Organics Limited by and among Sanofi Winthrop
Limited, Crossco (157) Limited and Sanofi, dated August 10, 1995.
2.2* Contribution Agreement by and among the Registrant, SepraChem Inc.
and the shareholders of Crossco (157) Limited listed on Schedule I
attached thereto, dated February 7, 1996.
2.3* Agreement and Plan of Merger by and among the Registrant, SepraChem
Inc., Sepracor Inc., SepraChem Merger Corporation, Roger B. Pettman
and Certain Trusts Affiliated with Victor H. Wooley, dated as of
February 6, 1996, as amended.
2.4+**** Asset Purchase Agreement between ChiRex Limited, ChiRex Inc. and
Rhone-Poulenc Chimie S.A.
2.5+***** Asset Purchase Agreement between ChiRex Inc. and Glaxo Wellcome
plc.
3.1* Certificate of Incorporation of the Registrant.
3.2*** Amended and Restated By-Laws of the Registrant.
4.1* Specimen Certificate for Shares of Common Stock, $.01 par value, of
the Registrant.
4.2***** Facilities Agreement between ChiRex (Holdings) Limited and Bankers
Trust Company.
4.3***** Pledge Agreement between ChiRex Inc. and Bankers Trust Company.
4.4### Form of Indenture.
4.5### Form of Depositary Agreement.
4.6### Form of Warrant Agreement.
5#### Opinion of Cravath, Swaine & Moore with respect to the validity of
the securities being offered.
10.1* 1995 Employee Stock Purchase Plan.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.2*** 1997 Stock Incentive Plan.
10.3*** Amended and Restated 1995 Director Stock Option Plan.
10.4* Employment Agreement with Alan R. Clark.
10.5* Employment Agreement with David F. Raynor.
10.6*** Employment Agreement with John Graham Thorpe.
10.7*** Employment Agreement with John Edward Weir.
10.8*** Settlement Agreement with Robert L. Bratzler.
10.9*** Consulting Agreement with Robert L. Bratzler.
10.10*** ChiRex Pension Scheme.
10.11+*** Supply Agreement dated as of January 21, 1997 between ChiRex Inc.
and Cell Therapeutics, Inc.
10.12+*** License Agreement dated as of January 28, 1997 between ChiRex Inc.
and President and Fellows of Harvard College.
10.13* Contract Research Agreement by and between the Registrant and
Sepracor Inc. dated December 21, 1995.
10.14* Contract Manufacturing Agreement by and between the Registrant and
Sepracor Inc.
10.15* Technology Transfer and License Agreement by and between the
Registrant and Sepracor Inc., dated as of January 1, 1995, as
amended.
10.16* Corporate Services Agreement by and between the Registrant and
Sepracor Inc. dated December 21, 1995.
10.17* Supply Agreement by and between the Registrant and Sepracor Inc.
dated December 21, 1995.
10.18* Technology Development Agreement by and between SepraChem Inc. and
Sandoz Pharma Ltd., dated October 1, 1995.
10.19* License Agreement by and between Sepracor Inc. and Massachusetts
Institute of Technology, dated May 5, 1989.
10.20* License Agreement by and between Sepracor Inc. and Massachusetts
Institute of Technology, dated June 21, 1991.
10.21* License Agreement by and between Sepracor Inc. and Research
Corporation Technologies, Inc., dated March 13, 1991.
10.22* License Agreement by and between Sepracor Inc. and Research
Corporation Technologies, Inc., dated September 10, 1992.
10.23* License Agreement by and between Sepracor Inc. and Tanabe Seiyaku
Co., Ltd., dated October 30, 1990.
10.24* Toll Manufacturing Agreement by and between Sterling Organics
Limited and Rohm and Haas (UK) Limited, dated July 4, 1991.
10.25* Toll Manufacturing Agreement by and between Sterling Organics
Limited and Rohm and Haas (UK) Limited, dated August 27, 1987.
10.26* Supply Agreement by and between Sterling Organics Limited and Sanofi
S.A., dated August 10, 1995.
10.27* Supply Agreement by and between Sterling Organics Limited and Sanofi
S.A. dated August 10, 1995.
10.28* Supply Agreement by and between Sterling Organics and Sanofi S.A.,
dated August 10, 1995.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.29* Sterling/Currency LIBOR Revolving Credit Facility between Midland
Bank plc and ChiRex (Holdings) Limited, dated as of August 2,
1996.
10.30* Procedural Joint Union Agreement by and between Sterling Organics
and AEEU, dated July 7, 1975.
10.31* House Agreement by and between Sterling Organics Limited and AEEU,
dated February 1976.
10.32* Procedural Agreement by and between Sterling Organics Limited and
EESA, dated November 3, 1979.
10.33* Agreement by and between Sterling Organics Limited and ACTS, dated
July 19, 1978.
10.34* Escrow Agreement by and between the Registrant, Roger B. Pettman
and Broomes Secretarial Services Limited.
10.35* Escrow Agreement by and between Alan R. Clark, David F. Raynor,
John E. Weir, J. Graham Thorpe, Hugh F. Ford, William Riddle,
Geoff B. Loxham, C. Lyn Chapple, David A. Routledge and Broomes
Secretarial Services Limited.
10.36+***** Supply Agreement between ChiRex Inc. and Glaxo Wellcome plc.
10.37## Employment Agreement with Michael A. Griffith dated December 22,
1997.
10.38## Employment Agreement with Jon E. Tropsa dated January 1, 1998.
10.39## Employment Agreement with Beth P. Hecht dated December 22, 1997.
10.40## Scientific Advisory Board Consulting Board Agreement with Eric
Jacobsen, Ph.D. dated July 19, 1996.
12### Computation of Earnings to Fixed Charges--Deficiency Amount for
the Registrant.
13## ChiRex Inc. 1997 Annual Report.
16** Letter re Change in Certifying Accountant.
21### Subsidiaries of the Registrant.
23.1### Consent of Arthur Andersen LLP.
23.2### Consent of PricewaterhouseCoopers LLP
23.3#### Consent of Cravath, Swaine & Moore (included in Exhibit 5).
25### Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of United States Trust Company of New York,
as trustee, on Form T-1.
</TABLE>
- --------
* Incorporated by reference to the corresponding exhibits in the
Registration Statement on Form S-1 previously filed by the Registrant
(File no. 33-80831)
** Incorporated by reference to the Form 8-K previously filed by the
Registrant on September 11, 1996.
*** Incorporated by reference to the corresponding exhibits in the
Registration Statement on Form S-1 previously filed by the Registrant on
February 26, 1997 (File no. 333-22401).
**** Incorporated by reference to the Form 8-K previously filed by the
Registrant on April 11, 1997.
***** Previously filed by the Registrant on the Company's 1996 Annual Report
on Form 10-K and is incorporated by reference.
# Previously filed by the Registrant on the Company's 1996 Annual Report
on Form 10-K and is incorporated by reference.
## Previously filed by the Registrant on the Company's 1997 Annual Report
on Form 10-K and is incorporated by reference.
### Filed herewith.
#### To be filed by amendment.
+ Confidential treatment received as to certain portions.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS.
(A) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in this registration statement;
Provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) As to documents subsequently filed that are incorporated by
reference: The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934, as applicable) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(B) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions contained in the Certificate of
Incorporation and Amended and Restated By-Laws of the Registrant and the laws
of the State of Delaware, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-5
<PAGE>
(C) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
(D) The undersigned Registrant hereby undertakes that:
(1) For the purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN STAMFORD, CONNECTICUT ON DECEMBER 9, 1998.
CHIREX INC.
/s/ Michael A. Griffith
By: _________________________________
MICHAEL A. GRIFFITH, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED. EACH PERSON WHOSE SIGNATURE APPEARS BELOW HEREBY AUTHORIZES AND
APPOINTS MICHAEL A. GRIFFITH AND BETH P. HECHT, AND EACH OF THEM, EACH OF WHOM
MAY ACT WITHOUT JOINDER OF THE OTHER, AS HIS ATTORNEY-IN-FACT TO SIGN ON HIS
BEHALF INDIVIDUALLY AND IN THE CAPACITY STATED BELOW ALL AMENDMENTS AND POST-
EFFECTIVE AMENDMENTS TO THIS REGISTRATION STATEMENT AS THAT ATTORNEY-IN-FACT
MAY DEEM NECESSARY OR APPROPRIATE.
SIGNATURE TITLE DATE
/s/ Michael A. Griffith Chairman of the Board, December 9,
- ------------------------------------- Chief Executive 1998
MICHAEL A. GRIFFITH Officer, and Director
(principal executive
and financial
officer)
/s/ Dirk Detert Director December 9,
- ------------------------------------- 1998
DIRK DETERT
/s/ Eric N. Jacobsen Director December 9,
- ------------------------------------- 1998
ERIC N. JACOBSEN
/s/ W. Dieter Zander Director December 9,
- ------------------------------------- 1998
W. DIETER ZANDER
/s/ Jon E. Tropsa Vice President, December 9,
- ------------------------------------- Finance (principal 1998
JON E. TROPSA accounting officer)
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1### Form of Underwriting Agreement.
2.1* Agreement for the Sale and Purchase of the Entire Issued Share
Capital of Sterling Organics Limited by and among Sanofi Winthrop
Limited, Crossco (157) Limited and Sanofi, dated August 10, 1995.
2.2* Contribution Agreement by and among the Registrant, SepraChem Inc.
and the shareholders of Crossco (157) Limited listed on Schedule I
attached thereto, dated February 7, 1996.
2.3* Agreement and Plan of Merger by and among the Registrant, SepraChem
Inc., Sepracor Inc., SepraChem Merger Corporation, Roger B. Pettman
and Certain Trusts Affiliated with Victor H. Wooley, dated as of
February 6, 1996, as amended.
2.4+**** Asset Purchase Agreement between ChiRex Limited, ChiRex Inc. and
Rhone-Poulenc Chimie S.A.
2.5+***** Asset Purchase Agreement between ChiRex Inc. and Glaxo Wellcome
plc.
3.1* Certificate of Incorporation of the Registrant.
3.2*** Amended and Restated By-Laws of the Registrant.
4.1* Specimen Certificate for Shares of Common Stock, $.01 par value, of
the Registrant.
4.2***** Facilities Agreement between ChiRex (Holdings) Limited and Bankers
Trust Company.
4.3***** Pledge Agreement between ChiRex Inc. and Bankers Trust Company.
4.4### Form of Indenture.
4.5### Form of Depositary Agreement.
4.6### Form of Warrant Agreement.
5#### Opinion of Cravath, Swaine & Moore with respect to the validity of
the securities being offered.
10.1* 1995 Employee Stock Purchase Plan.
10.2*** 1997 Stock Incentive Plan.
10.3*** Amended and Restated 1995 Director Stock Option Plan.
10.4* Employment Agreement with Alan R. Clark.
10.5* Employment Agreement with David F. Raynor.
10.6*** Employment Agreement with John Graham Thorpe.
10.7*** Employment Agreement with John Edward Weir.
10.8*** Settlement Agreement with Robert L. Bratzler.
10.9*** Consulting Agreement with Robert L. Bratzler.
10.10*** ChiRex Pension Scheme.
10.11+*** Supply Agreement dated as of January 21, 1997 between ChiRex Inc.
and Cell Therapeutics, Inc.
10.12+*** License Agreement dated as of January 28, 1997 between ChiRex Inc.
and President and Fellows of Harvard College.
10.13* Contract Research Agreement by and between the Registrant and
Sepracor Inc. dated December 21, 1995.
10.14* Contract Manufacturing Agreement by and between the Registrant and
Sepracor Inc.
10.15* Technology Transfer and License Agreement by and between the
Registrant and Sepracor Inc., dated as of January 1, 1995, as
amended.
10.16* Corporate Services Agreement by and between the Registrant and
Sepracor Inc. dated December 21, 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.17* Supply Agreement by and between the Registrant and Sepracor Inc.
dated December 21, 1995.
10.18* Technology Development Agreement by and between SepraChem Inc. and
Sandoz Pharma Ltd., dated October 1, 1995.
10.19* License Agreement by and between Sepracor Inc. and Massachusetts
Institute of Technology, dated May 5, 1989.
10.20* License Agreement by and between Sepracor Inc. and Massachusetts
Institute of Technology, dated June 21, 1991.
10.21* License Agreement by and between Sepracor Inc. and Research
Corporation Technologies, Inc., dated March 13, 1991.
10.22* License Agreement by and between Sepracor Inc. and Research
Corporation Technologies, Inc., dated September 10, 1992.
10.23* License Agreement by and between Sepracor Inc. and Tanabe Seiyaku
Co., Ltd., dated October 30, 1990.
10.24* Toll Manufacturing Agreement by and between Sterling Organics
Limited and Rohm and Haas (UK) Limited, dated July 4, 1991.
10.25* Toll Manufacturing Agreement by and between Sterling Organics
Limited and Rohm and Haas (UK) Limited, dated August 27, 1987.
10.26* Supply Agreement by and between Sterling Organics Limited and
Sanofi S.A., dated August 10, 1995.
10.27* Supply Agreement by and between Sterling Organics Limited and
Sanofi S.A. dated August 10, 1995.
10.28* Supply Agreement by and between Sterling Organics and Sanofi S.A.,
dated August 10, 1995.
10.29* Sterling/Currency LIBOR Revolving Credit Facility between Midland
Bank plc and ChiRex (Holdings) Limited, dated as of August 2,
1996.
10.30* Procedural Joint Union Agreement by and between Sterling Organics
and AEEU, dated July 7, 1975.
10.31* House Agreement by and between Sterling Organics Limited and AEEU,
dated February 1976.
10.32* Procedural Agreement by and between Sterling Organics Limited and
EESA, dated November 3, 1979.
10.33* Agreement by and between Sterling Organics Limited and ACTS, dated
July 19, 1978.
10.34* Escrow Agreement by and between the Registrant, Roger B. Pettman
and Broomes Secretarial Services Limited.
10.35* Escrow Agreement by and between Alan R. Clark, David F. Raynor,
John E. Weir, J. Graham Thorpe, Hugh F. Ford, William Riddle,
Geoff B. Loxham, C. Lyn Chapple, David A. Routledge and Broomes
Secretarial Services Limited.
10.36+***** Supply Agreement between ChiRex Inc. and Glaxo Wellcome plc.
10.37## Employment Agreement with Michael A. Griffith dated December 22,
1997.
10.38## Employment Agreement with Jon E. Tropsa dated January 1, 1998.
10.39## Employment Agreement with Beth P. Hecht dated December 22, 1997.
10.40## Scientific Advisory Board Consulting Board Agreement with Eric
Jacobsen, Ph.D. dated July 19, 1996.
12### Computation of Earnings to Fixed Charges--Deficient Amount for the
Registrant.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
13## ChiRex Inc. 1997 Annual Report.
16** Letter re Change in Certifying Accountant.
21### Subsidiaries of the Registrant.
23.1### Consent of Arthur Andersen LLP.
23.2### Consent of PricewaterhouseCoopers LLP.
23.3#### Consent of Cravath, Swaine & Moore (included in Exhibit 5).
25### Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939 of United States Trust Company of New York, as trustee,
on Form T-1.
</TABLE>
- --------
* Incorporated by reference to the corresponding exhibits in the
Registration Statement on Form S-1 previously filed by the Registrant
(File no. 33-80831)
** Incorporated by reference to the Form 8-K previously filed by the
Registrant on September 11, 1996.
*** Incorporated by reference to the corresponding exhibits in the
Registration Statement on Form S-1 previously filed by the Registrant on
February 26, 1997 (File no. 333-22401).
**** Incorporated by reference to the Form 8-K previously filed by the
Registrant on April 11, 1997.
***** Previously filed by the Registrant on the Company's 1996 Annual Report
on Form 10-K and is incorporated by reference.
# Previously filed by the Registrant on the Company's 1996 Annual Report
on Form 10-K and is incorporated by reference.
## Previously filed by the Registrant on the Company's 1997 Annual Report
on Form 10-K and is incorporated by reference.
### Filed herewith.
#### To be filed by amendment.
+ Confidential treatment received as to certain portions.
<PAGE>
EXHIBIT 1
CHIREX INC.
DEBT SECURITIES,
PREFERRED AND COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
1. Introductory. ChiRex Inc., a Delaware corporation ("COMPANY"),
proposes to issue and sell from time to time certain of its unsecured debt
securities, preferred stock and common stock, $.01 par value ("COMMON STOCK")
registered under the registration statement referred to in Section 2(a)
("REGISTERED SECURITIES"). The Registered Securities constituting debt
securities will be issued under an indenture, dated as of [ ], 1998
("INDENTURE"), between the Company and United States Trust Company of New York,
as Trustee, in one or more series, which series may vary as to interest rates,
maturities, redemption provisions, selling prices and other terms. The
Registered Securities constituting preferred stock may be issued in one or more
series, which series may vary as to dividend rates, redemption provisions,
selling prices and other terms. Particular series or offerings of Registered
Securities will be sold pursuant to a Terms Agreement referred to in Section 3,
for resale in accordance with terms of offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "OFFERED SECURITIES". The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"UNDERWRITERS" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "REPRESENTATIVES"; provided, however, that
-------- -------
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives", as used in this Agreement (other than in Sections
2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company. The Company, as of the
date of each Terms Agreement referred to in Section 3, represents and warrants
to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-__________), including a
prospectus, relating to the Registered Securities has been filed with the
Securities and Exchange Commission ("COMMISSION") and has become effective.
Such registration statement, as amended at the time of any Terms Agreement
referred to in Section 3, is hereinafter referred to as the "REGISTRATION
STATEMENT", and the prospectus included in such Registration Statement, as
supplemented and as contemplated by Section 3 to reflect the terms of the
Offered Securities (if they are debt securities or preferred stock) and the
terms of the offering of the Offered Securities, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("RULE 424(b)")
under the Securities Act of 1933 ("ACT"), including all material
incorporated by reference therein, is hereinafter referred to as the
"PROSPECTUS". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act, the Trust Indenture Act of 1939
("TRUST INDENTURE ACT") and the rules and regulations of the Commission
("RULES AND REGULATIONS") and did not include 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, and on
the date of each Terms Agreement referred to in Section 3, the Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations, and neither of such documents will include 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, except that the foregoing does not apply to statements in or
omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification.
<PAGE>
(d) Each subsidiary of the Company has been duly incorporated and is
an existing corporation in good standing under the laws of the jurisdiction
of its incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus; and
each subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires
such qualification; all of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly issued and
is fully paid and nonassessable; and the capital stock of each subsidiary
owned by the Company, directly or through subsidiaries, is owned free from
liens, encumbrances and defects.
(e) If the Offered Securities are debt securities: The Indenture has
been duly authorized and has been duly qualified under the Trust Indenture
Act; the Offered Securities have been duly authorized; and when the Offered
Securities are delivered and paid for pursuant to the Terms Agreement on
the Closing Date (as defined below) or pursuant to Delayed Delivery
Contracts (as hereinafter defined), the Indenture will have been duly
executed and delivered, such Offered Securities will have been duly
executed, authenticated, issued and delivered and will conform to the
description thereof contained in the Prospectus and the Indenture and such
Offered Securities will constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(f) If the Offered Securities are preferred stock: The Offered
Securities have been duly authorized and, when the Offered Securities have
been delivered and paid for in accordance with the Terms Agreement on the
Closing Date, such Offered Securities will have been validly issued, fully
paid and nonassessable and will conform to the description thereof
contained in the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Offered Securities.
(g) If the Offered Securities are Common Stock: The Offered
Securities and all other outstanding shares of capital stock of the Company
have been duly authorized; all outstanding shares of capital stock of the
Company are, and, when the Offered Securities have been delivered and paid
for in accordance with the Terms Agreement on the Closing Date, such
Offered Securities will have been validly issued, fully paid and
nonassessable and will conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive rights
with respect to the Offered Securities.
(h) If the Offered Securities are convertible: When the Offered
Securities are delivered and paid for pursuant to the Terms Agreement on
the Closing Date, such Offered Securities will be convertible into Common
Stock of the Company in accordance with their terms (if the Offered
Securities are preferred stock) or the Indenture (if the Offered Securities
are debt securities); the shares of Common Stock initially issuable upon
conversion of such Offered Securities have been duly authorized and
reserved for issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and nonassessable; the
outstanding shares of Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and the stockholders of the Company
have no preemptive rights with respect to the Common Stock.
(i) If the Offered Securities are Common Stock or are convertible
into Common Stock: Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like payment.
(j) If the Offered Securities are Common Stock or are convertible
into Common Stock: There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Act.
(k) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement
(including the provisions of this Agreement) in connection with the
issuance and sale of the Offered Securities by the Company, except such as
have been obtained and made under the Act and, if the Offered Securities
are debt securities, the Trust Indenture Act and such as may be required
under state securities laws.
(l) The execution, delivery and performance of the Indenture (if the
Offered Securities are debt securities), the Terms Agreement (including the
provisions of this Agreement) and any Delayed Delivery
2
<PAGE>
Contracts and the issuance and sale of the Offered Securities and, if the
Offered Securities are debt securities or preferred stock, compliance with
the terms and provisions thereof will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or body
or any court, domestic or foreign, having jurisdiction over the Company or
any subsidiary of the Company or any of their properties, or any agreement
or instrument to which the Company or any such subsidiary is a party or by
which the Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the charter
or by-laws of the Company or any such subsidiary, and the Company has full
power and authority to authorize, issue and sell the Offered Securities as
contemplated by the Terms Agreement (including the provisions of this
Agreement).
(m) The Terms Agreement (including the provisions of this Agreement)
and, if the Offered Securities are debt securities or preferred stock, any
Delayed Delivery Contracts have been duly authorized, executed and
delivered by the Company.
(n) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company and its subsidiaries
hold any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use made
or to be made thereof by them.
(o) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(p) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(q) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(r) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances
(collectively, "ENVIRONMENTAL LAWS"), owns or operates any real property
contaminated with any substance that is subject to any environmental laws,
is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any
environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate have a material adverse effect on
the Company and its subsidiaries taken as a whole; and the Company is not
aware of any pending investigation which might lead to such a claim.
(s) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a material adverse effect on the condition (financial
or other), business, properties or results of operations of the Company and
its subsidiaries taken as a whole, or would materially and adversely affect
the ability of the Company to perform its obligations under the Indenture
(if the Offered Securities are debt securities), the Terms Agreement
(including the provisions of this Agreement) or any Delayed Delivery
Contracts, or which are otherwise material in the context of the sale of
the Offered Securities; and no such actions, suits or proceedings are
threatened or, to the Company's knowledge, contemplated.
(t) The financial statements included in the Registration Statement
and Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and, except as otherwise
disclosed in the
3
<PAGE>
Prospectus, such financial statements have been prepared in conformity with
the generally accepted accounting principles in the United States applied
on a consistent basis; any schedules included in the Registration Statement
present fairly the information required to be stated therein; and if pro
forma financial statements are included in the Registration Statement and
Prospectus: the assumptions used in preparing the pro forma financial
statements included in the Registration Statement and the Prospectus
provide a reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the related
pro forma adjustments give appropriate effect to those assumptions, and the
pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.
(u) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in or contemplated
by the Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(v) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("TERMS AGREEMENT") at the
time the Company determines to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the principal amount or number
of shares to be purchased by each Underwriter, the purchase price to be paid by
the Underwriters and (if the Offered Securities are debt securities or preferred
stock) the terms of the Offered Securities not already specified (in the
Indenture, in the case of Offered Securities that are debt securities),
including, but not limited to, interest rate (if debt securities), dividend rate
(if preferred stock), maturity (if debt securities), any redemption provisions
and any sinking fund requirements and whether any of the Offered Securities may
be sold to institutional investors pursuant to Delayed Delivery Contracts (as
defined below). The Terms Agreement will also specify the time and date of
delivery and payment (such time and date, or such other time not later than
seven full business days thereafter as the Underwriter first named in the Terms
Agreement (the "Lead Underwriter") and the Company agree as the time for payment
and delivery, being herein and in the Terms Agreement referred to as the
"Closing Date"), the place of delivery and payment and any details of the terms
of offering that should be reflected in the prospectus supplement relating to
the offering of the Offered Securities. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the Closing Date (if later than the otherwise
applicable settlement date) shall be the date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering,
other than Contract Securities for which payment of funds and delivery of
securities shall be as hereinafter provided. The obligations of the
Underwriters to purchase the Offered Securities will be several and not joint.
It is understood that the Underwriters propose to offer the Offered Securities
for sale as set forth in the Prospectus.
If the Terms Agreement provides for sales of Offered Securities pursuant to
delayed delivery contracts, the Company authorizes the Underwriters to solicit
offers to purchase Offered Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("DELAYED DELIVERY
CONTRACTS") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date the
Company will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount or number of shares of Offered Securities to be sold pursuant
to Delayed Delivery Contracts ("CONTRACT SECURITIES"). The Underwriters will not
have any responsibility in respect of the validity or the performance of Delayed
Delivery Contracts. If the Company executes and delivers Delayed Delivery
Contracts, the Contract Securities will be deducted from the Offered Securities
to be purchased by the several Underwriters and the aggregate principal amount
or number of shares of Offered Securities to be purchased by each Underwriter
will be reduced pro rata in proportion to the principal amount or number of
shares of Offered Securities set forth opposite each Underwriter's name in such
Terms Agreement, except to the extent that the Lead Underwriter determines that
such reduction shall be otherwise than pro rata and so advise the Company. The
Company will advise the Lead Underwriter not later than the business day prior
to the Closing Date of the principal amount or number of shares of Contract
Securities.
If the Offered Securities are debt securities and the Terms Agreement
specifies "Book-Entry Only" settlement or otherwise states that the provisions
of this paragraph shall apply, the Company will deliver against payment of the
purchase price the Offered Securities in the form of one or more permanent
global securities in
4
<PAGE>
definitive form (the "GLOBAL SECURITIES") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent global securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus. Payment for the Offered Securities
shall be made by the Underwriters (if the Terms Agreement specifies that the
Offered Securities will not trade in DTC's Same Day Funds Settlement System) by
certified or official bank check or checks in New York Clearing House (next day)
funds or (if the Terms Agreement specifies that the Offered Securities will
trade in DTC's Same Day Funds Settlement System) in Federal (same day) funds by
official check or checks or wire transfer to an account in New York previously
designated to the Lead Underwriter by the Company at a bank acceptable to the
Lead Underwriter, in each case drawn to the order of the Company at the place of
payment specified in the Terms Agreement on the Closing Date, against delivery
to the Trustee as custodian for DTC of the Global Securities representing all of
the Offered Securities.
4. Certain Agreements of the Company. The Company agrees with the several
Underwriters that it will furnish to counsel for the Underwriters, one signed
copy of the registration statement relating to the Registered Securities,
including all exhibits, in the form it became effective and of all amendments
thereto and that, in connection with each offering of Offered Securities:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Lead Underwriter, subparagraph (5)) not later than the
second business day following the execution and delivery of the Terms
Agreement.
(b) The Company will advise the Lead Underwriter promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Lead Underwriter a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Lead Underwriter promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Company promptly will
notify the Lead Underwriter of such event and will promptly prepare and
file with the Commission, at its own expense, an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance. Neither the Lead Underwriter's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(d) As soon as practicable, but not later than 16 months, after the
date of each Terms Agreement, the Company will make generally available to
its securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the
registration statement relating to the Registered Securities, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such Terms
Agreement and (iii) the date of the Company's most recent Annual Report on
Form 10-K filed with the Commission prior to the date of such Terms
Agreement, which will satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus
and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Lead Underwriter reasonably
requests. The Company will pay the expenses of printing and distributing
to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale and (if the Offered Securities are debt securities or
preferred stock) the determination of their eligibility for investment
under the laws of such jurisdictions as the Lead Underwriter designates and
will continue such qualifications in effect so long as required for the
distribution.
(g) During the period of 10 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year, a copy of its annual report to
stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under
the Securities Exchange Act
5
<PAGE>
of 1934 or mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as the Lead Underwriter may reasonably
request.
(h) The Company will pay all expenses incident to the performance of
its obligations under the Terms Agreement (including the provisions of this
Agreement), for any filing fees or other expenses (including fees and
disbursements of counsel) in connection with qualification of the
Registered Securities for sale and (if the Offered Securities are debt
securities or preferred stock) any determination of their eligibility for
investment under the laws of such jurisdictions as the Lead Underwriter may
designate and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Offered
Securities (if they are debt securities or preferred stock), for any
applicable filing fee incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, the
review by the National Association of Securities Dealers, Inc. of the
Registered Securities, for any travel expenses of the Company's officers
and employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of Registered
Securities and for expenses incurred in distributing the Prospectus, any
preliminary prospectuses, any preliminary prospectus supplements or any
other amendments or supplements to the Prospectus to the Underwriters.
(i) If the Offered Securities are debt securities or preferred stock,
the Company will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to United States dollar-
denominated debt securities issued or guaranteed by the Company and having
a maturity of more than one year from the date of issue (if the Offered
Securities are debt securities) or any series of preferred stock issued or
guaranteed by the Company (if the Offered Securities are preferred stock),
or publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the Lead
Underwriter for a period beginning at the time of execution of the Terms
Agreement and ending the number of days after the Closing Date specified
under "Blackout" in the Terms Agreement.
(j) If the Offered Securities are Common Stock or are convertible
into Common Stock, the Company will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any
additional shares of its Common Stock or securities convertible into or
exchangeable or exercisable for any shares of its Common Stock, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of the Lead Underwriter for a
period beginning at the time of execution of the Terms Agreement and ending
the number of days after the Closing Date specified under "Blackout" in the
Terms Agreement, except grants of employee stock options pursuant to the
terms of a plan in effect on the date of the Terms Agreement, issuances of
Common Stock pursuant to the exercise of such options or the exercise of
any other employee stock options outstanding on the date of the Terms
Agreement or issuances of Common Stock pursuant to the Company's dividend
reinvestment plan.
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Arthur Andersen confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and any schedules
and any summary of earnings examined by them and included in the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on any unaudited
financial statements included in the Registration Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
6
<PAGE>
(A) the unaudited financial statements, if any, and any
summary of earnings included in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such
unaudited financial statements and summary of earnings for them
to be in conformity with generally accepted accounting
principles;
(B) if any unaudited "capsule" information is contained in
the Prospectus, the unaudited consolidated net sales, net
operating income, net income and net income per share amounts or
other amounts constituting such "capsule" information and
described in such letter do not agree with the corresponding
amounts set forth in the unaudited consolidated financial
statements or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
statements of income;
(C) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of the Terms
Agreement, there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt of the
Company and its consolidated subsidiaries or, at the date of the
latest available balance sheet read by such accountants, there
was any decrease in consolidated [net current assets or] net
assets, as compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(D) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year and with the period of corresponding
length ended the date of the latest income statement included in
the Prospectus, in consolidated net sales, net operating income
in the total or (if the Offered Securities are Common Stock or
are convertible into Common Stock) per share amounts of
consolidated income before extraordinary items or net income (if
the Offered Securities are debt securities) in the ratio of
earnings to fixed charges or (if the Offered Securities are
preferred stock) in the ratio of earnings to fixed charges and
preferred stock dividends combined;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for purposes of this subsection.
(b) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Coopers & Lybrand confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that, in their
opinion, the financial statements and any schedules and any summary of
earnings examined by them and included in the Prospectus comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(c) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(d) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other),
7
<PAGE>
business, properties or results of operations of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters including any Representatives, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities or preferred stock of
the Company by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities or preferred stock of the Company (other
than an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; (iv) any banking moratorium
declared by U.S. Federal, New York, or United Kingdom authorities; or (v)
any outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of a
majority in interest of the Underwriters including any Representatives, the
effect of any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities.
(e) (1) The Representatives shall have received an opinion, dated the
Closing Date, of Cravath, Swaine & Moore, counsel for the Company,
substantially to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification;
(ii) If the Offered Securities are debt securities: The
Indenture has been duly authorized, executed and delivered by the
Company and has been duly qualified under the Trust Indenture Act; the
Offered Securities have been duly authorized; the Offered Securities
other than any Contract Securities have been duly executed,
authenticated, issued and delivered; the Indenture and the Offered
Securities other than any Contract Securities constitute, and any
Contract Securities, when executed, authenticated, issued and
delivered in the manner provided in the Indenture and sold pursuant to
Delayed Delivery Contracts, will constitute, valid and legally binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Offered Securities other than any Contract
Securities conform, and any Contract Securities, when so issued and
delivered and sold will conform, to the description thereof contained
in the Prospectus;
(iii) If the Offered Securities are preferred stock: The Offered
Securities have been duly authorized; the Offered Securities other
than any Contract Securities have been validly issued and are fully
paid and nonassessable; any Contract Securities, when issued,
delivered and sold pursuant to Delayed Delivery Contracts, will be
validly issued, fully paid and nonassessable; and the Offered
Securities other than any Contract Securities conform, and any
Contract Securities, when so issued, delivered and sold, will conform,
to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to
the Offered Securities;
(iv) If the Offered Securities are Common Stock: The Offered
Securities and all other outstanding shares of the Common Stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and conform to the description thereof contained in
the Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Offered Securities;
(v) If the Offered Securities are convertible: The Offered
Securities other than any Contract Securities are, and any Contract
Securities, when (if the Offered Securities are debt securities)
executed, authenticated, issued and delivered in the manner provided
in the Indenture and sold pursuant to Delayed Delivery Contracts or
(if the Offered Securities are preferred stock) when issued, delivered
and sold pursuant to Delayed Delivery Contracts, will be convertible
into Common Stock of the Company in accordance with (if they are debt
securities) the Indenture or (if they are preferred stock) their
terms; the shares of Common Stock initially issuable upon conversion
of the Offered Securities have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such conversion,
will be validly issued, fully paid and
8
<PAGE>
nonassessable; the outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and
conform to the description thereof contained in the Prospectus; and
the stockholders of the Company have no preemptive rights with respect
to the Common Stock;
(vi) If the Offered Securities are Common Stock or are
convertible into Common Stock: Except as disclosed in the Prospectus,
there are no contracts, agreements or understandings known to such
counsel between the Company and any person granting such person the
right to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act;
(vii) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940;
(viii) No consent, approval, authorization or order of, or filing
with, any United States Federal, New York or, to the extent required
under the General Corporation Law of the State of Delaware, Delaware
governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement
(including the provisions of this Agreement) in connection with the
issuance or sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and, if the Offered
Securities are debt securities, the Trust Indenture Act and such as
may be required under state securities laws;
(ix) The execution, delivery and performance of the Indenture (if
the Offered Securities are debt securities), the Terms Agreement
(including the provisions of this Agreement) and, if the Offered
Securities are debt securities or preferred stock, any Delayed
Delivery Contracts and the issuance and sale of the Offered Securities
and, if the Offered Securities are debt securities or preferred stock,
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation of the
United States or the State of New York or the General Corporation Law
of the State of Delaware, or to our knowledge, any order of any
governmental agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their properties,
or any agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary
is bound and listed as an exhibit to the Registration Statement or the
charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement);
(x) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under
the Act, and the registration statement relating to the Registered
Securities, as of its effective date, the Registration Statement and
the Prospectus, as of the date of the Terms Agreement, and any
amendment or supplement thereto, as of its date, complied as to form
in all material respects with the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations; such counsel have no
reason to believe that such registration statement, as of its
effective date, the Registration Statement, as of the date of the
Terms Agreement or as of the Closing Date, or any amendment thereto,
as of its date or as of the Closing Date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of the date of the
Terms Agreement or as of such Closing Date, or any amendment or
supplement thereto, as of its date or as of the Closing Date,
contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel do not know of any
legal or governmental proceedings required to be described in the
Prospectus which are not described as required or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it being
understood that such counsel need express
9
<PAGE>
no opinion as to the financial statements or other financial data
contained in the Registration Statement or the Prospectus;
(xi) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have and, if the Offered
Securities are debt securities or preferred stock, any Delayed
Delivery Contracts have been duly authorized, executed and delivered
by the Company;
(xii) All of the issued shares of capital stock of each of the
Company's subsidiaries have been duly and validly authorized and
issued and are fully paid and nonassessable, and all of the issued
shares of capital stock of each subsidiary are (except for directors'
qualifying shares) owned of record by the Company and/or a subsidiary
of the Company, and to the knowledge of such counsel, are owned free
and clear of all liens, encumbrances, equities or claims;
(xiii) The statements made in the Registration Statement under
the captions "Description of the Notes" and "Description of Capital
Stock", insofar as they purport to constitute summaries of certain
terms of the instruments referred to therein, constitute accurate
summaries of the terms of such instruments in all material respects;
(xiv) The statements in the Registration Statement under the
heading "Certain Income Tax Considerations", to the extent that they
constitute summaries of matters of law or regulation or legal
conclusions, have been reviewed by such counsel and fairly summarize
the matters described therein in all material respects; and
(xv) To such counsel's knowledge and other than as set forth in
the Registration Statement, (A) the Company and the Company's
subsidiaries possess such certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them, except where the failure to possess such certificates,
authorizations or permits would not be reasonably expected to have a
material adverse effect on the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole ("MATERIAL ADVERSE EFFECT") on the
Company and its subsidiaries and (B) neither the Company nor its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singularly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would be reasonably expected
to have such a Material Adverse Effect.
For purposes of the opinions delivered pursuant to clauses (i) through
(xiv) of this Section 6(c)(1), the term "subsidiaries" shall not include either
ChiRex (Holdings) Limited, ChiRex (Dudley) Limited or ChiRex (Annan) Limited.
(2) The Representatives shall have received an opinion, dated the
Closing Date, of Dibb Lupton Alsop, U.K. counsel for the Company and its
subsidiaries, substantially to the effect that:
(i) ChiRex (Holdings) Limited ("HOLDINGS"), ChiRex (Dudley)
Limited ("DUDLEY") and ChiRex (Annan) Limited ("ANNAN") have been duly
incorporated and are validly existing as corporations in good standing
under the laws of England and Wales, and have full corporate power and
authority to conduct their business as described in the Registration
Statement;
(ii) All of the issued shares of capital stock of Holdings,
Dudley and Annan have been duly and validly authorized and issued, are
fully paid and none of the shareholders holding such shares have any
liability to contribute to Holdings, Dudley and Annan any further
funds in respect of or relating to their acquisition of such shares.
(iii) To such counsel's knowledge, neither Holdings, Dudley or
Annan are in violation of its Memorandum or Articles of Association.
(e) The Representatives shall have received from . counsel
for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the incorporation of the Company, the validity of the
Offered Securities, the Registration Statement, the Prospectus and other
related matters as the Representatives may require, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such
opinion, . may rely as to the incorporation of the Company and all
other matters governed by United Kingdom law upon the opinion of Dibb
Lupton Alsop referred to above.
(f) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such
10
<PAGE>
officers, to the best of their knowledge after reasonable investigation,
shall state that the representations and warranties of the Company in this
Agreement are true and correct, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date,that no stop order
suspending the effectiveness of the Registration Statetement or of any part
thereof has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission and that, subsequent to
the date of the most recent financial statements in the Prospectus, there
has been no material adverse change, nor any development or event involving
a prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company and
its subsidiaries taken as a whole except as set forth in or contemplated by
the Prospectus or as described in such certificate.
(g) The Representatives shall have received two letters, dated the
Closing Date, of Arthur Andersen and Coopers & Lybrand which meet the
requirements of subsections (a) and (b) of this Section, except that the
specified date referred to in such subsection will be a date not more than
three business days prior to the Closing Date for the purposes of this
subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. The Lead Underwriter may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters under this Agreement and the Terms Agreement.
6. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives, if any,
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in the Terms Agreement.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information described as such in the Terms Agreement.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity
11
<PAGE>
could have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities under the Terms Agreement and
the aggregate principal amount (if debt securities) or number of shares (if
preferred stock or Common Stock) of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount (if debt securities) or number of shares (if
preferred stock or Common Stock) of Offered Securities, the Lead Underwriter may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments under the
Terms Agreement (including the provisions of this Agreement), to purchase the
Offered Securities that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount (if debt securities) or number of shares (if preferred stock or
Common Stock) of Offered Securities with respect to which such default or
defaults occur exceeds 10% of the total principal amount (if debt securities) or
number of shares (if preferred stock or Common Stock) of Offered Securities and
arrangements satisfactory to the Lead Underwriter and the Company for the
purchase of such Offered Securities by other persons are not made within 36
hours after such default, the Terms Agreement will terminate without liability
on the part of any non-defaulting Underwriter or the Company, except as provided
in Section 8. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default. If the Offered
Securities are debt securities or preferred stock, the respective commitments of
the several Underwriters for the purposes of this Section shall be determined
without regard to reduction in the respective Underwriters' obligations to
purchase the principal amounts (if debt securities) or numbers of shares (if
preferred stock) of the Offered Securities set forth opposite their names in the
Terms Agreement as a result of Delayed Delivery Contracts entered into by the
Company.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to the Terms Agreement (including the provisions of this Agreement)
will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the Company or any of their respective representatives, officers or directors or
any controlling person,
12
<PAGE>
and will survive delivery of and payment for the Offered Securities. If the
Terms Agreement is terminated pursuant to Section 7 or if for any reason the
purchase of the Offered Securities by the Underwriters is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4 and the respective obligations of the Company and the
Underwriters pursuant to Section 6 shall remain in effect. If the purchase of
the Offered Securities by the Underwriters is not consummated for any reason
other than solely because of the termination of the Terms Agreement pursuant to
Section 7 or the occurrence of any event specified in clause (iii), (iv) or (v)
of Section 5(c), the Company will reimburse the Underwriters for all out-of-
pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their address furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at 300 Atlantic Street, Suite 402, Stamford,
CT 06901, Attention: Michael Griffith.
10. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon the Company and such
Underwriters as are identified in the Terms Agreement and their respective
successors and the officers and directors and controlling persons referred to in
Section 6, and no other person will have any right or obligation hereunder.
11. Representation of Underwriters. Any Representatives will act for the
several Underwriters in connection with the financing described in the Terms
Agreement, and any action under such Terms Agreement (including the provisions
of this Agreement) taken by the Representatives jointly or by the Lead
Underwriter will be binding upon all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. APPLICABLE LAW. THIS AGREEMENT AND THE TERMS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to the Terms Agreement (including the
provisions of this Agreement) or the transactions contemplated thereby.
13
<PAGE>
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and returned
to the address shown below so as to arrive not later than 9:00 A.M.,
New York time, on _____________________________________, 19___/(1)/)
DELAYED DELIVERY CONTRACT
-------------------------
[Insert date of initial public offering]
ChiRex Inc.
c/o [ ]
Eleven Madison Avenue
New York, N.Y. 10010-3629
Attention: Investment Banking Department - Transactions Advisory Group
Gentlemen:
The undersigned hereby agrees to purchase from ChiRex Inc., a Delaware
corporation ("COMPANY"), and the Company agrees to sell to the undersigned, [If
one delayed closing, insert--as of the date hereof, for delivery on
______________, 19__ ("DELIVERY DATE"),]
[$]..............[shares]
- --principal amount--of the Company's [Insert title of securities]
("SECURITIES"), offered by the Company's Prospectus dated __________, 19__ and a
Prospectus Supplement dated _____________________, 19__ relating thereto,
receipt of copies of which is hereby acknowledged, at--___% of the principal
amount thereof plus accrued interest, if any,--$_____ per share plus accrued
dividends, if any,--and on the further terms and conditions set forth in this
Delayed Delivery Contract ("CONTRACT").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof, for
delivery on the dates set forth below, Securities in the--principal--amounts set
forth below:
PRINCIPAL AMOUNT
- ----------------
NUMBER
DELIVERY DATE OF SHARES
- -----------------------
.............................................. .............
.............................................. .............
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase for
delivery on--the--each--Delivery Date shall be made to the Company or its order
by certified or official bank check in New York Clearing House (next day) funds
at the office of ____________________ at ______.M. on--the--such--Delivery Date
upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date--in definitive [If debt issue,
insert--fully registered] form and in
- ---------------------------
/(1)/ Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
14
<PAGE>
such denominations and registered in such names as the undersigned may designate
by written or telegraphic communication addressed to the Company not less than
five full business days prior to--the--such--Delivery Date.
It is expressly agreed that the provisions for delayed delivery and payment
are for the sole convenience of the undersigned; that the purchase hereunder of
Securities is to be regarded in all respects as a purchase as of the date of
this Contract; that the obligation of the Company to make delivery of and
accept payment for, and the obligation of the undersigned to take delivery of
and make payment for, Securities on--the--each--Delivery Date shall be subject
only to the conditions that (1) investment in the Securities shall not at--the--
such--Delivery Date be prohibited under the laws of any jurisdiction in the
United States to which the undersigned is subject and (2) the Company shall have
sold to the Underwriters the total--principal amount--number of shares--of the
Securities less the--principal amount---number of shares--thereof covered by
this and other similar Contracts. The undersigned represents that its
investment in the Securities is not, as of the date hereof, prohibited under the
laws of any jurisdiction to which the undersigned is subject and which governs
such investment.
Promptly after completion of the sale to the Underwriters the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by--a copy--copies--of the opinion[s] of counsel for the
Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
......................................................
(Name of Purchaser)
By....................................................
......................................................
(Title of Signatory)
......................................................
......................................................
(Address of Purchaser)
Accepted, as of the above date.
[Insert Name of Issuer]
By....................................................
[Insert Title]
15
<PAGE>
CHIREX INC.
("COMPANY")
DEBT SECURITIES
TERMS AGREEMENT
---------------
____________, 19__
To: The [Representative[s] of the] Underwriters identified herein
Dear Sirs:
The undersigned agrees to sell to the several Underwriters named [in
Schedule A hereto] [below] for their respective accounts, on and subject to the
terms and conditions of the Underwriting Agreement filed as an exhibit to the
Company's registration statement on Form S-3 (No. 333-____) ("UNDERWRITING
AGREEMENT"), the following securities ("OFFERED SECURITIES") on the following
terms:
TITLE: [__%] [Floating Rate]--Notes--Debentures--Bonds--Due____________.
PRINCIPAL AMOUNT: $___________.
INTEREST: [__% per annum, from __________, 19__, payable semiannually on
__________ and ___________, commencing ___________ _, 19__, to holders of
record on the preceding _____________ or __________, as the case may be.]
[Zero coupon.]
MATURITY: _____________, 19__.
OPTIONAL REDEMPTION:
SINKING FUND:
LISTING: [None.] [ Stock Exchange.] [The Nasdaq Stock Market Inc.'s
National Market.]
DELAYED DELIVERY CONTRACTS: [None.] [Delivery Date[s] shall be
_____________, 19__. Underwriters' fee is ___% of the principal amount of
the Contract Securities.]
PURCHASE PRICE: ______% of principal amount, plus accrued interest[, if
any,] from _______________, 19__.
EXPECTED REOFFERING PRICE: ___% of principal amount, subject to change by
the [Representative[s] [Underwriters].
CLOSING: ____________A.M. on ________________, 19_____, at _____________,
in Federal (same day) funds.
SETTLEMENT AND TRADING: [Physical certificated form.] [Book-Entry Only via
DTC. The Offered Securities will trade in DTC's Same Day Funds Settlement
System.]
BLACKOUT: Until _____ days after the Closing Date.
[NAME[S] AND ADDRESS[ES] OF [REPRESENTATIVE[S]] [UNDERWRITER[S]]:]
16
<PAGE>
The respective principal amounts of the Offered Securities to be
purchased by each of the Underwriters are set forth opposite their names in
Schedule A hereto.
The provisions of the Underwriting Agreement are incorporated herein
by reference.
The Offered Securities will be made available for checking and
packaging at the office of ________________________ at least 24 hours prior
to the Closing Date.
For purposes of Section 6 of the Underwriting Agreement, the only
information furnished to the Company by any Underwriter for use in the
Prospectus consists of [(i)] the following information in the Prospectus
furnished on behalf of each Underwriter: the last paragraph at the bottom
of the prospectus supplement cover page concerning the terms of the
offering by the Underwriters, the legend concerning over-allotments--and--,
--stabilizing [and passive market making] on the inside front cover page of
the prospectus supplement--and--, --the concession and reallowance figures
appearing in the paragraph under the caption "Underwriting" in the
prospectus supplement [If paragraph regarding passive market making is
included, insert--and the information contained in the paragraph under the
caption "Underwriting" in the prospectus supplement] [If applicable,
insert--; and (ii) the following information in the prospectus supplement
furnished on behalf of [insert name of Underwriter]: [insert description of
information, such as material relationship disclosure under the caption
"Underwriting" in the prospectus supplement].
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof, whereupon
it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
[Insert Name of Issuer]
By..........................................
[Insert title]__________________
The foregoing Terms Agreement is hereby confirmed and accepted as of the date
first above written.
[If no co-representative, use first confirmation form. If co-representative,
use second.]
[ ]
By..................................................................
[Insert title]
[Acting on behalf of itself and as the
Representative of the several
Underwriters.]
[ ]
..........................................................
.........................................................,
[Acting on behalf of themselves and as the
Representatives of the several Underwriters.]
By [ ]
By..................................................................
[Insert title]
17
<PAGE>
SCHEDULE A
UNDERWRITER PRINCIPAL
----------- AMOUNT
---------
[ ]................................. $___________
[ ]................................. ___________
-----------
Total........................... $
===========
18
<PAGE>
CHIREX INC.
("COMPANY")
PREFERRED--COMMON--STOCK
TERMS AGREEMENT
---------------
___ ________, 19__
To: The [Representative[s] of the] Underwriters identified herein
Dear Sirs:
The undersigned agrees to sell to the several Underwriters named [in
Schedule A hereto] [below] for their respective accounts, on and subject to the
terms and conditions of the Underwriting Agreement filed as an exhibit to the
Company's registration statement on Form S-3 (No. 33-____) ("UNDERWRITING
AGREEMENT"), the following securities ("OFFERED SECURITIES") on the following
terms:
TITLE:
NUMBER OF SHARES:
DIVIDEND RATE:
/(1)/ OPTIONAL REDEMPTION:
/(1)/ SINKING FUND:
/(1)/ LISTING: [None.] [ Stock Exchange.] [The Nasdaq Stock Market.]
/(1)/ DELAYED DELIVERY CONTRACTS: [None.] [Delivery Date[s] shall be
_____________, 19__. Underwriters' fee is $_________ per share of the
Contract Securities.]
PURCHASE PRICE: $______ per share [If preferred stock issue, insert--
plus accrued dividends[, if any,] from _______________, 19__].
EXPECTED REOFFERING PRICE: $___ _ per share, subject to change by the
[Representative[s]] [Underwriters].
CLOSING: ____________A.M. on ________________, 19______, at
_______________, in New York Clearing House (next day) funds.
UNDERWRITER[S']['S] COMPENSATION: $_______ payable to the
[Representative[s] for the proportionate accounts of the]
Underwriter[s] on the Closing Date.
BLACKOUT: Until ___days after the Closing Date.
[NAME[S] AND ADDRESS[ES] OF [REPRESENTATIVE[S]] [UNDERWRITER[S]]:]
The respective numbers of shares of the Offered Securities to be
purchased by each of the Underwriters are set forth opposite their names in
Schedule A hereto.
19
<PAGE>
The provisions of the Underwriting Agreement are incorporated herein
by reference.
The Offered Securities will be made available for checking and
packaging at the office of _________ at least 24 hours prior to the Closing
Date.
For purposes of Section 6 of the Underwriting Agreement, the only
information furnished to the Company by any Underwriter for use in the
Prospectus consists of [(i)] the following information in the Prospectus
furnished on behalf of each Underwriter: the last paragraph at the bottom of the
prospectus supplement cover page concerning the terms of the offering by the
Underwriters, the legend concerning over-allotments--and--, --stabilizing [and
passive market making] on the inside front cover page of the prospectus
supplement--and--, --the concession and reallowance figures appearing in the
paragraph under the caption "Underwriting" in the prospectus supplement [If
paragraph regarding passive market making is included, insert--and the
information contained in the paragraph under the caption "Underwriting" in the
prospectus supplement] [If applicable, insert--; and (ii) the following
information in the prospectus supplement furnished on behalf of [insert name of
Underwriter]: [insert description of information, such as material relationship
disclosure under the caption "Underwriting" in the prospectus supplement].
20
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
[Insert Name of Issuer]
By..........................................
[Insert title]__________________
The foregoing Terms Agreement is hereby confirmed and accepted as of the date
first above written.
[If no co-representative, use first confirmation form. If co-representative,
use second.]
[ ]
By..................................................................
[Insert title]
[Acting on behalf of itself and as the
Representative of the several
Underwriters.]
[ ]
..........................................................
.........................................................,
[Acting on behalf of themselves and as the
Representatives of the several Underwriters.]
By [ ]
By..................................................................
[Insert title]
21
<PAGE>
SCHEDULE A
UNDERWRITER NUMBER
----------- OF
SHARES
------
[ ]............................. $___________
[ ]............................. ___________
----------
Total $
==========
22
<PAGE>
------------------------------------------------------------
CHIREX INC.
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
_________
Indenture
Dated as of
________
Debt Securities
------------------------------------------------------------
<PAGE>
CHIREX INC.
Debt Securities
CROSS REFERENCE SHEET/*/
This Cross Reference Sheet shows the location in the Indenture of the provisions
inserted pursuant to Sections 310-318(a), inclusive of the Trust Indenture Act
of 1939.
Indenture
TIA Section Section
----------- -------
310 (a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... 7.10
(a)(4)................................................... 7.10
(a)(5)................................................... 7.10
(b)...................................................... 7.10
(c)...................................................... N.A./**/
311 (a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N.A
312 (a)...................................................... 5.01
(b)...................................................... 5.02
(c)...................................................... 5.02
313 (a)...................................................... 5.04
(b)(1)................................................... 5.04
(b)(2)................................................... 5.04
(c)...................................................... 13.03
(d)...................................................... 5.04
- ------------------------
/*/ The Cross Reference Sheet is not part of the Indenture.
/**/ N.A. means "Not Applicable."
<PAGE>
2
Indenture
TIA Section Section
----------- -------
314 (a)(1)................................................... 5.03(a)
(a)(2)................................................... 5.03(b)
(a)(3)................................................... 5.03(a)&(b)
& 13.03
(a)(4)................................................... 4.05
(b)...................................................... N.A.
(c)(1)................................................... 13.05
(c)(2)................................................... 13.05
(c)(3)................................................... N.A.
(d)...................................................... N.A.
(e)...................................................... 13.05
(f)...................................................... 4.06
315 (a)...................................................... 7.01(a)
(b)...................................................... 6.07
& 13.03
(c)...................................................... 7.01
(d)...................................................... 7.01
(e)...................................................... 6.08
316 (a)(last sentence)....................................... 1.01
(a)(1)(A)................................................ 6.06
(a)(1)(B)................................................ 6.06
(a)(2)................................................... 9.01(d)
(b)...................................................... 6.04
(c)...................................................... 5.05
317 (a)(1)................................................... 6.02
(a)(2)................................................... 6.02
(b)...................................................... 4.04
318 (a)...................................................... 13.07
<PAGE>
TABLE OF CONTENTS/*/
Page
----
RECITALS OF THE COMPANY .................................................
ARTICLE I
Definitions
-----------
SECTION 1.01. Certain Terms Defined..............................
SECTION 1.02. Incorporation by Reference of Trust
Indenture Act
SECTION 1.03. Rules of Construction..............................
ARTICLE II
Debt Securities
---------------
SECTION 2.01. Forms Generally....................................
SECTION 2.02. Form of Trustee's Certificate of
Authentication...................................
SECTION 2.03. Principal Amount; Issuable in
Series...........................................
SECTION 2.04. Execution of Debt Securities.......................
SECTION 2.05. Authentication and Delivery of Debt
Securities.......................................
SECTION 2.06. Denomination of Debt Securities....................
SECTION 2.07. Registration of Transfer and
Exchange.........................................
SECTION 2.08. Temporary Debt Securities..........................
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen
Debt Securities..................................
SECTION 2.10. Cancelation of Surrendered Debt
Securities.......................................
SECTION 2.11. Provisions of the Indenture and Debt
Securities for the Sole Benefit of
the Parties and the Holders......................
SECTION 2.12. Payment of Interest; Interest Rights
Preserved........................................
SECTION 2.13. Securities Denominated in Foreign
Currencies.......................................
SECTION 2.14. Wire Transfers.....................................
SECTION 2.15. Securities Issuable in the Form of a
Global Security..................................
SECTION 2.16. Medium Term Securities.............................
/*/ The Table of Contents is not part of the Indenture.
<PAGE>
Contents, p. 2
SECTION 2.17. Defaulted Interest.................................
SECTION 2.18. Judgments..........................................
ARTICLE III
Redemption of Debt Securities
-----------------------------
SECTION 3.01. Applicability of Article...........................
SECTION 3.02. Tax Redemption; Special Tax
Redemption.......................................
SECTION 3.03. Notice of Redemption; Selection of
Debt Securities..................................
SECTION 3.04. Payment of Debt Securities Called
for Redemption...................................
SECTION 3.05. Mandatory and Optional Sinking
Funds............................................
SECTION 3.06. Redemption of Debt Securities for
Sinking Fund.....................................
ARTICLE IV
Particular Covenants of the Company
-----------------------------------
SECTION 4.01. Payment of Principal of, and
Premium, If Any, and Interest on,
Debt Securities..................................
SECTION 4.02. Maintenance of Offices or Agencies
for Registration of Transfer,
Exchange and Payment of Debt
Securities.......................................
SECTION 4.03. Appointment to Fill a Vacancy in the
Office of Trustee................................
SECTION 4.04. Duties of Paying Agents, etc.......................
SECTION 4.05. Statement by Officers as to
Default..........................................
SECTION 4.06. Payment of Additional Interest.....................
SECTION 4.07. Further Instruments and Acts.......................
SECTION 4.08. Existence..........................................
SECTION 4.09. Maintenance of Properties..........................
SECTION 4.10. Payment of Taxes and Other Claims..................
ARTICLE V
Holders, Lists and Reports by the Company and the Trustee
---------------------------------------------------------
SECTION 5.01. Company to Furnish Trustee
Information as to Names and
Addresses of Holders; Preservation
of Information...................................
<PAGE>
Contents, p. 3
SECTION 5.02. Communications to Holders..........................
SECTION 5.03. Reports by Company.................................
SECTION 5.04. Reports by Trustee.................................
SECTION 5.05. Record Dates for Action by Holders.................
ARTICLE VI
Remedies of the Trustee and Holders in Event of Default
-------------------------------------------------------
SECTION 6.01. Events of Default..................................
SECTION 6.02. Collection of Indebtedness by
Trustee, etc.....................................
SECTION 6.03. Application of Moneys Collected by
Trustee..........................................
SECTION 6.04. Limitation on Suits by Holders.....................
SECTION 6.05. Remedies Cumulative; Delay or
Omission in Exercise of Rights Not
a Waiver of Default..............................
SECTION 6.06. Rights of Holders of Majority in
Principal Amount of Debt
Securities to Direct Trustee and
to Waive Default.................................
SECTION 6.07. Trustee to Give Notice of Defaults
Known to It, but May Withhold Such
Notice in Certain Circumstances..................
SECTION 6.08. Requirement of an Undertaking to Pay
Costs in Certain Suits Under the
Indenture or Against the Trustee.................
ARTICLE VII
Concerning the Trustee
----------------------
SECTION 7.01. Certain Duties and Responsibilities................
SECTION 7.02. Certain Rights of Trustee..........................
SECTION 7.03. Trustee Not Liable for Recitals in
Indenture or in Debt Securities..................
SECTION 7.04. Trustee, Paying Agent or Registrar'
May Own Debt Securities..........................
SECTION 7.05. Moneys Received by Trustee to Be
Held in Trust....................................
SECTION 7.06. Compensation and Reimbursement.....................
SECTION 7.07. Right of Trustee to Rely on an
Officers' Certificate Where No
Other Evidence Specifically
Prescribed.......................................
SECTION 7.08. Separate Trustee; Replacement of
Trustee..........................................
SECTION 7.09. Successor Trustee by Merger........................
<PAGE>
Consents, p. 4
SECTION 7.10. Eligibility; Disqualification......................
SECTION 7.11. Preferential Collection of Claims
Against Company..................................
SECTION 7.12. Compliance with Tax Laws...........................
ARTICLE VIII
Concerning the Holders
----------------------
SECTION 8.01. Evidence of Action by Holders......................
SECTION 8.02. Proof of Execution of Instruments
and of Holding of Debt Securities................
SECTION 8.03. Who May Be Deemed Owner of Debt
Securities.......................................
SECTION 8.04. Instruments Executed by Holders
Bind Future Holders..............................
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. Purposes for Which Supplemental
Indenture May Be Entered into
Without Consent of Holders.......................
SECTION 9.02. Modification of Indenture with
Consent of Holders of Debt
Securities.......................................
SECTION 9.03. Effect of Supplemental Indentures..................
SECTION 9.04. Debt Securities May Bear Notation
of Changes by Supplemental
Indentures.......................................
SECTION 9.05. Payment for Consent................................
ARTICLE X
Consolidation, Merger, Sale or Conveyance
-----------------------------------------
SECTION 10.01. Consolidations and Mergers of the
Company..........................................
SECTION 10.02. Rights and Duties of Successor
Corporation......................................
ARTICLE XI
Satisfaction and Discharge of Indenture;
----------------------------------------
Defeasance; Unclaimed Moneys
----------------------------
<PAGE>
Contents, p. 5
SECTION 11.01. Applicability of Article...........................
SECTION 11.02. Satisfaction and Discharge of
Indenture; Defeasance............................
SECTION 11.03. Conditions to Defeasance...........................
SECTION 11.04. Application of Trust Money.........................
SECTION 11.05. Repayment to Company...............................
SECTION 11.06. Indemnity for U.S. Government
Obligations......................................
SECTION 11.07. Reinstatement......................................
ARTICLE XII
Subordination of Debt Securities
--------------------------------
SECTION 12.01. Applicability of Article; Agreement
to Subordinate...................................
SECTION 12.02. Liquidation, Dissolution, Bankruptcy...............
SECTION 12.03. Default on Senior Indebtedness.....................
SECTION 12.04. Acceleration of Payment of Debt
Securities.......................................
SECTION 12.05. When Distribution Must Be Paid Over................
SECTION 12.06. Subrogation........................................
SECTION 12.07. Relative Rights....................................
SECTION 12.08. Subordination May Not Be Impaired by
Company..........................................
SECTION 12.09. Rights of Trustee and Paying Agent.................
SECTION 12.10. Distribution or Notice to
Representative...................................
SECTION 12.11. Article XII Not to Prevent Defaults
or Limit Right to Accelerate.....................
SECTION 12.12. Trust Moneys Not Subordinated......................
SECTION 12.13. Trustee Entitled to Rely...........................
SECTION 12.14. Trustee to Effectuate Subordination................
SECTION 12.15. Trustee Not Fiduciary for Holders of
Senior Indebtedness..............................
SECTION 12.16. Reliance by Holders of Senior
Indebtedness on Subordination
Provisions.......................................
ARTICLE XIII
Miscellaneous Provisions
------------------------
SECTION 13.01. Successors and Assigns of Company
Bound by Indenture...............................
SECTION 13.02. Acts of Board, Committee or Officer
of Successor Company Valid.......................
SECTION 13.03. Required Notices or Demands........................
<PAGE>
Contents, p. 6
SECTION 13.04. Indenture and Debt Securities to Be
Construed in Accordance with the
Laws of the State of New York....................
SECTION 13.05. Officers' Certificate and Opinion of
Counsel to Be Furnished upon
Application or Demand by the
Company..........................................
SECTION 13.06. Payments Due on Legal Holidays.....................
SECTION 13.07. Provisions Required by Trust
Indenture Act to Control.........................
SECTION 13.08. Computation of Interest on Debt
Securities.......................................
SECTION 13.09. Rules by Trustee, Paying Agent and
Registrar........................................
SECTION 13.10. No Recourse Against Others.........................
SECTION 13.11. Severability.......................................
SECTION 13.12. Effect of Headings.................................
SECTION 13.13. Indenture May Be Executed in
Counterparts.....................................
SIGNATURES .............................................................
<PAGE>
INDENTURE dated as of , between CHIREX
INC., a corporation duly organized and existing under the laws of
the State of Delaware (the "Company"), and , a
corporation duly incorporated and existing under the laws of the
State of (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness to be issued in one or more
series unlimited as to principal amount (herein called the "Debt Securities"),
as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH
That in order to declare the terms and conditions upon which the Debt
Securities are authenticated, issued and delivered, and in consideration of the
premises, and of the purchase and acceptance of the Debt Securities by the
holders thereof, the Company and the Trustee covenant and agree with each other,
for the benefit of the respective Holders from time to time of the Debt
Securities or any series thereof, as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Certain Terms Defined. The terms defined in this
----------------------
Section 1.01 (except as herein otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture and of any
Indenture supplemental hereto shall have the respective meanings specified in
this Section 1.01. All other terms used in this Indenture which are defined in
the Trust Indenture Act or which are by reference therein defined in the
Securities Act (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meanings assigned to such terms in
the Trust Indenture Act and in the
<PAGE>
2
Securities Act as in force as of the date of original execution of this
Indenture.
"Affiliate" of any specified Person means any other Person, directly
---------
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Authorized Newspaper" means a newspaper in an official language of
--------------------
the country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, and of
general circulation in such city or cities specified pursuant to Section 2.03
with respect to the Debt Securities of any series. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same city
meeting the foregoing requirements and in each case on any business day in such
city.
"Bank Indebtedness" means any and all amounts payable under or in
-----------------
respect of the Credit Agreement, as amended from time to time, including
principal, premium (if any), interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees and
all other amounts payable thereunder or in respect thereof.
"Banks" has the meaning specified in the Credit Agreement.
-----
"Bearer Holder" means, with respect to any Bearer Security or Coupon,
-------------
the bearer thereof.
"Bearer Security" means any Debt Security (with or without Coupons),
---------------
title to which passes by delivery only, but does not include any Coupons.
"Board of Directors" means either the Board of Directors of the
------------------
Company or any duly authorized committee or subcommittee of such Board, except
as the context may otherwise require.
<PAGE>
3
"business day" means, when used with respect to any Place of Payment
------------
specified pursuant to Section 2.03, any day that is not a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies in
such Place of Payment are authorized or obligated by law to close, except as
otherwise specified pursuant to Section 2.03.
"Capitalized Lease Obligations" means an obligation that is required
-----------------------------
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP; and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
-------------
rights to purchase, warrants, options, participations or other equivalents of or
interests (including partnership interests) in (however designated) equity of
such Person, including any Preferred Stock, but excluding any debt securities
convertible into such equity.
"Common Stock" means the common stock, par value $.01 per share, of
------------
the Company, which stock is currently listed on the New York Stock Exchange.
"Company" means ChiRex Inc., a Delaware corporation, and, subject to
-------
the provisions of Article X, shall also include its successors and assigns.
"Company Order" means a written order of the Company, signed by its
-------------
Chairman of the Board, President or any Vice President and by its Treasurer,
Secretary, any Assistant Treasurer or any Assistant Secretary.
"Consolidated Net Tangible Assets" means at any date the total amount
--------------------------------
of assets that under generally accepted accounting principles would be included
on a consolidated balance sheet of the Company and its Restricted Subsidiaries
as of such date, less the sum of the following items, which would then also be
so included in accordance with generally accepted accounting principles: (a)
related depreciation, amortization and other valuation reserves, (b) certain
investments, less applicable reserves in Unrestricted Subsidiaries, (c) all
treasury stock, goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles and (d) all
<PAGE>
4
liabilities and liability in terms of the Company and its Restricted
Subsidiaries (including minority interests in Restricted Subsidiaries held by
persons other than the Company or wholly owned Restricted Subsidiaries) except
(i) the reserves deducted as described in clauses (a) and (b) above, (ii) funded
debt, (iii) provisions for deferred income taxes and (iv) capital stock, surplus
and surplus reserves.
"Consolidated Net Worth" means the total of the amounts shown on the
----------------------
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of the Company plus (ii) paid-
in capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
"corporate trust office of the trustee" or other similar term means
-------------------------------------
the office of the Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered in the United States
of America, except that with respect to the presentation of Debt Securities for
payment or for registration of transfer and exchange, such term shall also mean
the office of the Trustee or the Trustee's agent in the Borough of Manhattan,
the city and state of New York, at which at any particular time its corporate
agency business shall be conducted.
"Coupon" means any interest coupon appertaining to any Bearer
------
Security.
"Coupon Security" means any Bearer Security authenticated and
---------------
delivered with one or more Coupons appertaining thereto.
"Credit Agreement" means the Facilities Agreement dated as of October
----------------
30, 1997, among ChiRex (Holdings) Limited as Borrower, Bankers Trust
International PLC and Midland Bank PLC, as Joint Arrangers, the Co-Agents and
the Lenders party thereto, as amended or modified from time to time.
"Currency" means Dollars or Foreign Currency.
--------
<PAGE>
5
"Currency Exchange Protection Agreement" means, in respect of any
--------------------------------------
Person, any foreign exchange contract, currency swap agreement, currency option
or other similar agreement or arrangement designed to protect such Person
against fluctuations in currency exchange rates.
"Debt Security" or "Debt Securities" has the meaning stated in the
------------- ---------------
first recital of this Indenture and more particularly means any debt security or
debt securities, as the case may be, of any series authenticated and delivered
under this Indenture.
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Depositary" means, unless otherwise specified by the Company pursuant
----------
to either Section 2.03 or 2.15, with respect to registered Debt Securities of
any series issuable or issued in whole or in part in the form of one or more
Global Securities, The Depository Trust Company, New York, New York, or any
successor thereto registered as a clearing agency under the Exchange Act or
other applicable statute or regulations.
"Designated Senior Indebtedness" means (i) the Bank Indebtedness and
------------------------------
(ii) any other Senior Indebtedness which, at the date of determination, has an
aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof, are committed to lend up to, at least $100
million and is specifically designated by the Company in the instrument
evidencing or governing such Senior Indebtedness as "Designated Senior
Indebtedness" for purposes of this Indenture and has been designated as
"Designated Senior Indebtedness" for purposes of this Indenture in an Officers'
Certificate received by the Trustee.
"Disqualified Stock" of a Person means Redeemable Stock of such Person
------------------
as to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the holder thereof occurs, or may occur, on or prior
to the first anniversary of the Stated Maturity of the Debt Securities.
"Dollar" or "$" means such currency of the United States as at the
------ -
time of payment is legal tender for the payment of public and private debts.
"Dollar Equivalent" means, with respect to any monetary amount in a
-----------------
Foreign Currency, at any time for the
<PAGE>
6
determination thereof, the amount of Dollars obtained by converting such Foreign
Currency involved in such computation into Dollars at the spot rate for the
purchase of Dollars with the applicable Foreign Currency as quoted by Bankers
Trust Company (unless another comparable financial institution is designated by
the Company) in New York, New York at approximately 11:00 a.m. (New York time)
on the date two business days prior to such determination.
"Euro" means the currency created under the Treaty on the European
----
Economic and Monetary Union.
"European Currency Units" has the meaning assigned to it from time to
-----------------------
time by the Council of the European Communities.
"Event of Default" has the meaning specified in Section 6.01.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Floating Rate Security" means a Debt Security that provides for the
----------------------
payment of interest at a variable rate determined periodically by reference to
an interest rate index specified pursuant to Section 2.03.
"Foreign Currency" means a currency (including the Euro) issued by the
----------------
government of any country other than the United States or a composite currency
(including European Currency Units) the value of which is determined by
reference to the value of the currencies of any group of countries.
"GAAP" means generally accepted accounting principles in the United
----
States as in effect as of the date on which the Debt Securities of the
applicable series are issued, including those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession. All ratios and
computations based on GAAP contained in this Indenture shall be computed in
conformity with GAAP consistently applied.
"Global Security" means with respect to any series of Debt Securities
---------------
issued hereunder, a Debt Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
<PAGE>
7
Depositary's instruction, all in accordance with this Indenture and any
Indentures supplemental hereto, or resolution of the Board of Directors and set
forth in an Officers' Certificate, which shall be registered in the name of the
Depositary or its nominee and which shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of, all the Outstanding Debt
Securities of such series or any portion thereof, in either case having the same
terms, including, without limitation, the same original issue date, date or
dates on which principal is due and interest rate or method of determining
interest.
"Guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreement
to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
-------- -------
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
-------------------
Person pursuant to any Interest Rate Protection Agreement or Currency Exchange
Protection Agreement or other similar agreement.
"Holder," "Holder of Debt Securities" or other similar terms means,
------ -------------------------
with respect to a Registered Security, the Registered Holder and, with respect
to a Bearer Security or a Coupon, the Bearer Holder.
"Incur" means issue, assume, Guarantee, incur or otherwise become
-----
liable for; provided, however, that any Indebtedness or Capital Stock of a
-------- -------
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be incurred by such
Subsidiary at the time it becomes a Subsidiary. The terms "Incurred",
"Incurrence" and "Incurring" shall each have a correlative meaning.
<PAGE>
8
"Indebtedness" means, with respect to any Person on any date of
------------
determination (without duplication),
(i) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(iii) all Capitalized Lease obligations of such Person;
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables);
(v) all obligations of such Person in respect of letters of credit,
banker's acceptances or other similar instruments or credit transactions
(including reimbursement obligations with respect thereto), other than
obligations with respect to letters of credit securing obligations (other
than obligations described in (i) through (iv) above) entered into in the
ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the third business day following receipt by
such Person of a demand for reimbursement following payment on the letter
of credit;
(vi) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of the Company, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of such Indebtedness shall be the lesser
-------- -------
of (A) the fair market value of such asset at such date of determination
and (B) the amount of such Indebtedness of such other Persons;
(viii) all Indebtedness of other Persons to the extent Guaranteed by
such Person; and
<PAGE>
9
(ix) to the extent not otherwise included in this definition,
obligations in respect of Hedging Obligations.
For purposes of this definition, the maximum fixed redemption, repayment or
repurchase price of any Disqualified Stock or Preferred Stock that does not have
a fixed redemption, repayment or repurchase price shall be calculated in
accordance with the terms of such Stock as if such Stock were redeemed, repaid
or repurchased on any date on which Indebtedness shall be required to be
determined pursuant to this Indenture; provided, however, that if such Stock is
-------- -------
not then permitted to be redeemed, repaid or repurchased, the redemption,
repayment or repurchase price shall be the book value of such Stock as reflected
in the most recent financial statements of such Person. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date.
"Indenture" means this instrument as originally executed, or, if
---------
amended or supplemented as herein provided, as so amended or supplemented and
shall include the form and terms of particular series of Debt Securities as
contemplated hereunder, whether or not a supplemental Indenture is entered into
with respect thereto.
"Interest" includes, when used with respect to a Bearer Security, any
--------
additional interest payable on such Bearer Security pursuant to Section 3.02 or
4.06.
"Interest Rate Protection Agreement" means, in respect of any Person,
----------------------------------
any interest rate swap agreement, interest rate option agreement, interest rate
cap agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
"Lien" means any mortgage, pledge, security interest encumbrance, lien
----
or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Officers' Certificate" means a certificate signed by the Chairman of
---------------------
the Board, the President or any Vice President and by the Treasurer, the
Secretary or any Assistant Treasurer or Assistant Secretary of the Company.
<PAGE>
10
Each such certificate shall include the statements provided for in Section
13.05, if applicable.
"Opinion of Counsel" means an opinion in writing signed by legal
------------------
counsel for the Company (which counsel may be an employee of the Company), or
outside counsel for the Company who shall be reasonably satisfactory to the
Trustee. Each such opinion shall include the statements provided for in Section
13.05, if applicable.
"Original Issue Discount Debt Security" means any Debt Security which
-------------------------------------
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 6.01.
"Outstanding", when used with respect to any series of Debt
-----------
Securities, means, as of the date of determination, all Debt Securities of that
series theretofore authenticated and delivered under this Indenture, except:
(i) Debt Securities of that series theretofore canceled by the Trustee
or delivered to the Trustee for cancelation;
(ii) Debt Securities of that series for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any paying agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
paying agent) for the Holders of such Debt Securities; provided, that, if
--------
such Debt Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and
(iii) Debt Securities of that series which have been paid pursuant to
Section 2.09 or in exchange for or in lieu of which other Debt Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Debt Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Debt Securities
are held by a bona fide purchaser in whose hands such Debt Securities are
valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Debt Securities of any series have given any
request, demand,
<PAGE>
11
authorization, direction, notice, consent or waiver hereunder,
Debt Securities owned by the Company or any other obligor upon the Debt
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Debt Securities which
the Trustee knows to be so owned shall be so disregarded. Debt Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Debt Securities and that the pledgee is not the
Company or any other obligor upon the Debt Securities or an Affiliate of the
Company or of such other obligor. In determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
the principal amount of an Original Issue Discount Debt Security that shall be
deemed to be outstanding for such purposes shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
a declaration of acceleration of the maturity thereof pursuant to Section 6.01.
In determining whether the Holders of the requisite principal amount of the
Outstanding Debt Securities of any series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of a Debt Security denominated in one or more foreign currencies or
currency units that shall be deemed to be Outstanding for such purposes shall be
the Dollar Equivalent, determined in the manner provided as contemplated by
Section 2.03 on the date of original issuance of such Debt Security, of the
principal amount (or, in the case of any Original Issue Discount Security, the
Dollar Equivalent on the date of original issuance of such Security of the
amount determined as provided in the preceding sentence above) of such Debt
Security.
"pari passu", as applied to the ranking of any Indebtedness of a
---- -----
Person in relation to other Indebtedness of such Person, means that each such
Indebtedness either (i) is not subordinate in right of payment to any
Indebtedness or (ii) is subordinate in right of payment to the same Indebtedness
as is the other, and is so subordinate to the same extent, and is not
subordinate in right of payment to each other or to any Indebtedness as to which
the other is not so subordinate.
<PAGE>
12
"Person" means any individual, corporation, partnership, joint
------
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Place of Payment" means, when used with respect to the Debt
----------------
Securities of any series, the place or places where the principal of, and
premium, if any, and interest on, the Debt Securities of that series are payable
as specified pursuant to Section 2.03.
"Preferred Stock", as applied to the Capital Stock of any corporation,
---------------
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Principal Property" will mean any manufacturing or research property,
------------------
plant or facility of the Company or any Restricted Subsidiary except any
property that the Board of Directors by resolution declares is not of material
importance to the total business conducted by the Company and its Restricted
Subsidiaries as an entirety.
"Redeemable Stock" means, with respect to any Person, any Capital
----------------
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Indebtedness (other than
Preferred Stock) or Disqualified Stock or (iii) is redeemable at the option of
the holder thereof, in whole or in part.
"Registered Holder" means the Person in whose name a Registered
-----------------
Security is registered in the Debt Security Register (as defined in Section
2.07(a)).
"Registered Security" means any Debt Security registered as to
-------------------
principal and interest in the Debt Security Register (as defined in Section
2.07(a)).
"Registrar" has the meaning set forth in Section 2.07(a).
---------
"Representative" means the trustee, agent or representative (if any)
--------------
for an issue of Senior Indebtedness.
<PAGE>
13
"responsible officer", when used with respect to the Trustee, means
-------------------
any Account Manager or any officer within the Corporate Trust and Agency Group
of the Trustee, including any Vice President, any Assistant Vice President, any
trust officer or any other officer of the Trustee performing functions similar
to those performed by the persons who at the time shall be such officers, and
any other officer of the Trustee to whom corporate trust matters are referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means (a) any Subsidiary other than (1) a
---------------------
Subsidiary the primary business of which consists of one or more of the
following: (i) purchasing amounts receivable, (ii) making loans secured by
accounts receivable or inventories or otherwise providing credit, (iii) making
investment in real estate or providing services directly related thereto or
otherwise engaging in the business of a finance or real estate investment
company, or (iv) leasing equipment, machinery, vehicles, rolling stock and other
articles of use of the business of the Company, or (2) certain named
Subsidiaries; and (b) any Subsidiary described in Clauses (1) or (2) of
paragraph (a) above which at the time of determination shall be a Restricted
Subsidiary pursuant to designation by the Board of Directors hereinafter
provided for.
"Secured Indebtedness" means any Indebtedness of the Company secured
--------------------
by a Lien.
"Securities Act" means the Securities Act of 1933.
--------------
"Senior Indebtedness" means, as to any series of Debt Securities
-------------------
subordinated pursuant to the provisions of Article XII, the Indebtedness of the
Company identified as Senior Indebtedness in the resolution of the Board of
Directors and accompanying Officers' Certificate or supplemental Indenture
setting forth the terms, including as to Subordination, of such series.
"Significant Subsidiary" means a Subsidiary of any Person that would
----------------------
be a "significant subsidiary" as defined in Rule 405 under the Securities Act as
in effect on the date of this Indenture.
"Stated Maturity" means, with respect to any security, the date
---------------
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the
<PAGE>
14
holder thereof upon the happening of any contingency beyond the control of the
issuer unless such contingency has occurred).
"Subsidiary" of any Person means any corporation, association,
----------
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such
Person, (ii) such Person and one or more Subsidiaries of such Person or (iii)
one or more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i)
--------------------------
investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (ii) investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States, any State thereof or any foreign country
recognized by the United States having capital, surplus and undivided profits
aggregating in excess of $500,000,000 (or the Dollar Equivalent thereof) and
whose long-term debt is rated "A" or higher according to Moody's Investors
Service, Inc. (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act)), (iii) repurchase obligations with a term of not more than 7
days for underlying securities of the types described in clause (i) above
entered into with a bank meeting the qualifications described in clause (ii)
above and (iv) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an Affiliate
of the Company) organized and in existence under the laws of the United States
or any foreign country recognized by the United States with a rating at the time
as of which any investment therein is made of "P-1" (or higher) according to
Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard and
Poor's Corporation.
"Trade Payables" means, with respect to any Person, any accounts
--------------
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
of such Person in connection with the acquisition of goods or services.
"Trustee" initially means and any other Person or Persons
-------
appointed as such from time to time
<PAGE>
15
pursuant to Section 7.08, and, subject to the provisions of Article VII,
includes its or their successors and assigns. If at any time there is more than
one such Person, "Trustee" as used with respect to the Debt Securities of any
series shall mean the Trustee with respect to the Debt Securities of that
series.
"Trust Indenture Act" (except as herein otherwise expressly provided)
-------------------
means the Trust Indenture Act of 1939 as in force at the date of this Indenture
as originally executed and, to the extent required by law, as amended.
"United States" means the United States of America (including the
-------------
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
-------------------
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more members of which is, for United States Federal income
tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" means securities that are (x) direct
---------------------------
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof.
"Yield to Maturity" means the yield to maturity, calculated at the
-----------------
time of issuance of a series of Debt Securities, or, if applicable, at the most
recent redetermination of interest on such series and calculated in accordance
with accepted financial practice.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
This Indenture is subject to the mandatory provisions of the Trust Indenture Act
which are incorporated by reference in and made a part of this Indenture. The
following Trust Indenture Act terms have the following meanings:
"indenture securities" means the Debt Securities.
<PAGE>
16
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Debt Securities.
All other Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, reference to another statute or defined by
rules of the Securities and Exchange Commission have the meanings assigned to
them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
----------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) if the applicable series of Debt Securities are subordinated
pursuant to Article XII, unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
<PAGE>
17
ARTICLE II
Debt Securities
---------------
SECTION 2.01. Forms Generally. The Debt Securities and Coupons, if
----------------
any, of each series shall be in substantially the form established without the
approval of any Holder by or pursuant to a resolution of the Board of Directors
or in one or more Indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
the Company may deem appropriate (and, if not contained in a supplemental
Indenture entered into in accordance with Article IX, as are not prohibited by
the provisions of this Indenture) or as may be required or appropriate to comply
with any law or with any rules made pursuant thereto or with any rules of any
securities exchange on which such series of Debt Securities may be listed, or to
conform to general usage, or as may, consistently herewith, be determined by the
officers executing such Debt Securities and Coupons, as evidenced by their
execution of the Debt Securities and Coupons.
The definitive Debt Securities of each series and Coupons, if any,
shall be printed, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers executing such
Debt Securities and Coupons, as evidenced by their execution of such Debt
Securities and Coupons.
Each Bearer Security and each Coupon shall bear a legend substantially
to the following effect: "Any United States Person who holds this obligation
will be subject to limitations under the United States Federal income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code."
SECTION 2.02. Form of Trustee's Certificate of Authentication. The
------------------------------------------------
Trustee's Certificate of Authentication on all Debt Securities authenticated by
the Trustee shall be in substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
<PAGE>
18
,
As Trustee
By .....................
Authorized Signature
SECTION 2.03. Principal Amount; Issuable in Series. The aggregate
-------------------------------------
principal amount of Debt Securities which may be issued, executed,
authenticated, delivered and outstanding under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall
be established, without the approval of any Holders, in or pursuant to a
resolution of the Board of Directors and set forth in an Officers' Certificate,
or established in one or more Indentures supplemental hereto, prior to the
issuance of Debt Securities of any series any or all of the following:
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of the series from all other Debt
Securities);
(2) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to this Article II);
(3) the date or dates on which the principal and premium, if any, of
the Debt Securities of the series are payable;
(4) the rate or rates (which may be fixed or variable) at which the
Debt Securities of the series shall bear interest, if any, or the method of
determining such rate or rates, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest shall be
payable, or the method by which such date will be determined, in the case
of Registered Securities, the record dates for the determination of Holders
thereof to whom such interest is payable; and the basis upon which interest
will be calculated if other than that of a 360-day year of twelve thirty-
day months;
(5) the place or places, if any, in addition to or instead of the
corporate trust office of the Trustee (in the case of Registered
Securities) or the principal
<PAGE>
19
London office of the Trustee (in the case of Bearer Securities), where the
principal of, and premium, if any, and interest on, Debt Securities of the
series shall be payable;
(6) the price or prices at which, the period or periods within which
and the terms and conditions upon which Debt Securities of the series may
be redeemed, in whole or in part, at the option of the Company or
otherwise;
(7) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer
Securities are to be issued, whether Coupons will be attached thereto,
whether Bearer Securities of the series may be exchanged for Registered
Securities of the series and the circumstances under which and the places
at which any such exchanges, if permitted, may be made;
(8) if any Debt Securities of the series are to be issued as Bearer
Securities or as one or more Global Securities representing individual
Bearer Securities of the series, (x) whether the provisions of Sections
3.02 and 4.06 or other provisions for payment of additional interest or tax
redemptions shall apply and, if other provisions shall apply, such other
provisions; (y) whether interest in respect of any portion of a temporary
Bearer Security of the series (delivered pursuant to Section 2.08) payable
in respect of any interest payment date prior to the exchange of such
temporary Bearer Security for definitive Bearer Securities of the series
shall be paid to any clearing organization with respect to the portion of
such temporary Bearer Security held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which
any such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such interest
payment date; and (z) the terms upon which a temporary Bearer Security may
be exchanged for one or more definitive Bearer Securities of the series;
(9) the obligation, if any, of the Company to redeem, purchase or
repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof, and the price or
prices at which and the period or periods within which and the terms and
conditions upon which Debt Securities
<PAGE>
20
of the series shall be redeemed, purchased or repaid, in whole or in part,
pursuant to such obligations;
(10) the terms, if any, upon which the Debt Securities of the series
may be convertible into or exchanged for Common Stock, Preferred Stock
(which may be represented by depositary shares), other Debt Securities or
warrants for Common Stock, Preferred Stock or Indebtedness or other
securities of any kind of the Company or any other obligor and the terms
and conditions upon which such conversion or exchange shall be effected,
including the initial conversion or exchange price or rate, the conversion
or exchange period and any other provision in addition to or in lieu of
those described herein;
(11) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(12) if the amount of principal of or any premium or interest on Debt
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined;
(13) if the principal amount payable at the Stated Maturity of Debt
Securities of the series will not be determinable as of any one or more
dates prior to such Stated Maturity, the amount which will be deemed to be
such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the Stated Maturity or which will be deemed to be outstanding as
of any such date (or, in any such case, the manner in which such deemed
principal amount is to be determined); and the manner of determining the
equivalent thereof in the currency of the United States of America for
purposes of the definition of Dollar Equivalent;
(14) any changes or additions to Article XI, including the addition of
additional covenants that may be subject to the covenant defeasance option
pursuant to Section 11.02(b)(ii);
(15) if other than such coin or Currency of the United States as at
the time of payment is legal tender for payment of public and private
debts, the coin or Currency or Currencies or units of two or more
Currencies in which payment of the principal of, and
<PAGE>
21
premium, if any, and interest on, Debt Securities of the series shall be
payable;
(16) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 6.01 or provable in bankruptcy pursuant to Section 6.02;
(17) the terms, if any, of the transfer, mortgage, pledge or
assignment as security for the Debt Securities of the series of any
properties, assets, moneys, proceeds, securities or other collateral,
including whether certain provisions of the Trust Indenture Act are
applicable and any corresponding changes to provisions of this Indenture as
currently in effect;
(18) any addition to or change in the Events of Default with respect
to the Debt Securities of the series and any change in the right of the
Trustee or the Holders to declare the principal of, and premium and
interest on, such Debt Securities due and payable;
(19) if the Debt Securities of the series shall be issued in whole or
in part in the form of a Global Security or Securities, the terms and
conditions, if any, upon which such Global Security or Securities may be
exchanged in whole or in part for other individual Debt Securities in
definitive registered form; and the Depositary for such Global Security or
Securities and the form of any legend or legends to be borne by any such
Global Security or Securities in addition to or in lieu of the legend
referred to in Section 2.15;
(20) any trustees, authenticating or paying agents, transfer agents or
registrars;
(21) the applicability of, and any addition to or change in the
covenants and definitions currently set forth in this Indenture or in the
terms currently set forth in Article X, including conditioning any merger,
conveyance, transfer or lease permitted by Article X upon the satisfaction
of an Indebtedness coverage standard by the Company and Successor Company
(as defined in Article X);
(22) the terms, if any, of any Guarantee of the payment of principal
of, and premium, if any, and interest on, Debt Securities of the series and
any
<PAGE>
22
corresponding changes to the provisions of this Indenture as currently
in effect;
(23) the subordination, if any, of the Debt Securities of the series
pursuant to Article XII and any changes or additions to Article XII;
(24) with regard to Debt Securities of the series that do not bear
interest, the dates for certain required reports to the Trustee; and
(25) any other terms of the Debt Securities of the series (which terms
shall not be prohibited by the provisions of this Indenture).
All Debt Securities of any one series and the Coupons, if any,
appertaining thereto shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to such resolution of the
Board of Directors and as set forth in such Officers' Certificate or in any such
Indenture supplemental hereto.
SECTION 2.04. Execution of Debt Securities. The Debt Securities and
-----------------------------
the Coupons, if any, shall be signed on behalf of the Company by its Chairman of
the Board, its President or a Vice President and by its Secretary, an Assistant
Secretary, a Treasurer or an Assistant Treasurer. Such signatures upon the Debt
Securities and Coupons may be the manual or facsimile signatures of the present
or any future such authorized officers and may be imprinted or otherwise
reproduced on the Debt Securities and Coupons. The seal of the Company, if any,
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Debt Securities and Coupons.
Only such Debt Securities and Coupons as shall bear thereon a
certificate of authentication substantially in the form hereinbefore recited,
signed manually by the Trustee, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Debt Security or Coupon executed by the Company shall be
conclusive evidence that the Debt Security or Coupon so authenticated has been
duly authenticated and delivered hereunder.
In case any officer of the Company who shall have signed any of the
Debt Securities or Coupons shall cease to be such officer before the Debt
Securities or Coupons so signed shall have been authenticated and delivered by
the Trustee, or disposed of by the Company, such Debt Securities or Coupons
nevertheless may be authenticated and delivered
<PAGE>
23
or disposed of as though the Person who signed such Debt Securities or Coupons
had not ceased to be such officer of the Company; and any Debt Security or
Coupon may be signed on behalf of the Company by such Persons as, at the actual
date of the execution of such Debt Security or Coupon, shall be the proper
officers of the Company, although at the date of such Debt Security or Coupon or
of the execution of this Indenture any such Person was not such officer.
SECTION 2.05. Authentication and Delivery of Debt Securities. At any
-----------------------------------------------
time and from time to time after the execution and delivery of this Indenture,
the Company may deliver Debt Securities, with appropriate Coupons, if any, of
any series executed by the Company to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver said Debt Securities and
Coupons to or upon a Company Order. In authenticating such Debt Securities and
Coupons, and accepting the additional responsibilities under this Indenture in
relation to such Debt Securities and Coupons, if any, the Trustee shall be
entitled to receive, and (subject to Section 7.01) shall be fully protected in
relying upon:
(1) a copy of any resolution or resolutions of the Board of Directors,
certified by the Secretary or Assistant Secretary of the Company,
authorizing the terms of issuance of any series of Debt Securities and
Coupons;
(2) an executed supplemental Indenture, if any;
(3) an Officers' Certificate; and
(4) an opinion of Counsel prepared in accordance with Section 13.05
which shall also state:
(a) that the form of such Debt Securities and Coupons has been
established by or pursuant to a resolution of the Board of Directors
or by a supplemental Indenture as permitted by Section 2.01 in
conformity with the provisions of this Indenture;
(b) that the terms of such Debt Securities and Coupons have been
established by or pursuant to a resolution of the Board of Directors
or by a supplemental Indenture as permitted by Section 2.03 in
conformity with the provisions of this Indenture;
<PAGE>
24
(c) that such Debt Securities and Coupons, when authenticated and
delivered by the Trustee and issued by the Company in the manner and
subject to any conditions specified in such opinion of Counsel, will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability;
(d) that the Company has the corporate power to issue such Debt
Securities and Coupons and has duly taken all necessary corporate
action with respect to such issuance;
(e) that the issuance of such Debt Securities and Coupons will
not contravene the charter or by-laws of the Company or result in any
violation of any of the terms or provisions of any law or regulation
or of any indenture, mortgage or other agreement known to such counsel
by which the Company is bound;
(f) that authentication and delivery of such Debt Securities and
Coupons and the execution and delivery of any supplemental Indenture
will not violate the terms of this Indenture; and
(g) such other matters as the Trustee may reasonably request.
Such Opinion of Counsel need express no opinion as to whether a court
in the United States would render a money judgment in a currency other than that
of the United States.
The Trustee shall have the right to decline to authenticate and
deliver any Debt Securities or Coupons under this Section 2.05 if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
or if the Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors, trustees or vice presidents shall
determine that such action would expose the Trustee to personal liability to
existing Holders.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Debt
<PAGE>
25
Securities and Coupons, if any, of any series. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Debt Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, paying agent or agent
for service of notices and demands.
Unless otherwise provided in the form of Debt Security for any series,
each Debt Security shall be dated the date of its authentication.
SECTION 2.06. Denomination of Debt Securities. Unless otherwise
--------------------------------
provided in the form of Debt Security for any series, the Debt Securities of
each series shall be issuable only as Registered Securities in such
denominations as shall be specified or contemplated by Section 2.03. In the
absence of any such specification with respect to the Debt Securities of any
series, the Debt Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 2.07. Registration of Transfer and Exchange. (a) The
--------------------------------------
Company shall keep or cause to be kept a register for each series of Registered
Securities issued hereunder (hereinafter collectively referred to as the "Debt
Security Register"), in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and the transfer of Registered Securities as in this Article II
provided. At all reasonable times the Debt Security Register shall be open for
inspection by the Trustee. Subject to Section 2.15, upon due presentment for
registration of transfer of any Registered Security at any office or agency to
be maintained by the Company in accordance with the provisions of Section 4.02,
the Company shall execute and the Trustee shall authenticate and deliver in the
name of the transferee or transferees a new Registered Security or Registered
Securities of authorized denominations for a like aggregate principal amount.
In no event may Registered Securities, including Registered Securities received
in exchange for Bearer Securities, be exchanged for Bearer Securities.
Unless and until otherwise determined by the Company by resolution of
the Board of Directors, the register of the Company for the purpose of
registration, exchange or registration of transfer of the Registered Securities
shall be kept at the corporate trust office of
<PAGE>
26
the Trustee and, for this purpose, the Trustee shall be designated "Registrar".
Registered Securities of any series (other than a Global Security,
except as set forth below) may be exchanged for a like aggregate principal
amount of Registered Securities of the same series of other authorized
denominations. Subject to Section 2.15, Registered Securities to be exchanged
shall be surrendered at the office or agency to be maintained by the Company as
provided in Section 4.02, and the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor the Registered Security or
Registered Securities which the Holder making the exchange shall be entitled to
receive.
At the option of the Holder of Bearer Securities of any series, except
as otherwise specified as contemplated by Section 2.03(8) or 2.03(19) with
respect to a Global Security representing Bearer Securities, Bearer Securities
of such series may be exchanged for Registered Securities (if the Debt
Securities of such series are issuable as Registered Securities) or Bearer
Securities of the same series, of any authorized denomination or denominations,
of like tenor and aggregate principal amount, upon surrender of the Bearer
Securities to be exchanged at the office or agency of the Company maintained for
such purpose, with all unmatured Coupons and all matured Coupons in Default
thereto appertaining; provided, however, that delivery of a Bearer Security
-------- -------
shall occur only outside the United States. If such Holder is unable to produce
any such unmatured Coupon or Coupons or matured Coupon or Coupons in Default,
such exchange may be effected if such Holder's Bearer Securities are accompanied
by payment in funds acceptable to the Company and the Trustee in an amount equal
to the face amount of such missing Coupon or Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save each
of them and any paying agent harmless. If thereafter such Holder shall
surrender to any paying agent any such missing Coupon in respect of which such a
payment shall have been made, such Holder shall be entitled to receive the
amount of such payment; provided, however, that, except as otherwise provided in
-------- -------
Section 2.12, interest represented by Coupons shall be payable only upon
presentation and surrender of those Coupons at an office or agency located
outside the United States.
Whenever any Debt Securities are so surrendered for exchange, the
Company shall execute, and the Trustee
<PAGE>
27
shall authenticate and deliver, the Debt Securities that the Holder making the
exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States Federal
income tax laws and regulations applicable to Debt Securities in effect at the
time of such exchange.
(b) All Registered Securities presented or surrendered for
registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed or be accompanied by a
written instrument or instruments of transfer, in form satisfactory to the
Company, the Trustee and the Registrar, duly executed by the Registered Holder
or his attorney duly authorized in writing.
All Debt Securities issued in exchange for or upon transfer of Debt
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture as the Debt
Securities surrendered for such exchange or transfer.
No service charge shall be made for any exchange or registration of
transfer of Debt Securities (except as provided by Section 2.09), but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto, other than those
expressly provided in this Indenture to be made at the Company's own expense or
without expense or without charge to the Holders.
The Company shall not be required (a) to issue, register the transfer
of or exchange any Debt Securities for a period of 15 days next preceding any
mailing of notice of redemption of Debt Securities of such series or (b) to
register the transfer of or exchange any Debt Securities selected, called or
being called for redemption; provided, however, that, if specified pursuant to
-------- -------
Section 2.03, any Bearer Securities of any series that are exchangeable for
Registered Securities and that are called for redemption pursuant to Section
3.02 may, to the extent permitted by applicable law, be exchanged for one or
more Registered Securities of such series during the period preceding the
redemption date therefor.
Prior to the due presentation for registration of transfer of any Debt
Security, the Company, the Trustee, any paying agent or any Registrar may deem
and treat the Person in whose name a Debt Security is registered as the absolute
<PAGE>
28
owner of such Debt Security for the purpose of receiving payment of principal
of, and premium, if any, and interest on, such Debt Security and for all other
purposes whatsoever, whether or not such Debt Security is overdue, and none of
the Company, the Trustee, any paying agent or Registrar shall be affected by
notice to the contrary.
None of the Company, the Trustee, any agent of the Trustee, any paying
agent or any Registrar will have any responsibility or liability for any aspect
of the records relating to, or payments made on account of, beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 2.08. Temporary Debt Securities. Pending the preparation of
--------------------------
definitive Debt Securities of any series, the Company may execute and the
Trustee shall authenticate and deliver temporary Debt Securities (printed,
lithographed, photocopied, typewritten or otherwise produced) of any authorized
denomination, and substantially in the form of the definitive Debt Securities in
lieu of which they are issued, in registered form or, if authorized, in bearer
form with one or more Coupons or without Coupons, and with such omissions,
insertions and variations as may be appropriate for temporary Debt Securities
and Coupons, all as may be determined by the Company with the concurrence of the
Trustee. Temporary Debt Securities and Coupons may contain such reference to
any provisions of this Indenture as may be appropriate. Every temporary Debt
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Debt Securities.
If temporary Debt Securities of any series are issued, the Company
will cause definitive Debt Securities of such series to be prepared without
unreasonable delay. Except as otherwise specified as contemplated by Section
2.03(8)(z) with respect to a series of Debt Securities issuable as Bearer
Securities or as one or more Global Securities representing individual Bearer
Securities of the series, (a) after the preparation of definitive Debt
Securities of such series, the temporary Debt Securities of such series shall be
exchangeable for definitive Debt Securities of such series upon surrender of the
temporary Debt Securities of such series at the office or agency of the Company
at a Place of Payment for such series, without charge to the Holder thereof,
except as provided in Section 2.07 in connection with a transfer and except that
a Person receiving definitive Bearer Securities shall bear the
<PAGE>
29
cost of insurance, postage, transportation and the like unless otherwise
specified pursuant to Section 2.03, and (b) upon surrender for cancelation of
any one or more temporary Debt Securities of any series (accompanied by any
unmatured Coupons appertaining thereto), the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Debt Securities of the same series of authorized
denominations and of like tenor; provided, however, that no definitive Bearer
-------- -------
Security shall be delivered in exchange for a temporary Registered Security; and
provided, further, however, that delivery of a Global Security representing
- -------- ------- -------
individual Bearer Securities or a Bearer Security shall occur only outside the
United States. Until so exchanged, temporary Debt Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities of such series, except as otherwise specified as
contemplated by Section 2.03(8)(y) with respect to the payment of interest on
Global Securities in temporary form.
Unless otherwise specified pursuant to Section 2.03, the Company will
execute and deliver each definitive Global Security representing individual
Bearer Securities and each Bearer Security to the Trustee at its principal
office in London or such other place outside the United States specified
pursuant to Section 2.03.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Debt Securities represented
thereby pursuant to Section 2.07 or this Section 2.08, the temporary Global
Security shall be endorsed by the Trustee to reflect the reduction of the
principal amount evidenced thereby, whereupon the principal amount of such
temporary Global Security shall be reduced for all purposes by the amount to be
exchanged and endorsed.
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen Debt Securities.
-----------------------------------------------------
If (i) any mutilated Debt Security or any mutilated Coupon with the Coupon
Security to which it appertains (and all unmatured Coupons attached thereto) is
surrendered to the Trustee at its corporate trust office (in the case of
Registered Securities) or at its principal London office (in the case of Bearer
Securities) or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debt Security or any
Coupon, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them and any paying agent
harmless, and neither the Company nor the Trustee receives
<PAGE>
30
notice that such Debt Security or Coupon has been acquired by a bona fide
purchaser, then the Company shall execute and, upon a Company Order, the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Debt Security or in exchange for the Coupon
Security to which such mutilated, destroyed, lost or stolen Coupon appertained,
a new Debt Security of the same series of like tenor, form, terms and principal
amount, bearing a number not contemporaneously Outstanding, and, in the case of
a Coupon Security, with such Coupons attached thereto that neither gain nor loss
in interest shall result from such exchange or substitution. Upon the issuance
of any substituted Debt Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith. In case any Debt
Security or Coupon which has matured or is about to mature or which has been
called for redemption shall become mutilated or be destroyed, lost or stolen,
the Company may, instead of issuing a substituted Debt Security or Coupon, pay
or authorize the payment of the same (without surrender thereof except in the
case of a mutilated Debt Security or Coupon) if the applicant for such payment
shall furnish the Company and the Trustee with such security or indemnity as
either may require to save it harmless from all risk, however remote, and, in
case of destruction, loss or theft, evidence to the satisfaction of the Company
and the Trustee of the destruction, loss or theft of such Debt Security or
Coupon and of the ownership thereof; provided, however, that payment of
-------- -------
principal of, and premium, if any, and interest on, Bearer Securities or Coupons
shall, except as otherwise provided in Section 2.12, be payable only at an
office or agency located outside the United States.
Every substituted Debt Security of any series, with its Coupons, if
any, issued pursuant to the provisions of this Section 2.09 by virtue of the
fact that any Debt Security or Coupon is destroyed, lost or stolen shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Debt Security or Coupon shall be found at
any time, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Debt Securities of that series and
Coupons, if any, duly issued hereunder. All Debt Securities and Coupons, if
any, shall be held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debt Securities or Coupons, and shall
preclude any and all other rights or remedies, notwithstanding any law or
statute existing or hereafter enacted to the contrary with
<PAGE>
31
respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 2.10. Cancelation of Surrendered Debt Securities. All Debt
-------------------------------------------
Securities surrendered for payment, redemption, registration of transfer or
exchange and all Coupons surrendered for payment or exchange shall, if
surrendered to the Company or any paying agent or a Registrar, be delivered to
the Trustee for cancelation by it, or if surrendered to the Trustee, shall be
canceled by it, and no Debt Securities or Coupons shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Indenture. All canceled Debt Securities and Coupons held by the Trustee shall
be destroyed (subject to the record retention requirements of the Exchange Act)
and certification of their destruction delivered to the Company, unless
otherwise directed. On request of the Company, the Trustee shall deliver to the
Company canceled Debt Securities and Coupons held by the Trustee. If the
Company shall acquire any of the Debt Securities or Coupons, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented thereby unless and until the same are delivered or
surrendered to the Trustee for cancelation. The Company may not issue new Debt
Securities or Coupons to replace Debt Securities or Coupons it has redeemed,
paid or delivered to the Trustee for cancelation.
SECTION 2.11. Provisions of the Indenture and Debt Securities for the
-------------------------------------------------------
Sole Benefit of the Parties and the Holders. Nothing in this Indenture or in
- --------------------------------------------
the Debt Securities or Coupons, expressed or implied, shall give or be construed
to give to any Person, other than the parties hereto, the Holders or any
Registrar or paying agent, any legal or equitable right, remedy or claim under
or in respect of this Indenture, or under any covenant, condition or provision
herein contained; all its covenants, conditions and provisions being for the
sole benefit of the parties hereto, the Holders and any Registrar and paying
agents.
SECTION 2.12. Payment of Interest; Interest Rights Preserved. (a)
-----------------------------------------------
Interest on any Registered Security that is payable and is punctually paid or
duly provided for on any interest payment date shall be paid to the Person in
whose name such Registered Security is registered at the close of business on
the regular record date for such interest notwithstanding the cancelation of
such Registered Security upon any transfer or exchange subsequent to the regular
record date. In case a Coupon Security of any series is surrendered in exchange
for a Registered Security of such series after the close of business (at an
office or
<PAGE>
32
agency in a Place of Payment for such series) on any regular record date and
before the opening of business (at such office or agency) on the next succeeding
interest payment date, such Coupon Security shall be surrendered without the
Coupon relating to such interest payment date and interest will not be payable
on such interest payment date in respect of the Registered Security issued in
exchange for such Coupon Security, but will be payable only to the Holder of
such Coupon when due in accordance with the provisions of this Indenture.
Payment of interest on Registered Securities shall be made at the corporate
trust office of the Trustee (except as otherwise specified pursuant to Section
2.03), or at the option of the Company, by check mailed to the address of the
Person entitled thereto as such address shall appear in the Debt Security
Register or, if provided pursuant to Section 2.03 and in accordance with
arrangements satisfactory to the Trustee, at the option of the Registered Holder
by wire transfer to an account designated by the Registered Holder.
(b) No interest shall be payable with respect to a Bearer Security or
Coupon unless such certification requirements as are specified pursuant to
Section 2.03(8)(z) are satisfied with respect to such Bearer Security or Coupon.
Interest on any Coupon Security that is payable and is punctually paid or duly
provided for on any interest payment date shall be paid to the Holder of the
Coupon that has matured on such interest payment date upon surrender of such
Coupon on such interest payment date at the principal London office of the
Trustee or at such other Place of Payment outside the United States specified
pursuant to Section 2.03.
Interest on any Bearer Security (other than a Coupon Security) that is
payable and is punctually paid or duly provided for on any interest payment date
shall be paid to the Holder of the Bearer Security upon presentation of such
Bearer Security and notation thereon on such interest payment date at the
principal London office of the Trustee or at such other Place of Payment outside
the United States specified pursuant to Section 2.03.
Unless otherwise specified pursuant to Section 2.03, at the direction
of the Holder of any Bearer Security or Coupon payable in Dollars, and subject
to applicable laws and regulations, payments in respect of such Bearer Security
or Coupon will be made by check drawn on a bank in New York, New York or, in
accordance with arrangements satisfactory to the Trustee, by wire transfer to a
Dollar account maintained by such Holder with a bank outside the United States.
If such payment at the offices
<PAGE>
33
of all paying agents outside the United States becomes illegal or is effectively
precluded because of the imposition of exchange controls or similar restrictions
on the full payment or receipt of such amounts in Dollars, then, to the extent
permitted by United States Federal tax law, the Company will appoint an office
or agent in the United States at which such payment may be made. Unless
otherwise specified pursuant to Section 2.03, at the direction of the Holder of
any Bearer Security or Coupon payable in a Foreign Currency, payment on such
Bearer Security or Coupon will be made by a check drawn on a bank outside the
United States or, in accordance with arrangements satisfactory to the Trustee,
by wire transfer to an appropriate account maintained by such Holder outside the
United States. Except as provided in this paragraph, no payment on any Bearer
Security or Coupon will be made by mail to an address in the United States or by
transfer to an account in the United States.
(c) Subject to the foregoing provisions of this Section 2.12 and
Section 2.17, each Debt Security of a particular series delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any
other Debt Security of the same series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debt
Security.
SECTION 2.13. Securities Denominated in Foreign Currencies. (a)
---------------------------------------------
Except as otherwise specified pursuant to Section 2.03 for Bearer Securities of
any series, payment of the principal of, and premium, if any, and interest on,
Bearer Securities of such series denominated in any Currency will be made in
such Currency.
(b) Except as otherwise specified pursuant to Section 2.03 for
Registered Securities of any series, payment of the principal of, and premium,
if any, and interest on, Registered Securities of such series will be made in
Dollars.
(c) For the purposes of calculating the principal amount of Debt
Securities of any series denominated in a Foreign Currency or in units of two or
more Foreign Currencies (including European Currency Units) for any purpose
under this Indenture, the principal amount of such Debt Securities at any time
Outstanding shall be deemed to be the Dollar Equivalent of such principal amount
as of the date of any such calculation.
In the event any Foreign Currency or currencies or units of two or
more Currencies in which any payment with
<PAGE>
34
respect to any series of Debt Securities may be made ceases to be a freely
convertible Currency on United States Currency markets, for any date thereafter
on which payment of principal of, or premium, if any, or interest on, the Debt
Securities of a series is due, the Company shall select the Currency of payment
for use on such date, all as provided in the Debt Securities of such series. In
such event, the Company shall, as provided in the Debt Securities of such
series, notify the Trustee of the Currency which it has selected to constitute
the funds necessary to meet the Company's obligations on such payment date and
of the amount of such Currency to be paid. Such amount shall be determined as
provided in the Debt Securities of such series. The payment to the Trustee with
respect to such payment date shall be made by the Company solely in the Currency
so selected.
SECTION 2.14. Wire Transfers. Notwithstanding any other provision to
---------------
the contrary in this Indenture, the Company may make any payment of moneys
required to be deposited with the Trustee on account of principal of, or
premium, if any, or interest on, the Debt Securities (whether pursuant to
optional or mandatory redemption payments, interest payments or otherwise) by
wire transfer in immediately available funds to an account designated by the
Trustee on or before the date such moneys are to be paid to the Holders of the
Debt Securities in accordance with the terms hereof.
SECTION 2.15. Securities Issuable in the Form of a Global Security.
-----------------------------------------------------
(a) If the Company shall establish pursuant to Sections 2.01 and 2.03 that the
Debt Securities of a particular series are to be issued in whole or in part in
the form of one or more Global Securities, then the Company shall execute and
the Trustee or its agent shall, in accordance with Section 2.05, authenticate
and deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Debt Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
an Officers' Certificate, (ii) shall be registered in the name of the Depositary
for such Global Security or Securities or its nominee, (iii) shall be delivered
by the Trustee or its agent to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for the individual Debt
Securities represented hereby, this Global Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary
<PAGE>
35
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary, or such other legend as may then be required by the Depositary for
such Global Security or Securities."
(b) Notwithstanding any other provision of this Section 2.15 or of
Section 2.07 to the contrary, and subject to the provisions of paragraph (c)
below, unless the terms of a Global Security expressly permit such Global
Security to be exchanged in whole or in part for definitive Debt Securities in
registered form, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.07, only by the Depositary to a nominee
of the Depositary for such Global Security, or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary, or by the Depositary or a
nominee of the Depositary to a successor Depositary for such Global Security
selected or approved by the Company, or to a nominee of such successor
Depositary.
(c) (i) If at any time the Depositary for a Global Security or
Securities notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or Securities or if at any time the
Depositary for the Debt Securities for such series shall no longer be eligible
or in good standing under the Exchange Act or other applicable statute, rule or
regulation, the Company shall appoint a successor Depositary with respect to
such Global Security or Securities. If a successor Depositary for such Global
Security or Securities is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility, the Company
shall execute, and the Trustee or its agent, upon receipt of a Company Order for
the authentication and delivery of such individual Debt Securities of such
series in exchange for such Global Security, will authenticate and deliver,
individual Debt Securities of such series of like tenor and terms in definitive
form in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security or Securities.
(ii) The Company may at any time and in its sole discretion determine
that the Debt Securities of any series or portion thereof issued or issuable in
the form of one or more Global Securities shall no longer be represented by such
Global Security or Securities. In such event the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
individual Debt Securities of such series in exchange in whole or in part for
such Global Security, will authenticate
<PAGE>
36
and deliver individual Debt Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of such series or portion thereof in exchange for such Global Security or
Securities.
(iii) If specified by the Company pursuant to Sections 2.01 and 2.03
with respect to Debt Securities issued or issuable in the form of a Global
Security, the Depositary for such Global Security may surrender such Global
Security in exchange in whole or in part for individual Debt Securities of such
series of like tenor and terms in definitive form on such terms as are
acceptable to the Company, the Trustee and such Depositary. Thereupon the
Company shall execute, and the Trustee or its agent upon receipt of a Company
Order for the authentication and delivery of definitive Debt Securities of such
series shall authenticate and deliver, without service charge, (1) to each
Person specified by such Depositary a new Debt Security or Securities of the
same series of like tenor and terms and of any authorized denomination as
requested by such Person in aggregate principal amount equal to and in exchange
for such Person's beneficial interest in the Global Security; and (2) to such
Depositary a new Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of Debt
Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Debt Securities. In case a Coupon Security
of any series is surrendered in exchange for a Registered Security of such
series after the close of business (at an office or agency in a Place of Payment
for such series) on any special record date and before the opening of business
(at such office or agency) on the related proposed date of payment of Defaulted
Interest, such Coupon Security shall be surrendered without the Coupon relating
to such proposed date of payment and Defaulted Interest will not be payable on
such proposed date of payment in respect of the Registered Security issued in
exchange for such Coupon Security, but will be payable only to the Holder of
such Coupon when due in accordance with the provisions of this Indenture. Upon
the exchange of the entire principal amount of a Global Security for individual
Debt Securities, such Global Security shall be canceled by the Trustee or its
agent. Except as provided in the preceding paragraph, Registered Securities
issued in exchange for a Global Security pursuant to this Section 2.15 shall be
registered
<PAGE>
37
in such names and in such authorized denominations as the Depositary
for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or the Registrar. The
Trustee or the Registrar shall deliver such Registered Securities to the Persons
in whose names such Registered Securities are so registered.
(v) Payments in respect of the principal of and interest on any Debt
Securities registered in the name of the Depositary or its nominee will be
payable to the Depositary or such nominee in its capacity as the registered
owner of such Global Security. The Company and the Trustee may treat the person
in whose names the Debt Securities, including the Global Security, are
registered as the owner thereof for the purpose of receiving such payments and
for any and all other purposes whatsoever. None of the Company, the Trustee,
any Registrar, the paying agent or any agent of the Company or the Trustee will
have any responsibility or liability for (a) any aspect of the records relating
to or payments made on account of the beneficial ownership interests of the
Global Security by the Depositary or its nominee or any of the Depositary's
direct or indirect participants, or for maintaining, supervising or reviewing
any records of the Depositary, its nominee or any of its direct or indirect
participants relating to the beneficial ownership interests of the Global
Security, (b) the payments to the beneficial owners of the Global Security of
amounts paid to the Depositary or its nominee, or (c) any other matter relating
to the actions and practices of the Depositary, its nominee or any of its direct
or indirect participants. None of the Company, the Trustee or any such agent
will be liable for any delay by the Depositary, its nominee, or any of its
direct or indirect participants in identifying the beneficial owners of the Debt
Securities, and the Company and the Trustee may conclusively rely on, and will
be protected in relying on, instructions from the Depositary or its nominee for
all purposes (including with respect to the registration and delivery, and the
respective principal amounts, of the Debt Securities to be issued).
The Trustee shall deliver individual Bearer Securities issued in
exchange for a Global Security pursuant to this Section 2.15 to the Persons and
in such authorized denominations as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee; provided, however, that individual Bearer Securities
-------- -------
shall be delivered in exchange for a Global Security only in accordance with the
procedures as may be specified pursuant to Section 2.03.
<PAGE>
38
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States Federal
income tax laws and regulations applicable to debt Securities in effect at the
time of such exchange.
SECTION 2.16. Medium Term Securities. Notwithstanding any contrary
-----------------------
provision herein, if all Debt Securities of a series are not to be originally
issued at one time, it shall not be necessary for the Company to deliver to the
Trustee an Officers' Certificate, resolutions of the Board of Directors,
supplemental Indenture, Opinion of Counsel or written order or any other
document otherwise required pursuant to Section 2.01, 2.03, 2.05 or 13.05 at or
prior to the time of authentication of each Debt Security of such series if such
documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first such Debt Security of such
series to be issued; provided, that any subsequent request by the Company to the
--------
Trustee to authenticate Debt Securities of such series upon original issuance
shall constitute a representation and warranty by the Company that, as of the
date of such request, the statements made in the Officers' Certificate delivered
pursuant to Section 2.05 or 13.05 shall be true and correct as if made on such
date and that the Opinion of Counsel delivered at or prior to such time of
authentication of an original issuance of Debt Securities shall specifically
state that it shall relate to all subsequent issuances of Debt Securities of
such series that are identical to the Debt Securities issued in the first
issuance of Debt Securities of such series.
A Company Order delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph, may provide that Debt
Securities which are the subject thereof will be authenticated and delivered by
the Trustee or its agent on original issue from time to time upon the telephonic
or written order of Persons designated in such written order (any such
telephonic instructions to be promptly confirmed in writing by such Person) and
that such Persons are authorized to determine, consistent with the Officers'
Certificate, supplemental Indenture or resolution of the Board of Directors
relating to such written order, such terms and conditions of such Debt
Securities as are specified in such Officers' Certificate, supplemental
Indenture or such resolution.
SECTION 2.17. Defaulted Interest. (a) Any interest on any Debt
-------------------
Security of a particular series which is payable, but is not punctually paid or
duly provided for, on the dates and in the manner provided in the Debt
<PAGE>
39
Securities of such series and in this Indenture (herein called "Defaulted
Interest") shall, if such Debt Security is a Registered Security, forthwith
cease to be payable to the Registered Holder thereof on the relevant record date
by virtue of having been such Registered Holder, and such Defaulted Interest may
be paid by the Company, at its election in each case, as provided in clause (i)
or (ii) below:
(i) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of such series 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 such Registered Security of
such series 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 therefor to be mailed,
first-class postage pre-paid, to each Holder thereof at its address as it
appears in the Security Register, not less than 10 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 the Persons in whose names the
Registered Securities of such series are registered at the close of
business on such special record date. In case a Coupon Security of any
such series is surrendered in exchange for a Registered Security of such
series after the close of business (at an office or agency in a Place of
Payment for such series) on any special record date and before the opening
of business (at such office or agency) on the
<PAGE>
40
related proposed date of payment of Defaulted Interest, such Coupon
Security shall be surrendered without the Coupon relating to such proposed
date of payment and Defaulted Interest will not be payable on such proposed
date of payment in respect of the Registered Security issued in exchange
for such Coupon Security, but will be payable only to the Holder of such
Coupon when due in accordance with the provisions of this Indenture.
(ii) The Company may make payment of any Defaulted Interest on the
Registered Securities of such series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Registered Securities of such series may be listed, and upon such notice as
may be required by such exchange, 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.
(b) Any Defaulted Interest payable in respect of Bearer Securities of
any series shall be payable pursuant to such procedures as may be satisfactory
to the Trustee in such manner that there is no discrimination between the
Holders of Registered Securities (if any) and Bearer Securities of such series,
and notice of the payment date therefor shall be given by the Trustee, in the
name and at the expense of the Company, in the manner provided in Section 13.03
not more than 25 days and not less than 20 days prior to the date of the
proposed payment.
SECTION 2.18. Judgments. The Company may provide pursuant to Section
----------
2.03 for Debt Securities of any series that (a) the obligation, if any, of the
Company to pay the principal of, and premium, if any, and interest on, the Debt
Securities of any series in a Foreign Currency or Dollars (the "Designated
Currency") as may be specified pursuant to Section 2.03 is of the essence and
agrees that, to the fullest extent possible under applicable law, judgments in
respect of Debt Securities of such series shall be given in the Designated
Currency; (b) the obligation of the Company to make payments in the Designated
Currency of the principal of, and premium, if any, and interest on, such Debt
Securities shall, notwithstanding any payment in any other Currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the Designated Currency that the Holder receiving such payment may, in
accordance with normal banking procedures, purchase with the sum paid in such
other Currency (after any premium and cost of exchange) on the business day in
the country of issue of the Designated Currency or in the international
<PAGE>
41
banking community (in the case of a composite currency) immediately following
the day on which such Holder receives such payment; (c) if the amount in the
Designated Currency that may be so purchased for any reason falls short of the
amount originally due, the Company shall pay such additional amounts as may be
necessary to compensate for such shortfall; and (d) any obligation of the
Company not discharged by such payment shall be due as a separate and
independent obligation and, until discharged as provided herein, shall continue
in full force and effect.
ARTICLE III
Redemption of Debt Securities
-----------------------------
SECTION 3.01. Applicability of Article. The provisions of this
-------------------------
Article shall be applicable to the Debt Securities of any series which are
redeemable before their Stated Maturity except as otherwise specified as
contemplated by Section 2.03 for Debt Securities of such series.
SECTION 3.02. Tax Redemption; Special Tax Redemption. (a) Unless
---------------------------------------
otherwise specified pursuant to Section 2.03, Bearer Securities of any series
may be redeemed at the option of the Company in whole, but not in part, at any
time, on giving not less than 30 or more than 60 days' notice in accordance with
Section 3.03 (which notice shall be irrevocable), at the redemption price
thereof (calculated without premium), if the Company has or will become
obligated to pay additional interest on such Bearer Securities pursuant to
Section 4.06 as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or any change in
the application or official interpretation of such laws, regulations or rulings,
which change or amendment becomes effective on or after the date on which any
Person (including any Person acting as underwriter, broker or dealer) agrees to
purchase any of such Bearer Securities pursuant to their original issuance, and
such obligation cannot be avoided by the Company taking reasonable measures
available to it; provided, however, that no such notice of redemption shall be
-------- -------
given earlier than 90 days prior to the earliest date on which the Company would
be obligated to pay such additional interest were a payment in respect of the
Bearer Securities of that series then due. Prior to the publication of any
notice of redemption pursuant to this Section 3.02(a), the Company shall deliver
to the Trustee (i) an Officers' Certificate
<PAGE>
42
stating that the Company is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred and (ii) an Opinion of Counsel to the effect
that the Company has or will become obligated to pay such additional interest as
a result of such change or amendment.
(b) Unless otherwise specified pursuant to Section 2.03, if the
Company shall determine that any payment made outside the United States by the
Company or any of its paying agents in respect of any Bearer Security or Coupon
would, under any present or future laws or regulations of the United States, be
subject to any certification, documentation, information or other reporting
requirement of any kind, the effect of which requirement is the disclosure to
the Company, any paying agent or any governmental authority of the nationality,
residence or identity of a beneficial owner of such Bearer Security or Coupon
that is a United States Alien (other than such a requirement (i) that would not
be applicable to a payment made by the Company or any one of its paying agents
(A) directly to the beneficial owner or (B) to a custodian, nominee or other
agent of the beneficial owner, or (ii) that can be satisfied by such custodian,
nominee or other agent certifying to the effect that the beneficial owner is a
United States Alien; provided, however, that, in any case referred to in clause
-------- -------
(i)(B) or (ii), payment by the custodian, nominee or agent to the beneficial
owner is not otherwise subject to any such requirement), then the Company shall
elect either (x) to redeem such Bearer Security or Coupon in whole, but not in
part, at the redemption price thereof (calculated without premium) or (y) if the
conditions of the next succeeding paragraph are satisfied, to pay the additional
interest specified in such paragraph. The Company shall make such determination
as soon as practicable and publish prompt notice thereof (the "Determination
Notice"), stating the effective date of such certification, documentation,
information or other reporting requirement, whether the Company elects to redeem
the Bearer Security or Coupon or to pay the additional interest specified in the
next succeeding paragraph and (if applicable) the last date by which the
redemption of the Bearer Security or Coupon must take place, as provided in the
next succeeding sentence. If any Bearer Security or Coupon is to be redeemed
pursuant to this paragraph, the redemption shall take place on such date, not
later than one year after the publication of the Determination Notice, as the
Company shall specify by notice given to the Trustee at least 60 days before the
redemption date. Notice of such redemption shall be given to the Holders of the
Bearer
<PAGE>
43
Security or Coupon not more than 60 days or less than 30 days prior to
the redemption date. Notwithstanding the foregoing, the Company shall not so
redeem the Bearer Security or Coupon if the Company shall subsequently
determine, not less than 30 days prior to the redemption date, that subsequent
payments on the Bearer Security or Coupon would not be subject to any such
certification, documentation, information or other reporting requirement, in
which case the Company shall publish prompt notice of such subsequent
determination, and any earlier redemption notice given pursuant to this
paragraph shall be revoked and of no further effect. Prior to the publication
of any Determination Notice pursuant to this paragraph, the Company shall
deliver to the Trustee (i) an Officers' Certificate stating that the Company is
entitled to make such determination and setting forth a statement of facts
showing that the conditions precedent to the obligation of the Company to redeem
the Bearer Security or Coupon or to pay the additional interest specified in the
next succeeding paragraph have occurred and (ii) an Opinion of Counsel to the
effect that such conditions have occurred.
If and so long as the certification, documentation, information or
other reporting requirement referred to in the preceding paragraph would be
fully satisfied by payment of a backup withholding tax or similar charge, the
Company may elect to pay as additional interest such amounts as may be necessary
so that every net payment made outside the United States following the effective
date of such requirement by the Company or any of its paying agents in respect
of any Bearer Security or Coupon of which the beneficial owner is a United
States Alien (but without any requirement that the nationality, residence or
identity of such beneficial owner be disclosed to the Company, any paying agent
or any governmental authority), after deduction or withholding for or on account
of such backup withholding tax or similar charge that (i) would not be
applicable in the circumstances referred to in the parenthetical clause of the
first sentence of the preceding paragraph or (ii) is imposed as a result of
presentation of any such Bearer Security or Coupon for payment more than 15 days
after the date on which such payment became due and payable or on which payment
thereof was duly provided for, whichever occurred later), will not be less than
the amount provided in any such Bearer Security or Coupon to be then due and
payable. If the Company elects to pay additional interest pursuant to this
paragraph, the Company shall have the right to redeem the Bearer Security or
Coupon at any time in whole, but not in part, at the redemption price thereof
(calculated without premium), subject to the provisions of the last three
sentences of the immediately preceding
<PAGE>
44
paragraph. If the Company elects to pay additional interest pursuant to this
paragraph and the condition specified in the first sentence of this paragraph
should no longer be satisfied, then the Company shall redeem the Bearer Security
or Coupon in whole, but not in part, at the redemption price thereof (calculated
without premium), subject to the provisions of the last three sentences of the
immediately preceding paragraph. Any redemption payments made by the Company
pursuant to the two immediately preceding sentences shall be subject to the
continuing obligation of the Company to pay additional interest pursuant to this
paragraph. If the Company elects to, or is required to, redeem the Bearer
Security or Coupon pursuant to this paragraph, it shall publish prompt notice
thereof. If the Bearer Security or Coupon is to be redeemed pursuant to this
paragraph, the redemption shall take place on such date, not later than one year
after publication of the notice of redemption, as the Company shall specify by
notice to the Trustee at least 60 days prior to the redemption date.
SECTION 3.03. Notice of Redemption; Selection of Debt Securities. In
---------------------------------------------------
case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Debt Securities of any series in accordance with
their terms, a resolution of the Board of Directors of the Company or a
supplemental Indenture, the Company shall fix a date for redemption and shall
give notice of such redemption at least 30 and not more than 60 days prior to
the date fixed for redemption to the Holders of Debt Securities of such series
so to be redeemed as a whole or in part, in the manner provided in Section
13.03. The notice if given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice or any defect in the notice to
the Holder of any Debt Security of a series designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any other Debt Security of such series.
Each such notice of redemption shall specify the date fixed for
redemption, the redemption price at which Debt Securities of such series are to
be redeemed, the Place or Places of Payment that payment will be made upon
presentation and surrender of such Debt Securities, that any interest accrued to
the date fixed for redemption will be paid as specified in said notice, that the
redemption is for a sinking fund payment (if applicable), that, unless otherwise
specified in such notice, Coupon Securities of any series, if any, surrendered
for redemption must be accompanied by all Coupons maturing subsequent to the
date fixed for redemption, failing which the amount of any such
<PAGE>
45
missing Coupon or Coupons will be deducted from the redemption price, if the
Bearer Securities of any series are to be redeemed and any Registered Securities
of such series are not to be redeemed, and if such Bearer Securities may be
exchanged for Registered Securities not subject to redemption on the applicable
redemption date pursuant to Section 2.15(c) or otherwise, the last date on which
such exchanges may be made, that, if the Company defaults in making such
redemption payment or if the Debt Securities of that series are subordinated
pursuant to the terms of Article XII, the paying agent is prohibited from making
such payment pursuant to the terms of this Indenture, that on and after said
date any interest thereon or on the portions thereof to be redeemed will cease
to accrue, that in the case of Original Issue Discount Securities original issue
discount accrued after the date fixed for redemption will cease to accrue, the
terms of the Debt Securities of that series pursuant to which the Debt
Securities of that series are being redeemed and that no representation is made
as to the correctness or accuracy of the CUSIP number, if any, listed in such
notice or printed on the Debt Securities of that series. If less than all the
Debt Securities of a series are to be redeemed, the notice of redemption shall
specify the CUSIP numbers of the Debt Securities of that series to be redeemed.
In case any Debt Security of a series is to be redeemed in part only, the notice
of redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Debt Security, a new Debt Security or Debt Securities of that
series in principal amount equal to the unredeemed portion thereof, and in the
case of a Bearer Security with appropriate Coupons, if any, will be issued.
At least 60 days before the redemption date, unless the Trustee
consents to a shorter period, the Company shall give notice to the Trustee of
the redemption date, the principal amount of Debt Securities to be redeemed and
the series and terms of the Debt Securities pursuant to which such redemption
will occur. Such notice shall be accompanied by an Officers' Certificate and an
opinion of Counsel from the Company to the effect that such redemption will
comply with the conditions herein. If fewer than all the Debt Securities of a
series are to be redeemed, the record date relating to such redemption shall be
selected by the Company and given to the Trustee, which record date shall be not
less than 15 days after the date of notice to the Trustee.
On or prior to the redemption date for any Registered Securities, the
Company shall deposit with the
<PAGE>
46
Trustee or with a paying agent (or, if the Company is acting as its own paying
agent, segregate and hold in trust) an amount of money in the Currency in which
such Debt Securities are denominated (except as provided pursuant to Section
2.03) sufficient to pay the redemption price of such Registered Securities or
any portions thereof that are to be redeemed on that date. In the case of any
redemption pertaining to Bearer Securities or Coupon Securities, the Company
shall, no later than the business day prior to such redemption date, deposit
with the Trustee or with a paying agent (other than the Company) an amount of
money in the Currency in which such Debt Securities are denominated (except as
provided pursuant to Section 2.03) sufficient to pay the redemption price of
such Bearer or Coupon Securities or any portion thereof that are to be redeemed
on the redemption date.
If less than all the Debt Securities of like tenor and terms of a
series are to be redeemed (other than pursuant to mandatory sinking fund
redemptions) the Trustee shall select, in such manner as in its sole discretion
it shall deem appropriate and fair, the Debt Securities of that series or
portions thereof (in multiples of $1,000) to be redeemed. In any case where
more than one Registered Security of such series is registered in the same name,
the Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Registered Security of such series.
The Trustee shall promptly notify the Company in writing of the Debt Securities
selected for redemption and, in the case of any Debt Securities selected for
partial redemption, the principal amount thereof to be redeemed. If any Debt
Security called for redemption shall not be so paid upon surrender thereof on
such redemption date, the principal, premium, if any, and interest shall bear
interest until paid from the redemption date at the rate borne by the Debt
Securities of that series. If less than all the Debt Securities of unlike tenor
and terms of a series are to be redeemed, the particular Debt Securities to be
redeemed shall be selected by the Company. Provisions of this Indenture that
apply to Debt Securities called for redemption also apply to portions of Debt
Securities called for redemption.
SECTION 3.04. Payment of Debt Securities Called for Redemption. If
-------------------------------------------------
notice of redemption has been given as provided in Section 3.03, the Debt
Securities or portions of Debt Securities of the series with respect to which
such notice has been given shall become due and payable on the date and at the
Place or Places of Payment stated in such notice at the applicable redemption
price, together with any
<PAGE>
47
interest accrued to the date fixed for redemption, and on and after said date
(unless the Company shall default in the payment of such Debt Securities at the
applicable redemption price, together with any interest accrued to said date)
any interest on the Debt Securities or portions of Debt Securities of any series
so called for redemption shall cease to accrue, any original issue discount in
the case of Original Issue Discount Securities shall cease to accrue and any
Coupons for such interest appertaining to any Coupon Securities to be redeemed,
except to the extent described below, shall be void. On presentation and
surrender of such Debt Securities at the Place or Places of Payment in said
notice specified, the said Debt Securities or the specified portions thereof
shall be paid and redeemed by the Company at the applicable redemption price,
together with any interest accrued thereon to the date fixed for redemption.
If any Coupon Security surrendered for redemption shall not be
accompanied by all Coupons appertaining thereto maturing on or after the
applicable redemption date, the redemption price for such Coupon Security may be
reduced by an amount equal to the face amount of all such missing Coupons. If
thereafter the Holder of such Coupon shall surrender to any paying agent outside
the United States any such missing Coupon in respect of which a deduction shall
have been made from the redemption price, such Holder shall be entitled to
receive the amount so deducted. The surrender of such missing Coupon or Coupons
may be waived by the Company and the Trustee, if there be furnished to them such
security or indemnity as they may require to save each of them and any paying
agent harmless.
Any Debt Security that is to be redeemed only in part shall be
surrendered at the corporate trust office or such other office or agency of the
Company as is specified pursuant to Section 2.03 (in the case of Registered
Securities) and at the principal London office of the Trustee or such other
office or agency of the Company outside the United States as is specified
pursuant to Section 2.03 (in the case of Bearer Securities) with, if the
Company, the Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company, the
Registrar and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing, and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Debt Security without service
charge, a new Debt Security or Debt Securities of the same series, of like tenor
and form, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the
<PAGE>
48
Debt Security so surrendered, and, in the case of a Coupon Security, with
appropriate Coupons attached; except that if a Global Security is so
surrendered, the Company shall execute, and the Trustee shall authenticate and
deliver to the Depositary for such Global Security, without service charge, a
new Global Security in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Global Security so surrendered. In
the case of a Debt Security providing appropriate space for such notation, at
the option of the Holder thereof, the Trustee, in lieu of delivering a new Debt
Security or Debt Securities as aforesaid, may make a notation on such Debt
Security of the payment of the redeemed portion thereof.
SECTION 3.05. Mandatory and Optional Sinking Funds. The minimum
-------------------------------------
amount of any sinking fund payment provided for by the terms of Debt Securities
of any series, resolution of the Board of Directors or a supplemental Indenture
is herein referred to as a "mandatory sinking fund payment," and any payment in
excess of such minimum amount provided for by the terms of Debt Securities of
any series, resolution of the Board of Directors or a supplemental Indenture is
herein referred to as an "optional sinking fund payment."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Debt Securities of a series in cash, the Company may
at its option (a) deliver to the Trustee Debt Securities of that series
(together with the unmatured Coupons, if any, appertaining thereto) theretofore
purchased or otherwise acquired by the Company or (b) receive credit for the
principal amount of Debt Securities of that series which have been redeemed
either at the election of the Company pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, resolution or
supplemental Indenture; provided, however, that such Debt Securities have not
-------- -------
been previously so credited. Such Debt Securities shall be received and
credited for such purpose by the Trustee at the redemption price specified in
such Debt Securities, resolution or supplemental Indenture for redemption
through operation of the sinking fund and the amount of such mandatory sinking
fund payment shall be reduced accordingly.
SECTION 3.06. Redemption of Debt Securities for Sinking Fund. Not
-----------------------------------------------
less than 60 days prior to each sinking fund payment date for any series of Debt
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that
<PAGE>
49
series, any resolution or supplemental Indenture, the portion thereof, if any,
which is to be satisfied by payment of cash in the Currency in which the Debt
Securities of such series are denominated (except as provided pursuant to
Section 2.03) and the portion thereof, if any, which is to be satisfied by
delivering and crediting Debt Securities of that series pursuant to this Section
3.06 (which Debt Securities, if not previously redeemed, will accompany such
certificate) and whether the Company intends to exercise its right to make any
permitted optional sinking fund payment with respect to such series. Such
certificate shall also state that no Event of Default has occurred and is
continuing with respect to such series. Such certificate shall be irrevocable
and upon its delivery the Company shall be obligated to make the cash payment or
payments therein referred to, if any, on or before the next succeeding sinking
fund payment date. Failure of the Company to deliver such certificate (or to
deliver the Debt Securities and Coupons, if any, specified in this paragraph)
shall not constitute a Default, but such failure shall require that the sinking
fund payment due on the next succeeding sinking fund payment date for that
series shall be paid entirely in cash and shall be sufficient to redeem the
principal amount of such Debt Securities subject to a mandatory sinking fund
payment without the option to deliver or credit Debt Securities as provided in
this Section 3.06 and without the right to make any optional sinking fund
payment, if any, with respect to such series.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made in cash
which shall equal or exceed $100,000 (or a lesser sum if the Company shall so
request) with respect to the Debt Securities of any particular series shall be
applied by the Trustee on the sinking fund payment date on which such payment is
made (or, if such payment is made before a sinking fund payment date, on the
sinking fund payment date following the date of such payment) to the redemption
of such Debt Securities at the Redemption Price specified in such Debt
Securities, resolution or supplemental Indenture for operation of the sinking
fund together with any accrued interest to the date fixed for redemption. Any
sinking fund moneys not so applied or allocated by the Trustee to the redemption
of Debt Securities shall be added to the next cash sinking fund payment received
by the Trustee for such series and, together with such payment, shall be applied
in accordance with the provisions of this Section 3.06. Any and all sinking
fund moneys with respect to the Debt Securities of any particular series held by
the Trustee on the last sinking fund payment date with respect to Debt
Securities of
<PAGE>
50
such series and not held for the payment or redemption of particular Debt
Securities shall be applied by the Trustee, together with other moneys, if
necessary, to be deposited sufficient for the purpose, to the payment of the
principal of the Debt Securities of that series at its Stated Maturity.
The Trustee shall select the Debt Securities to be redeemed upon such
sinking fund payment date in the manner specified in the last paragraph of
Section 3.03 and the Company shall cause notice of the redemption thereof to be
given in the manner provided in Section 3.03 except that the notice of
redemption shall also state that the Debt Securities are being redeemed by
operation of the sinking fund. Such notice having been duly given, the
redemption of such Debt Securities shall be made upon the terms and in the
manner stated in Section 3.04.
At least one business day before each sinking fund payment date, the
Company shall pay to the Trustee (or, if the Company is acting as its own paying
agent, the Company shall segregate and hold in trust) in cash a sum in the
Currency in which the Debt Securities of such series are denominated (except as
provided pursuant to Section 2.03) equal to any interest accrued to the date
fixed for redemption of Debt Securities or portions thereof to be redeemed on
such sinking fund payment date pursuant to this Section 3.06.
The Trustee shall not redeem any Debt Securities of a series with
sinking fund moneys or mail any notice of redemption of such Debt Securities by
operation of the sinking fund for such series during the continuance of a
Default in payment of interest on such Debt Securities or of any Event of
Default (other than an Event of Default occurring as a consequence of this
paragraph) with respect to such Debt Securities, except that if the notice of
redemption of any such Debt Securities shall theretofore have been mailed in
accordance with the provisions hereof, the Trustee shall redeem such Debt
Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article III.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such Default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such Default or
Event of Default, be held as security for the payment of such Debt Securities;
provided, however, that in case such Event of Default or Default shall have been
- -------- -------
cured or waived as provided herein, such moneys shall thereafter be applied on
the next sinking fund payment
<PAGE>
51
date for such Debt Securities on which such moneys may be applied pursuant to
the provisions of this Section 3.06.
ARTICLE IV
Particular Covenants of the Company
-----------------------------------
SECTION 4.01. Payment of Principal of, and Premium, If Any, and
-------------------------------------------------
Interest on, Debt Securities. The Company, for the benefit of each series of
- -----------------------------
Debt Securities, will duly and punctually pay or cause to be paid the principal
of, and premium, if any, and interest on, each of the Debt Securities and pay
any Coupons at the place, at the respective times and in the manner provided
herein, in the Debt Securities and in the Coupons. Each installment of interest
on the Debt Securities may at the Company's option be paid by mailing checks for
such interest payable to the Person entitled thereto pursuant to Section 2.07(a)
to the address of such Person as it appears on the Debt Security Register. Any
interest due on Coupon Securities on or before the Stated Maturity of the
related Debt Security, other than additional interest, if any, payable as
provided in Section 4.06 in respect of principal of, or premium, if any, on such
a Debt Security, shall be payable only upon presentation and surrender of the
several Coupons for such interest installments as are evidenced thereby as they
severally mature.
Principal, premium and interest of Debt Securities of any series shall
be considered paid on the date due if on such date the Trustee or any paying
agent holds in accordance with this Indenture money sufficient to pay in the
Currency in which the Debt Securities of such series are denominated (except as
provided pursuant to Section 2.03) all principal, premium and interest then due
and, in the case of Debt Securities subordinated pursuant to the terms of
Article XII, the Trustee or such paying agent, as the case may be, is not
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Debt Securities and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. Maintenance of Offices or Agencies for Registration of
------------------------------------------------------
Transfer, Exchange and Payment of Debt Securities. The Company will maintain in
- --------------------------------------------------
each Place of Payment for any series of Debt Securities and Coupons, if
<PAGE>
52
any, an office or agency where Debt Securities and Coupons of such series (but,
except as otherwise provided in Section 2.12, unless such Place of Payment is
located outside the United States, not Bearer Securities or Coupons) may be
presented or surrendered for payment, where Debt Securities of such series may
be surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities and Coupons of such series and
this Indenture may be served. So long as any Bearer Securities of any series
remain outstanding, the Company will maintain for such purposes one or more
offices or agencies outside the United States in such city or cities specified
pursuant to Section 2.03 and, if any Bearer Securities are listed on a
securities exchange that requires an office or agency for the payment of
principal of, and premium, if any, or interest on, such Bearer Securities in a
location other than the location of an office or agency specified pursuant to
Section 2.03, the Company will maintain for such purposes an office or agency in
such location so long as any Bearer Securities are listed on such securities
exchange and such exchange so requires. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the corporate trust office of the Trustee (in the case of Registered
Securities) and at the principal London office of the Trustee (in the case of
Bearer Securities), and the Company hereby appoints the Trustee as its agent to
receive all presentations, surrenders, notices and demands.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or outside
of such Place of Payment), and may from time to time rescind any such
designation; provided, however, that no such designation or rescission shall in
-------- -------
any manner relieve the Company of its obligations described in the preceding
paragraph. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
SECTION 4.03. Appointment to Fill a Vacancy in the Office of Trustee.
------------------------------------------------------
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.10, a Trustee,
<PAGE>
53
so that there shall at all times be a Trustee hereunder with respect to each
series of Debt Securities.
SECTION 4.04. Duties of Paying Agents, etc. (a) The Company shall
-----------------------------
cause each paying agent, if any, other than the Trustee, to execute and deliver
to the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 4.04,
(i) that it will hold all sums held by it as such agent for the
payment of the principal of, and premium, if any, or interest on, the Debt
Securities of any series and the payment of any related Coupons (whether
such sums have been paid to it by the Company or by any other obligor on
the Debt Securities or Coupons of such series) in trust for the benefit of
the Holders of the Debt Securities and Coupons of such series;
(ii) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Debt Securities or Coupons of such
series) to make any payment of the principal of, and premium, if any, or
interest on, the Debt Securities of such series or any payment on any
related Coupons when the same shall be due and payable; and
(iii) that it will at any time during the continuance of an Event of
Default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held by it as such agent.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, and premium, if any, or interest on,
the Debt Securities and Coupons, if any, of any series, set aside, segregate and
hold in trust for the benefit of the Holders of the Debt Securities and Coupons
of such series a sum sufficient to pay such principal, premium, if any, or
interest so becoming due. The Company will promptly notify the Trustee of any
failure by the Company to take such action or the failure by any other obligor
on such Debt Securities or Coupons to make any payment of the principal of, and
premium, if any, or interest on, such Debt Securities or Coupons when the same
shall be due and payable.
(c) Anything in this Section 4.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by it or any paying agent, as required by
this Section 4.04, such sums to be
<PAGE>
54
held by the Trustee upon the same trusts as those upon which such sums were held
by the Company or such paying agent.
(d) Whenever the Company shall have one or more paying agents with
respect to any series of Debt Securities and Coupons, it will, prior to each due
date of the principal of, and premium, if any, or interest on, any Debt
Securities of such series, deposit with any such paying agent a sum sufficient
to pay the principal, premium or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled thereto, and (unless any such
paying agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
(e) Anything in this Section 4.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 4.04 is subject
to the provisions of Section 11.05.
SECTION 4.05. Statement by officers as to Default. The Company will
------------------------------------
deliver to the Trustee, on or before a date not more than four months after the
end of each fiscal year of the Company (currently on a calendar year basis)
ending after the date hereof, an Officers' Certificate stating, as to each
officer signing such certificate, that (i) in the course of his performance of
his duties as an officer of the Company he would normally have knowledge of any
Default, (ii) whether or not to the best of his knowledge any Default occurred
during such year and (iii) if to the best of his knowledge the Company is in
Default, specifying all such Defaults and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 314(a)(4) of the Trust Indenture Act.
SECTION 4.06. Payment of Additional Interest. Unless otherwise
-------------------------------
provided pursuant to Section 2.03, the provisions of this Section 4.06 shall be
applicable to Bearer Securities of any series.
The Company will, subject to the exceptions and limitations set forth
below, pay as additional interest to the Holder of any Bearer Security or Coupon
that is a United States Alien such amounts as may be necessary so that every net
payment on such Bearer Security or Coupon, after deduction or withholding for or
on account of any present or future tax, assessment or other governmental charge
imposed upon or as a result of such payment by the United States (or any
political subdivision or taxing authority thereof or therein), will not be less
than the amount provided in such
<PAGE>
55
Bearer Security or Coupon to be then due and payable. However, the Company will
not be required to make any such payment of additional interest for or on
account of:
(a) any tax, assessment or other governmental charge that would not
have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor or
beneficiary of, or a Person holding a power over, such Holder, if such
Holder is an estate or a trust, or a member or shareholder of such Holder,
if such Holder is a partnership or corporation) and the United States,
including such Holder (or such fiduciary, settlor, beneficiary, Person
holding a power, member or shareholder) being or having been a citizen or
resident thereof or being or having been engaged in trade or business or
present therein or having or having had a permanent establishment therein
or (ii) such Holder's past or present status for United States Federal
income tax purposes as a personal holding company, foreign personal holding
company or private foundation or other tax-exempt organization with respect
to the United States or as a corporation that accumulates earnings to avoid
United States Federal income tax;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge that would not
have been imposed but for the presentation by the Holder of a Bearer
Security or Coupon for payment more than 15 days after the date on which
such payment became due and payable or on which payment thereof was duly
provided for, whichever occurs later;
(d) any tax, assessment or other governmental charge that is payable
otherwise than by deduction or withholding from a payment on a Bearer
Security or Coupon;
(e) any tax, assessment or other governmental charge that would not
have been imposed but for a failure to comply with applicable
certification, documentation, information or other reporting requirement
concerning the nationality, residence, identity or connection with the
United States of the Holder or beneficial owner of a Bearer Security or
Coupon if, without regard to any tax treaty, such compliance is required by
statute or regulation of the
<PAGE>
56
United States as a precondition to relief or exemption from such tax,
assessment or other governmental charge; or
(f) any tax, assessment or other governmental charge imposed on a
Holder that actually or constructively owns ten percent or more of the
combined voting power of all classes of stock of the Company or that is a
controlled foreign corporation related to the Company through stock
ownership;
nor shall additional interest be paid with respect to a payment on a Bearer
Security or Coupon to a Holder that is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent a beneficiary or settlor
with respect to such fiduciary or a member of such partnership or a beneficial
owner would not have been entitled to the additional interest had such
beneficiary, settlor, member or beneficial owner been the Holder of such Bearer
Security or Coupon.
Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of, or premium, if any, or interest on, any Debt
Security or payment with respect to any Coupon of any series, such mention shall
be deemed to include mention of the payment of additional interest provided for
in the terms of such Debt Securities and this Section 4.06 to the extent that,
in such context, additional interest is, was or would be payable in respect
thereof pursuant to the provisions of this Section 4.06 and express mention of
the payment of additional interest (if applicable) in any provisions hereof
shall not be construed as excluding additional interest in those provisions
hereof where such express mention is not made.
If the payment of additional interest becomes required in respect of
the Debt Securities or Coupons of a series, at least ten days prior to the first
interest payment date with respect to which such additional interest will be
payable (or if the Debt Securities of that series will not bear interest prior
to its Stated Maturity, the first day on which a payment of principal, and
premium, if any, is made and on which such additional interest will be payable),
and at least ten days prior to each date of payment of principal, and premium,
if any, or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and each paying agent with an Officers' Certificate that shall specify
by country the amount, if any, required to be withheld on such payments to
Holders of Debt Securities or Coupons that are United States
<PAGE>
57
Aliens, and the Company will pay to the Trustee or such paying agent the
additional interest, if any, required by the terms of such Debt Securities and
this Section 4.06. The Company covenants to indemnify the Trustee and any paying
agent for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or bad faith on their part arising out of
or in connection with actions taken or omitted by any of them in reliance on any
Officers' Certificate furnished pursuant to this Section 4.06.
SECTION 4.07. Further Instruments and Acts. The Company will, upon
-----------------------------
request of the Trustee, execute and deliver such further instruments and do such
further acts as may reasonably be necessary or proper to carry out more
effectually the purposes of this Indenture.
SECTION 4.08. Existence. Subject to Article X, the Company will do
----------
or cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
--------
however, that the Company shall not be required to preserve any such right or
- -------
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 4.09. Maintenance of Properties. The Company will cause all
--------------------------
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
-------- -------
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 4.10. Payment of Taxes and Other Claims. The Company will pay
----------------------------------
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any
<PAGE>
58
Subsidiary, and (2) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
-------- -------
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
SECTION 4.11 Limitation on Secured Debt. The Company will not, and
---------------------------
will not permit any Restricted Subsidiary to, become liable for any indebtedness
for borrowed money secured by a mortgage or lien on a Principal Property or on
any shares of stock or indebtedness of any Restricted Subsidiary ("Secured
Debt") or secure the same without making effective provision for securing the
payment of the principal of and interest on the Debt Securities (and, if the
company so elects, any indebtedness ranking equally with the Debt Securities)
equally and ratably with or prior to such secured indebtedness. This covenant
will not apply to debt secured by (a) mortgages or liens on property, capital
stock or indebtedness of any corporation existing at the time it becomes a
subsidiary, (b) mortgages existing on property at the time of acquisition,
purchase money mortgages and mortgages to secure indebtedness incurred within
180 days after the time of acquisition thereof to finance the purchase price,
(c) mortgages or liens on unimproved property to finance the cost of
improvements to such property, (d) mortgages or liens securing indebtedness owed
by a Subsidiary to the Company or a wholly owned Restricted Subsidiary, (e)
certain mortgages in favor of governmental entities including mortgages in
connection with industrial revenue financing or (f) extensions, renewals or
replacements of any of the foregoing. Notwithstanding this covenant, the
Company and its Restricted Subsidiaries may incur or guarantee any Secured Debt,
provided that after giving effect thereto the aggregate amount of such debt then
outstanding (not including Secured Debt permitted under the foregoing
exceptions) and the aggregate "value" of Sale and Leaseback Transactions other
than Sale and Leaseback Transactions permitted under clauses (a) through (d) and
(f) in Section 4.12, at such time does not exceed 10% of Consolidated Net
Tangible Assets.
SECTION 4.12 Limitation on Sales and Leasebacks. Sales and leasebacks
-----------------------------------
of a Principal Property by the Company or a Restricted Subsidiary (except those
for a temporary period of not more than three years and those from the Company
or a wholly owned Restricted Subsidiary) will be prohibited unless (a) the
transaction is entered into to
<PAGE>
59
finance the cost of acquiring such property or within 180 days after such
acquisition, (b) the transaction is entered into to finance the cost of
improvements to such unimproved property, (c) the transaction is one of certain
types in which the lessor is a governmental entity, (d) the transaction involves
the extension, renewal or replacement of the transactions referred to in clauses
(a) through (c) above, (e) the property involved is property that could be
mortgaged without equally and ratably securing the Debt Securities under the
last sentence of the preceding paragraph or (f) an amount equal to the proceeds
of sale or the fair value of the property sold (whichever is higher) is applied
to the retirement of funded debt of the Company.
ARTICLE V
Holders, Lists and Reports
--------------------------
by the Company and the Trustee
------------------------------
SECTION 5.01. Company to Furnish Trustee Information as to Names and
------------------------------------------------------
Addresses of Holders; Preservation of Information. The Company covenants and
- --------------------------------------------------
agrees that it will furnish or cause to be furnished to the Trustee with respect
to the Registered Securities of each series:
(a) not more than 15 days after each record date with respect to the
payment of interest, if any, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Registered Holders as
of such record date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and contents as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that so long as the Trustee shall be the Registrar, such
- -------- -------
lists shall not be required to be furnished.
The Company shall also be required to furnish to the Trustee at all
such times set forth above all information in the possession or control of the
Company or any of its paying agents other than the Trustee as to the names and
addresses of the Bearer Holders of all series; provided, however, that the
-------- -------
Company shall have no obligation to investigate any matter relating to any
Bearer Holders.
<PAGE>
60
The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders (1)
contained in the most recent list furnished to it as provided in this Section
5.01 or (2) received by it in the capacity of paying agent or Registrar (if so
acting) hereunder.
The Trustee may destroy any list furnished to it as provided in this
Section 5.01 upon receipt of a new list so furnished.
SECTION 5.02. Communications to Holders. Holders may communicate
--------------------------
pursuant to Section 312(b) of the Trust Indenture Act with other Holders with
respect to their rights under this Indenture or the Debt Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
Section 312(c) of the Trust Indenture Act.
SECTION 5.03. Reports by Company. (a) The Company covenants and
-------------------
agrees, and any obligor hereunder shall covenant and agree, to file with the
Trustee and the Holders (in the manner and to the extent provided in Section
5.04), within 15 days after the Company or such obligor, as the case may be, is
required to file the same with the Securities and Exchange Commission, copies of
the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as said Commission may from time
to time by rules and regulations prescribe) which the Company or such obligor,
as the case may be, may be required to file with said Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company or such
obligor, as the case may be, is not required to file information, documents or
reports pursuant to either of such Sections, then to file with the Trustee, the
Holders (in the manner and to the extent provided in Section 5.04) and said
Commission, in accordance with rules and regulations prescribed from time to
time by said Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations.
(b) The Company covenants and agrees, and any obligor hereunder shall
covenant and agree, to file with the Trustee, the Holders (in the manner and to
the extent provided in Section 5.04) and the Securities and Exchange Commission,
in accordance with the rules and regulations prescribed from time to time by
said Commission, such
<PAGE>
61
additional information, documents, and reports with respect to compliance
by the Company or such obligor, as the case may be, with the conditions and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.
SECTION 5.04. Reports by Trustee. As promptly as practicable after
-------------------
each beginning with the following the date of
this Indenture, and in any event prior to in each year, the
Trustee shall mail to each Holder a brief report dated as of that
complies with Section 313(a) of the Trust Indenture Act. The Trustee also shall
comply with Section 313(b) of the Trust Indenture Act.
Reports pursuant to this Section 5.04 shall be transmitted by mail:
(1) to all Registered Holders, as the names and addresses of such
Holders appear in the Debt Security Register;
(2) to such Bearer Holders of any series as have, within two years
preceding such transmission, filed their names and addresses with the
Trustee for such series for that purpose; and
(3) except in the cases of reports under Section 313(b)(2) of the
Trust Indenture Act, to each Holder of a Debt Security of any series whose
name and address appear in the information preserved at the time by the
Trustee in accordance with Section 5.02.
A copy of each report at the time of its mailing to Holders shall be
filed with the Securities and Exchange Commission and each stock exchange (if
any) on which the Debt Securities of any series are listed. The Company agrees
to notify promptly the Trustee whenever the Debt Securities of any series become
listed on any stock exchange and of any delisting thereof.
SECTION 5.05. Record Dates for Action by Holders. If the Company
-----------------------------------
shall solicit from the holders of Debt Securities of any series any action
(including the making of any demand or request, the giving of any direction,
notice, consent or waiver or the taking of any other action), the Company may,
at its option, by resolution of the Board of Directors, fix in advance a record
date for the determination of Holders of Debt Securities entitled to take such
action, but the Company shall have no obligation to do so. Any such record date
shall be fixed at the Company's
<PAGE>
62
discretion. If such a record date is fixed, such action may be sought or given
before or after the record date, but only the Holders of Debt Securities of
record at the close of business on such record date shall be deemed to be
Holders of Debt Securities for the purpose of determining whether Holders of the
requisite proportion of Debt Securities of such series Outstanding have
authorized or agreed or consented to such action, and for that purpose the Debt
Securities of such series Outstanding shall be computed as of such record date.
ARTICLE VI
Remedies of the Trustee and Holders in Event of Default
-------------------------------------------------------
SECTION 6.01. Events of Default. If any one or more of the following
------------------
shall have occurred and be continuing with respect to Debt Securities of any
series (each of the following, an "Event of Default"):
(a) default in the payment of any installment of interest upon any
Debt Securities of that series or any payment with respect to the related
Coupons, if any, as and when the same shall become due and payable, whether
or not such payment shall be prohibited by Article XII, if applicable, and
continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of or premium, if any, on
any Debt Securities of that series as and when the same shall become due
and payable, whether at maturity, upon redemption, by declaration, upon
required repurchase or otherwise, whether or not such payment shall be
prohibited by Article XII, if applicable; or
(c) default in the payment of any sinking fund payment with respect to
any Debt Securities of that series as and when the same shall become due
and payable; or
(d) failure on the part of the Company to comply with Article X; or
(e) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Debt
Securities of that series, in any resolution of the Board of Directors
authorizing the issuance of that series of Debt Securities, in this
Indenture with
<PAGE>
63
respect to such series or in any supplemental Indenture with respect to
such series (other than a covenant a default in the performance of which is
elsewhere in this Section specifically dealt with), continuing for a period
of 60 days after the date on which written notice specifying such failure
and requiring the Company to remedy the same shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Debt Securities of that series at the time
Outstanding; or
(f) Indebtedness of the Company or any Subsidiary of the Company is
not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default, the total amount
of such Indebtedness unpaid or accelerated exceeds $20,000,000 or its
Dollar Equivalent at the time and such default remains uncured or such
acceleration is not rescinded for 10 days after the date on which written
notice specifying such failure and requiring the Company to remedy the same
shall have been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Debt Securities of that series at
the time Outstanding; or
(g) the Company or any of its Significant Subsidiaries shall (i)
voluntarily commence any pro ceeding or file any petition seeking relief
under Title 11 of the United States Code or any other Federal or State
bankruptcy, insolvency or similar law, (ii) consent to the institution of,
or fail to controvert within the time and in the manner prescribed by law,
any such proceeding or the filing of any such petition, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator
or similar official for the Company or any such Significant Subsidiary or
for a substantial part of its property, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors, (vi) admit in
writing its inability or fail generally to pay its debts as they become
due, (vii) take corporate action for the purpose of effecting any of the
foregoing, or (viii) take any comparable action under any foreign laws
relating to insolvency; or
<PAGE>
64
(h) the entry of an order or decree by a court having competent
jurisdiction in the premises for (i) relief in respect of the Company or
any of its Significant Subsidiaries or a substantial part of any of their
property under Title 11 of the United States Code or any other Federal or
State bankruptcy, insolvency or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator or similar official for the
Company or any such Significant Subsidiary or for a substantial part of any
of its property (except any decree or order appointing such official of
any Significant Subsidiary pursuant to a plan under which the assets and
operations of such Significant Subsidiary are transferred to or combined
with another Subsidiary or Subsidiaries of the Company or to the Company)
or (iii) the winding up or liquidation of the Company or any such
Significant Subsidiary (except any decree or order approving or ordering
the winding up or liquidation of the affairs of a Significant Subsidiary
pursuant to a plan under which the assets and operations of such
Significant Subsidiary are transferred to or combined with another
Subsidiary or Subsidiaries of the Company or to the Company); and such
order or decree shall continue unstayed and in effect for 60 consecutive
days; or any similar relief is granted under any foreign laws and the order
or decree stays in effect for 60 consecutive days; or
(i) any judgment or decree for the payment of money in excess of
$20,000,000 or its Dollar Equivalent at the time is entered against the
Company or any Subsidiary of the Company by a court or courts of competent
jurisdiction, which judgment is not covered by insurance, and is not
discharged and either (A) an enforcement proceeding has been commenced by
any creditor upon such judgment or decree or (B) there is a period of 60
days following the entry of such judgment or decree during which such
judgment or decree is not discharged, waived or the execution thereof
stayed and, in the case of (A) or (B), such default continues for 10 days
after the date on which written notice specifying such failure and
requiring the Company to remedy the same shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Debt Securities of that series at the time
Outstanding; or
(j) any other Event of Default provided with respect to Debt
Securities of that series;
<PAGE>
65
then and in each and every case that an Event of Default described in clause
(a), (b), (c), (d), (e), (f), (i) or (j) with respect to Debt Securities of that
series at the time Outstanding occurs and is continuing, unless the principal of
and interest on all the Debt Securities of that series shall have already become
due and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Debt Securities of that series then
Outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by Holders), may declare the principal of (or, if the Debt Securities
of that series are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of that series) and interest
on all the Debt Securities of that series to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Debt Securities or Coupons
appertaining thereto of that series contained to the contrary notwithstanding.
If an Event of Default described in clause (g) or (h) occurs, then and in each
and every such case, unless the principal of and interest on all the Debt
Securities shall have become due and payable, the principal of (or, if any Debt
Securities are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms thereto) and interest on all
the Debt Securities then Outstanding hereunder shall ipso facto become and be
---- -----
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders, anything in this Indenture or in the Debt Securities
contained to the contrary notwithstanding.
The Holders of a majority in principal amount of the Debt Securities
of a particular series by notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree already rendered 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 acceleration. Upon any such rescission, the parties hereto shall be
restored respectively to their several positions and rights hereunder, and all
rights, remedies and powers of the parties hereto shall continue as though no
such proceeding had been taken.
In case the Trustee or any Holder shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee or such Holder, then and in
every such case the
<PAGE>
66
parties hereto shall be restored respectively to their several positions and
rights hereunder, and all rights, remedies and powers of the parties hereto
shall continue as though no such proceeding had been taken.
The foregoing Events of Default shall constitute Events of Default
whatever the reason for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (c), (d), (e), (f), (i) or (j), its status and
what action the Company is taking or proposes to take with respect thereto.
SECTION 6.02. Collection of Indebtedness by Trustee, etc. If an
-------------------------------------------
Event of Default occurs and is continuing, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid or enforce the performance of any provision of the Debt Securities of
the affected series or this Indenture, and may prosecute any such action or
proceedings to judgment or final decree, and may enforce any such judgment or
final decree against the Company or any other obligor upon the Debt Securities,
and the Coupons, if any, appertaining thereto, of such series (and collect in
the manner provided by law out of the property of the Company or any other
obligor upon the Debt Securities and Coupons of such series wherever situated
the moneys adjudged or decreed to be payable).
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor upon the Debt Securities
and Coupons, if any, of any series under Title 11 of the United States Code or
any other Federal or State bankruptcy, insolvency or similar law, or in case a
receiver, trustee or other similar official shall have been appointed for its
property, or in case of any other similar judicial proceedings relative to the
Company or any other obligor upon the Debt Securities of any series, its
creditors or its property, the Trustee, irrespective of whether the principal of
Debt Securities and Coupons, if any, of any series shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any
<PAGE>
67
demand pursuant to the provisions of this Section 6.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal, premium, if any, and interest
(or, if the Debt Securities of such series are Original Issue Discount Debt
Securities, such portion of the principal amount as may be specified in the
terms of such series) owing and unpaid in respect of the Debt Securities and
Coupons of such series, 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 reasonable compensation to the Trustee, its agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities Incurred, and all
advances made, by the Trustee except as a result of its negligence or bad faith)
and of the Holders thereof allowed in any such judicial proceedings relative to
the Company, or any other obligor upon the Debt Securities and Coupons of such
series, its creditors or its property, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of such Holders and of the Trustee
on their behalf, and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of such Holders to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to such Holders, to pay to the Trustee such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other reasonable expenses and liabilities
Incurred, and all advances made, by the Trustee except as a result of its
negligence or bad faith.
All rights of action and of asserting claims under this Indenture, or
under any of the Debt Securities and the Coupons, if any, appertaining thereto,
of any series, may be enforced by the Trustee without the possession of any such
Debt Securities or Coupons, or the production thereof in any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment (except for any amounts payable to the Trustee pursuant
to Section 7.06) shall be for the ratable benefit of the Holders of all the Debt
Securities or Coupons in respect of which such action was taken.
In case of an Event of Default hereunder the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights,
<PAGE>
68
either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
SECTION 6.03. Application of Moneys Collected by Trustee. Any moneys
-------------------------------------------
collected by the Trustee pursuant to Section 6.02 with respect to Debt
Securities and Coupons, if any, of any series shall be applied, after giving
effect to the provisions of Article XII, if applicable, in the order following,
at the date or dates fixed by the Trustee for the distribution of such moneys,
upon presentation of the several Debt Securities or Coupons of such series in
respect of which moneys have been collected, and the notation thereon of the
payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of all money due the Trustee pursuant to
Section 7.06;
SECOND: In case the principal of the Outstanding Debt Securities in
respect of which such moneys have been collected shall not have become due,
to the payment of interest on the Debt Securities or Coupons of such series
in the order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at the rate or Yield to
Maturity (in the case of Original Issue Discount Debt Securities) borne by
the Debt Securities or Coupons of such series, such payments to be made
ratably to the Persons entitled thereto, without discrimination or
preference;
THIRD: In case the principal of the Outstanding Debt Securities in
respect of which such moneys have been collected shall have become due, by
declaration or otherwise, to the payment of the whole amount then owing and
unpaid upon the Debt Securities or Coupons of such series for principal and
premium, if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest at the rate or Yield
to Maturity (in the case of Original Issue Discount Debt Securities) borne
by the Debt Securities or Coupons of such series; and, in case such
moneys shall be insufficient to pay in full the whole amount so due and
unpaid upon the Debt Securities and Coupons of such
<PAGE>
69
series, then to the payment of such principal and premium, if any, and
interest, without preference or priority of principal and premium, if any,
over interest, or of interest over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of any
Debt Security or Coupon of such series over any Debt Security or Coupon of
such series, ratably to the aggregate of such principal and premium, if
any, and interest; and
FOURTH: The remainder, if any, shall be paid to the Company, its
successors or assigns, or to whosoever may be lawfully entitled to receive
the same, or as a court of competent jurisdiction may direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.03. At least 15 days before such record date,
the Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.
SECTION 6.04. Limitation on Suits by Holders. No Holder of any Debt
-------------------------------
Security or Coupon of any series shall have any right by virtue or by availing
of any provision of this Indenture to institute any action or proceeding at law
or in equity or in bankruptcy or otherwise, upon or under or with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of an Event of Default with respect to Debt Securities of
that same series and of the continuance thereof and unless the Holders of not
less than 25% in aggregate principal amount of the Outstanding Debt Securities
of that series shall have made written request upon the Trustee to institute
such action or proceedings in respect of such Event of Default in its own name
as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
Incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have failed to institute any
such action or proceedings and no direction inconsistent with such written
request shall have been given to the Trustee pursuant to Section 6.06; it being
understood and intended, and being expressly covenanted by the Holder of every
Debt Security or Coupon with every other Holder and the Trustee, that no one or
more Holders shall have any right in any manner whatever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of any Holders, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to
<PAGE>
70
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all such Holders. For the
protection and enforcement of the provisions of this Section 6.04, each and
every Holder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision in this Indenture, however, the
right of any Holder of any Debt Security or Coupon to receive payment of the
principal of, and premium, if any, and (subject to Section 2.12) interest on,
such Debt Security or Coupon, on or after the respective due dates expressed in
such Debt Security, and to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 6.05. Remedies Cumulative; Delay or Omission in Exercise of
-----------------------------------------------------
Rights Not a Waiver of Default. All powers and remedies given by this Article
- -------------------------------
VI to the Trustee or to the Holders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the Holders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any Holder to exercise any right or power accruing upon any Default
occurring and continuing as aforesaid, shall impair any such right or power, or
shall be construed to be a waiver of any such Default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article VI or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Holders.
SECTION 6.06. Rights of Holders of Majority in Principal Amount of
----------------------------------------------------
Debt Securities to Direct Trustee and to Waive Default. The Holders of a
- -------------------------------------------------------
majority in aggregate principal amount of the Debt Securities of any series at
the time Outstanding shall have the right to 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, with respect to the Debt
Securities of such series; provided, however, that such direction shall not be
-------- -------
otherwise than in accordance with law and the provisions of this Indenture, and
that subject to the provisions of Section 7.01, the Trustee shall have the right
to decline to follow any such direction if the Trustee being advised by counsel
shall determine that the action so directed may not lawfully be taken, or if the
Trustee shall
<PAGE>
71
by a responsible officer or officers determine that the action so
directed would involve it in personal liability or would be unjustly prejudicial
to Holders of Debt Securities of such series not taking part in such direction;
and provided, further, however, that nothing in this Indenture contained shall
-------- ------- -------
impair the right of the Trustee to take any action deemed proper by the Trustee
and which is not inconsistent with such direction by such Holders. Prior to the
acceleration of the maturity of the Debt Securities of any series, as provided
in Section 6.01, the Holders of a majority in aggregate principal amount of the
Debt Securities of that series at the time Outstanding may on behalf of the
Holders of all the Debt Securities and any related Coupons of that series waive
any past Default or Event of Default and its consequences for that series
specified in the terms thereof as contemplated by Section 2.03, except (i) a
Default in the payment of the principal of, and premium, if any, or interest on,
any of the Debt Securities or in the payment of any related Coupon and (ii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Holder affected thereby. In case of any such
waiver, such Default shall cease to exist, any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture, and the Company, the Trustee and the Holders of the Debt Securities
of that series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.
SECTION 6.07. Trustee to Give Notice of Defaults Known to It, but May
-------------------------------------------------------
Withhold Such Notice in Certain Circumstances. The Trustee shall, within 90
- ----------------------------------------------
days after the occurrence of a Default known to it with respect to a series of
Debt Securities or Coupons, if any, give to the Holders thereof, in the manner
provided in Section 13.03, notice of all Defaults with respect to such series
known to the Trustee, unless such Defaults shall have been cured or waived
before the giving of such notice; provided, however, that, except in the case of
-------- -------
Default in the payment of the principal of, or premium, if any, or interest on,
any of the Debt Securities or Coupons of such series or in the making of any
sinking fund payment with respect to the Debt Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a committee of directors or
responsible officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders thereof.
<PAGE>
72
SECTION 6.08. Requirement of an Undertaking To Pay Costs in Certain
-----------------------------------------------------
Suits under the Indenture or Against the Trustee. All parties to this Indenture
- -------------------------------------------------
agree, and each Holder of any Debt Security or Coupon by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit in the manner and to the extent provided in the Trust Indenture
Act, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 6.08 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than ten percent in principal
amount of the Outstanding Debt Securities of that series or to any suit
instituted by any Holder for the enforcement of the payment of the principal of,
or premium, if any, or interest on, any Debt Security or Coupon on or after the
due date for such payment expressed in such Debt Security or Coupon.
ARTICLE VII
Concerning the Trustee
----------------------
SECTION 7.01. Certain Duties and Responsibilities. The Trustee,
------------------------------------
prior to the occurrence of an Event of Default and after the curing or waiving
of all Events of Default which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture. In
case an Event of Default has occurred (which has not been cured or waived), 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 man would exercise or use under the circumstances in the conduct of his
own affairs.
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 wilful misconduct, except that:
(a) this subsection shall not be construed to limit the effect of the
first paragraph of this Section 7.01;
<PAGE>
73
(b) prior to the occurrence of an Event of Default with respect to the
Debt Securities of a series and after the curing or waiving of all Events
of Default with respect to such series which may have occurred:
(1) the duties and obligations of the Trustee with respect to
Debt Securities and Coupons, if any, of any series shall be determined
solely by the express provisions of this Indenture, and the Trustee
shall not be liable except for the performance of such duties and
obligations with respect to such series as are specifically set forth
in this Indenture, and no implied covenants or obligations with
respect to such series shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture; but the Trustee
shall examine the evidence furnished to it pursuant to Section 5.03 to
determine whether or not such evidence conforms to the requirement of
this Indenture;
(c) the Trustee shall not be liable for an error of judgment made in
good faith by a responsible officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(d) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it with respect to Debt Securities of any series
in good faith in accordance with the direction of the Holders of not less
than a majority in aggregate principal amount of the Outstanding Debt
Securities of that series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to Debt Securities of such series.
<PAGE>
74
None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any Personal financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 7.02. Certain Rights of Trustee. Except as otherwise
--------------------------
provided in Section 7.01:
(a) 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 or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Company Order (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a
copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel, and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders of Debt Securities or Coupons of any series
pursuant to the provisions of this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be Incurred therein or thereby;
<PAGE>
75
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default and after the
curing of all Events of Default which may have occurred, 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, approval or other paper or
document, unless requested in writing to do so by the Holders of a majority
in aggregate principal amount of the then Outstanding Debt Securities of a
series affected by such matter; provided, however, that if the payment
-------- -------
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be Incurred by it in the making of such investigation
is not, in the opinion of the Trustee, reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such costs, expenses or liabilities as
a condition to so proceeding. The reasonable expense of every such
investigation shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company upon demand;
(g) 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 by it with due
care hereunder; and
(h) if any property other than cash shall at any time be subject to a
Lien in favor of the Holders, the Trustee, if and to the extent authorized
by a receivership or bankruptcy court of competent jurisdiction or by the
supplemental instrument subjecting such property to such lien, shall be
entitled to make advances for the purpose of preserving such property or of
discharging tax Liens or other prior Liens or encumbrances thereon.
SECTION 7.03. Trustee Not Liable for Recitals in Indenture or in Debt
-------------------------------------------------------
Securities. The recitals contained herein, in the Debt Securities (except the
- -----------
Trustee's certificate of authentication) and in any Coupons shall be taken as
the statements of the Company, and the Trustee
<PAGE>
76
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debt Securities or Coupons, if any, of any series, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Debt Securities and perform its obligations hereunder, and that
the statements made by it or to be made by it in a Statement of Eligibility and
Qualification on Form T-1 supplied to the Company are true and accurate. The
Trustee shall not be accountable for the use or application by the Company of
any of the Debt Securities or of the proceeds thereof.
SECTION 7.04. Trustee, Paying Agent or Registrar May Own Debt
-----------------------------------------------
Securities. The Trustee or any paying agent or Registrar, in its individual or
- -----------
any other capacity, may become the owner or pledgee of Debt Securities or
Coupons and subject to the provisions of the Trust Indenture Act relating to
conflicts of interest and preferential claims may otherwise deal with the
Company with the same rights it would have if it were not Trustee, paying agent
or Registrar.
SECTION 7.05. Moneys Received by Trustee to Be Held in Trust.
-----------------------------------------------
Subject to the provisions of Section 11.05, all moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder. So long as no
Event of Default shall have occurred and be continuing, all interest allowed on
any such moneys shall be paid from time to time to the Company upon a Company
Order.
SECTION 7.06. Compensation and Reimbursement. The Company covenants
-------------------------------
and agrees to pay in Dollars to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for all services rendered by it
hereunder (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and, except as otherwise
expressly provided herein, the Company will pay or reimburse in Dollars the
Trustee upon its request for all reasonable expenses, disbursements and advances
Incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents, attorneys and counsel and of all Persons not
regularly in its employ) except any such expense, disbursement or advances as
may arise from its negligence or bad faith. The Company also covenants to
indemnify in
<PAGE>
77
Dollars the Trustee for, and to hold it harmless against, any loss,
liability or expense Incurred without negligence, wilful misconduct or bad faith
on the part of the Trustee, arising out of or in connection with the acceptance
or administration of this trust or trusts hereunder, including the reasonable
costs and expenses of defending itself against any claim of liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligations of the Company under this Section 7.06 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be secured by a Lien prior to that of the Debt
Securities and Coupons, if any, upon all property and funds held or collected by
the Trustee, as such, except funds held in trust for the payment of principal
of, and premium, if any, or interest on, particular Debt Securities and Coupons.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency, reorganization or other similar
law.
SECTION 7.07. Right of Trustee to Rely on an Officers' Certificate
----------------------------------------------------
Where No Other Evidence Specifically Prescribed. Except as otherwise provided
- ------------------------------------------------
in Section 7.01, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 7.08. Separate Trustee; Replacement of Trustee. The Company
-----------------------------------------
may, but need not, appoint a separate Trustee for any one or more series of Debt
Securities. The Trustee may resign with respect to one or more or all series of
Debt Securities at any time by giving notice to the Company. The Holders of a
majority in principal amount of the Debt Securities of a particular series may
remove the
<PAGE>
78
Trustee for such series and only such series by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Debt Securities of a particular series and
such Holders do not reasonably promptly appoint a successor Trustee, or if a
vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee. No resignation or removal of the Trustee
and no appointment of a successor Trustee shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section 7.08.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Debt Securities of each applicable series. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the Lien provided for in Section 7.06.
If a successor Trustee does not take office within 60 days after the
retiring Trustee gives notice of resignation or is removed, the retiring Trustee
or the Holders of 25% in principal amount of the Debt Securities of any
applicable series may petition any court of competent jurisdiction for the
appointment of a successor Trustee for the Debt Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of Debt
Securities of any applicable series may petition any court of competent
jurisdiction for the removal
<PAGE>
79
of the Trustee and the appointment of a successor Trustee for the Debt
Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.06 shall continue for
the benefit of the retiring Trustee.
In the case of the appointment hereunder of a separate or successor
trustee with respect to the Debt Securities of one or more series, the Company,
any retiring Trustee and each successor or separate Trustee with respect to the
Debt Securities of any applicable series shall execute and deliver an Indenture
supplemental hereto (1) which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of any retiring Trustee with respect to the Debt Securities of any series as to
which any such retiring Trustee is not retiring shall continue to be vested in
such retiring Trustee and (2) that shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental Indenture shall
constitute such Trustee's co-trustees of the same trust and that each such
separate, retiring or successor Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
----------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Debt Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Debt Securities so
authenticated; and in case at that time any of the Debt Securities shall not
have been authenticated, any successor to the Trustee may authenticate such Debt
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Debt Securities
<PAGE>
80
or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
------------------------------
all times satisfy the requirements of Section 310(a) of the Trust Indenture Act.
The Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. No obligor
upon the Debt Securities or Coupons, if any, of a particular series or Person
directly or indirectly controlling, controlled by or under common control with
such obligor shall serve as Trustee upon the Debt Securities and Coupons of such
series. The Trustee shall comply with Section 310(b) of the Trust Indenture
Act; provided, however, that there shall be excluded from the operation of
-------- -------
Section 310(b)(1) of the Trust Indenture Act this Indenture or any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in Section 310(b)(1) of the Trust
Indenture Act are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
--------------------------------------------------
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act.
A Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
SECTION 7.12. Compliance with Tax Laws. The Trustee hereby agrees to
-------------------------
comply with all U.S. Federal income tax information reporting and withholding
requirements applicable to it with respect to payments of premium (if any) and
interest on the Debt Securities, whether acting as Trustee, Security Registrar,
paying agent or otherwise with respect to the Debt Securities.
ARTICLE VIII
Concerning the Holders
----------------------
SECTION 8.01. Evidence of Action by Holders. Whenever in this
-------------------------------
Indenture it is provided that the Holders of a specified percentage in aggregate
principal amount of the Debt Securities of any or all series may take action
(including the making of any demand or request, the giving of any direction,
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the Holders of such specified percentage have
<PAGE>
81
joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by Holders in Person or by agent or proxy
appointed in writing, (b) by the record of the Holders voting in favor thereof
at any meeting of Holders duly called and held in accordance with the provisions
of Section 5.02 or (c) by a combination of such instrument or instruments and
any such record of such a meeting of Holders.
SECTION 8.02. Proof of Execution of Instruments and of Holding of
---------------------------------------------------
Debt Securities. Subject to the provisions of Sections 7.01, 7.02 and 13.11,
- ----------------
proof of the execution of any instrument by a Holder or his agent or proxy shall
be sufficient if made in accordance with such reasonable rules and regulations
as may be prescribed by the Trustee or in such manner as shall be satisfactory
to the Trustee.
The ownership of Registered Securities of any series shall be proved
by the Debt Security Register or by a certificate of the Registrar for such
series.
The ownership of Bearer Securities shall be proved by production of
such Bearer Securities or by a certificate executed by any bank or trust
company, which certificate shall be dated and shall state on the date thereof a
Bearer Security bearing a specified identifying number or other mark was
deposited with or exhibited to the Person executing such certificate by the
Person named in such certificate, or by any other proof of possession reasonably
satisfactory to the Trustee. The holding by the Person named in any such
certificate of any Bearer Security specified therein shall be presumed to
continue for a period of one year unless at the time of determination of such
holding (1) another certificate bearing a later date issued in respect of the
same Bearer Security shall be produced, (2) such Bearer Security shall be
produced by some other Person, (3) such Bearer Security shall have been
registered on the Debt Security Register, if, pursuant to Section 2.03, such
Bearer Security can be so registered, or (4) such Bearer Security shall have
been canceled or paid.
The Trustee may require such additional proof of any matter referred
to in this Section 8.02 as it shall deem necessary.
SECTION 8.03. Who May Be Deemed Owner of Debt Securities. Prior to
-------------------------------------------
due presentment for registration of transfer of any Registered Security, the
Company, the Trustee, any paying agent and any Registrar may deem and treat the
Person in whose name any Registered Security shall
<PAGE>
82
be registered upon the books of the Company as the absolute owner of such
Registered Security (whether or not such Registered Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and premium,
if any, and (subject to Section 2.03) interest on such Registered Security and
for all other purposes, and neither the Company nor the Trustee nor any paying
agent nor any Registrar shall be affected by any notice to the contrary; and all
such payments so made to any such Holder for the time being, or upon his order,
shall be valid and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon any such Registered
Security.
The Company, the Trustee and any paying agent may deem and treat the
Holder of any Bearer Security or Coupon as the absolute owner of such Bearer
Security or Coupon (whether or not such Debt Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and premium,
if any, and (subject to Section 2.03) interest on such Bearer Security or Coupon
and for all other purposes, and neither the Company nor the Trustee nor any
paying agent shall be affected by any notice to the contrary; and all such
payments so made to any such Holder for the time being, or upon his order, shall
be valid and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Bearer Security or
Coupon.
None of the Company, the Trustee, any paying agent or the Registrar
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
SECTION 8.04. Instruments Executed by Holders Bind Future Holders.
----------------------------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as provided
in Section 8.01, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Debt Securities of any series specified in
this Indenture in connection with such action and subject to the following
paragraph, any Holder of a Debt Security which is shown by the evidence to be
included in the Debt Securities the Holders of which have consented to such
action may, by filing written notice with the Trustee at its corporate trust
office and upon proof of holding as provided in Section 8.02, revoke such action
so
<PAGE>
83
far as concerns such Debt Security. Except as aforesaid any such action
taken by the Holder of any Debt Security shall be conclusive and binding upon
such Holder and upon all future Holders and owners of such Debt Security and all
past, present and future Holders of Coupons, if any, appertaining thereto, and
of any Debt Security issued upon transfer thereof or in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Debt Security or such other Debt Securities or Coupons. Any action
taken by the Holders of the percentage in aggregate principal amount of the Debt
Securities of any series specified in this Indenture in connection with such
action shall be conclusively binding upon the Company, the Trustee and the
Holders of all the Securities and Coupons of such series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Registered Securities entitled to give
their consent or take any other action required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders of Registered
Securities at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders of Registered Securities after such record date. No such
consent shall be valid or effective for more than 120 days after such record
date unless the consent of the Holders of the percentage in aggregate principal
amount of the Debt Securities of such series specified in this Indenture shall
have been received within such 120-day period.
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. Purposes for Which Supplemental Indenture May Be
------------------------------------------------
Entered into Without Consent of Holders. The Company, when authorized by a
- ----------------------------------------
resolution of the Board of Directors, and the Trustee may from time to time and
at any time, without the consent of Holders, enter into an Indenture or
Indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof) for one or
more of the following purposes:
(a) to evidence the succession pursuant to Article X of another Person
to the Company, or
<PAGE>
84
successive successions, and the assumption by the Successor Company (as
defined in Section 10.01) of the covenants, agreements and obligations of
the Company in this Indenture and in the Debt Securities;
(b) to surrender any right or power herein conferred upon the Company,
to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders of
all or any series of Debt Securities and the Coupons, if any, appertaining
thereto (and if such covenants are to be for the benefit of less than all
series of Debt Securities, stating that such covenants are expressly being
included solely for the benefit of such series) as the Board of Directors
shall consider to be for the protection of the Holders of such Debt
Securities, and to make the occurrence, or the occurrence and continuance,
of a Default in any of such additional covenants, restrictions, conditions
or provisions a Default or an Event of Default permitting the enforcement
of all or any of the several remedies provided in this Indenture; provided,
--------
however, that in respect of any such additional covenant, restriction,
-------
condition or provision such supplemental Indenture may provide for a
particular period of grace after Default (which period may be shorter or
longer than that allowed in the case of other Defaults) or may provide for
an immediate enforcement upon such Default or may limit the remedies
available to the Trustee upon such Default or may limit the right of the
Holders of a majority in aggregate principal amount of any or all series of
Debt Securities to waive such default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein, in any supplemental Indenture or in any Debt Securities
of any series that may be defective or inconsistent with any other
provision contained herein, in any supplemental Indenture or in the Debt
Securities of such series; to convey, transfer, assign, mortgage or pledge
any property to or with the Trustee, or to make such other provisions in
regard to matters or questions arising under this Indenture as shall not
adversely affect the interests of any Holders of Debt Securities of any
series;
(d) to modify or amend this Indenture in such a manner as to permit
the qualification of this Indenture or any Indenture supplemental hereto
under the Trust Indenture Act as then in effect, except that nothing herein
contained shall permit or authorize the
<PAGE>
85
inclusion in any Indenture supplemental hereto of the provisions referred
to in Section 316(a)(2) of the Trust Indenture Act;
(e) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registerable as to principal, to
change or eliminate any restrictions on the payment of principal of, or
premium, if any, on, Registered Securities or of principal of, or premium,
if any, or interest on, Bearer Securities or to permit Registered
Securities to be exchanged for Bearer Securities; provided, however, that
-------- -------
any such action shall not adversely affect the interests of the Holders of
Debt Securities or any Coupons of any series in any material respect or
permit or facilitate the issuance of Debt Securities of any series in
uncertificated form;
(f) to comply with Article X;
(g) in the case of any Debt Securities and Coupons, if any,
appertaining thereto subordinated pursuant to Article XII, to make any
change in Article XII that would limit or terminate the benefits available
to any holder of Senior Indebtedness (or Representatives therefor) under
Article XII;
(h) to add Guarantees with respect to the Debt Securities or to secure
the Debt Securities;
(i) to make any change that does not adversely affect the rights of
any Holder;
(j) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Debt Securities; provided,
however, that any such addition, change or elimination not otherwise
permitted under this Section 9.01 shall (i) neither (A) apply to any Debt
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Debt Security with respect to such
provision or (ii) shall become effective only when there is no such Debt
Security Outstanding;
(k) to evidence and provide for the acceptance of appointment
hereunder by a successor or separate Trustee with respect to the Debt
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to
<PAGE>
86
provide for or facilitate the administration of the trusts hereunder by
more than one Trustee; and
(l) to establish the form or terms of Debt Securities and Coupons, if
any, of any series as permitted by Sections 2.01 and 2.03.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental Indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
Indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental Indenture authorized by the provisions of this
Section 9.01 may be executed by the Company and the Trustee without the consent
of the Holders of any of the Debt Securities or Coupons, if any, appertaining
thereto at the time Outstanding, notwithstanding any of the provisions of
Section 9.02.
In the case of Debt Securities or Coupons, if any, appertaining
thereto subordinated pursuant to Article XII, an amendment under this Section
9.01 may not make any change that adversely affects the rights under Article XII
of any holder of Senior Indebtedness then outstanding unless the holders of such
Senior Indebtedness (or any group or Representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Holders of Debt Securities of each series affected thereby
a notice briefly describing such amendment. The failure to give such notice to
all such Holders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section 9.01.
SECTION 9.02. Modification of Indenture with Consent of Holders of
----------------------------------------------------
Debt Securities. Without notice to any Holder but with the consent (evidenced
- ----------------
as provided in Section 8.01) of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such supplemental Indenture, the Company, when authorized by a
resolution of the Board of Directors, and the Trustee may from time to time and
at any time enter into an Indenture or Indentures supplemental hereto (which
shall conform to the provisions
<PAGE>
87
of the Trust Indenture Act as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental Indenture or of
modifying in any manner the rights of the Holders of the Debt Securities of such
series; provided, however, that no such supplemental Indenture, without the
-------- -------
consent of the Holders of each Debt Security so affected, shall (i) reduce the
percentage in principal amount of Debt Securities of any series whose Holders
must consent to an amendment; (ii) reduce the rate of or extend the time for
payment of interest on any Debt Security or Coupon or reduce the amount of any
payment to be made with respect to any Coupon; (iii) reduce the principal of or
extend the Stated Maturity of any Debt Security; (iv) reduce the premium payable
upon the redemption of any Debt Security or change the time at which any Debt
Security may or shall be redeemed in accordance with Article III; (v) make any
Debt Security or Coupon payable in Currency other than that stated in the Debt
Security; (vi) in the case of any Debt Security or Coupons, if any, appertaining
thereto subordinated pursuant to Article XII, make any change in Article XII
that adversely affects the rights of any Holder under Article XII; (vii) release
any security that may have been granted in respect of the Debt Securities;
(viii) make any change in Section 6.06 or this Section 9.02; (ix) change any
obligation of the Company to pay additional interest pursuant to Section 4.06;
or (x) limit the obligation of the Company to maintain a paying agency outside
the United States for payment on Bearer Securities as provided in Section 4.02
or limit the obligation of the Company to redeem a Bearer Security as provided
in Section 3.02(b).
A supplemental Indenture which changes or eliminates any covenant or
other provision of this Indenture which has been expressly included solely for
the benefit of one or more particular series of Debt Securities and Coupons, if
any, or which modifies the rights of the Holders of Debt Securities and Coupons
of such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Debt Securities
and Coupons, if any, of any other series.
Upon the request of the Company, accompanied by a copy of a resolution
of the Board of Directors authorizing the execution of any such supplemental
Indenture, and upon the filing with the Trustee of evidence of the consent of
Holders as aforesaid, the Trustee shall join with the Company in the execution
of such supplemental Indenture unless such supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or
<PAGE>
88
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed supplemental
Indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
In the case of any Debt Securities or Coupons, if any, appertaining
thereto, subordinated pursuant to Article XII, an amendment under this Section
9.02 may not make any change that adversely affects the rights under Article XII
of any holder of Senior Indebtedness then outstanding unless the holders of such
Senior Indebtedness (or any group or Representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders of Debt Securities of each series affected thereby
a notice briefly describing such amendment. The failure to give such notice to
all such Holders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section 9.02.
SECTION 9.03. Effect of Supplemental Indentures. Upon the execution
----------------------------------
of any supplemental Indenture pursuant to the provisions of this Article IX,
this Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental Indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 7.01 and 7.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental Indenture complies with the provisions of
this Article IX.
SECTION 9.04. Debt Securities May Bear Notation of Changes by
-----------------------------------------------
Supplemental Indentures. Debt Securities and Coupons, if any, of any series
- ------------------------
authenticated and delivered after the execution of any supplemental Indenture
pursuant to the provisions of this Article IX may, and shall if
<PAGE>
89
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental Indenture. New Debt Securities and
Coupons of any series so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental Indenture may be prepared and executed by the Company,
authenticated by the Trustee and delivered in exchange for the Debt Securities
and Coupons of such series then Outstanding. Failure to make the appropriate
notation or to issue a new Debt Security or Coupon of such series shall not
affect the validity of such amendment.
SECTION 9.05. Payment for Consent. Neither the Company nor any
--------------------
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Debt Securities or Coupons, if any,
appertaining thereto unless such consideration is offered to be paid to all
Holders that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE X
Consolidation, Merger, Sale or Conveyance
-----------------------------------------
SECTION 10.01. Consolidations and Mergers of the Company. The
------------------------------------------
Company shall not consolidate with or merge with or into any Person, or convey,
transfer or lease all or substantially all its assets, unless: (i) either (a)
the Company shall be the continuing Person in the case of a merger or (b) the
resulting, surviving or transferee Person if other than the Company (the
"Successor Company") shall be a corporation organized and existing under the
laws of the United States, any State thereof or the District of Columbia and the
Successor Company shall expressly assume, by an Indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Debt Securities and Coupons, if any,
according to their tenor, and this Indenture; (ii) immediately after giving
effect to such transaction (and treating any Indebtedness which becomes an
obligation of the Successor Company or any Subsidiary of the Company as a result
of such transaction as having been Incurred by the Successor Company or such
Subsidiary at the time of such transaction), no Default or Event of Default
would occur or be continuing; (iii) the Successor Company
<PAGE>
90
waives any right to redeem any Bearer Security under circumstances in which the
Successor Company would be entitled to redeem such Bearer Security but the
Company would not have been so entitled to redeem if the consolidation, merger,
conveyance, transfer or lease had not occurred; and (iv) the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer and such supplemental
Indenture (if any) comply with this Indenture.
SECTION 10.02. Rights and Duties of Successor Corporation. In case
-------------------------------------------
of any consolidation or merger, or conveyance or transfer of the assets of the
Company as an entirety or virtually as an entirety in accordance with Section
10.01, the Successor Company shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the party of the
first part, and the predecessor corporation shall be relieved of any further
obligation under the Indenture and the Securities. The Successor Company
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all the Debt Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of the Successor Company, instead of the Company,
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Debt Securities
and Coupons, if any, appertaining thereto, which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debt Securities and Coupons, if any, appertaining
thereto, which the Successor Company thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Debt Securities and Coupons,
if any, appertaining thereto so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Debt Securities and Coupons, if
any, appertaining thereto theretofore or thereafter issued in accordance with
the terms of this Indenture as though all such Debt Securities and Coupons had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the Debt
Securities and Coupons, if any, appertaining thereto thereafter to be issued as
may be appropriate.
<PAGE>
91
ARTICLE XI
Satisfaction and Discharge of Indenture; Defeasance;
----------------------------------------------------
Unclaimed Moneys
----------------
SECTION 11.01. Applicability of Article. If, pursuant to Section
-------------------------
2.03, provision is made for the defeasance of Debt Securities of a series and if
the Debt Securities of such series are Registered Securities and denominated and
payable only in Dollars (except as provided pursuant to Section 2.03), then the
provisions of this Article XI relating to defeasance of Debt Securities shall be
applicable except as otherwise specified pursuant to Section 2.03 for Debt
Securities of such series. Defeasance provisions, if any, for Debt Securities
denominated in a Foreign Currency or for Bearer Securities may be specified
pursuant to Section 2.03.
SECTION 11.02. Satisfaction and Discharge of Indenture; Defeasance.
----------------------------------------------------
(a) If at any time (i) the Company shall have delivered to the Trustee for
cancelation all Debt Securities of any series theretofore authenticated and
delivered (other than (1) Coupons appertaining to Bearer Securities of such
series called for redemption and maturing after the relevant redemption date,
surrender of which has been waived, (2) any Debt Securities and Coupons of such
series which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.09 and (3) Debt Securities and Coupons
for whose payment money has theretofore been deposited in trust and thereafter
repaid to the Company as provided in Section 11.05) or (ii) all Debt Securities
and the Coupons, if any, of such series not theretofore delivered to the Trustee
for cancelation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company shall deposit with the Trustee as trust funds the
entire amount in the Currency in which such Debt Securities are denominated
(except as otherwise provided pursuant to Section 2.03) sufficient to pay at
maturity or upon redemption all Debt Securities of such series not theretofore
delivered to the Trustee for cancelation, including principal and premium, if
any, and interest due or to become due on such date of maturity or redemption
date, as the case may be, and if in either case the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect (except as to any surviving rights
of registration of transfer or exchange of such Debt Securities herein expressly
provided for and
<PAGE>
92
rights to receive payments of principal of, and premium, if any, and interest
on, such Debt Securities and any right to receive additional interest as
provided in Section 4.06) with respect to the Debt Securities of such series,
and the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture.
(b) Subject to Sections 11.02(c), 11.03 and 11.07, the Company at any
time may terminate, with respect to Debt Securities of a particular series, (i)
all its obligations under the Debt Securities of such series and this Indenture
with respect to the Debt Securities of such series ("legal defeasance option")
or (ii) its obligations with respect to the Debt Securities of such series under
clause (iii) of Section 10.01 and the related operation of Section 6.01(d) and
the operation of Sections 6.01(e), (f), (i) and (j) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Debt Securities of the defeased series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Debt Securities of the defeased series may not be accelerated
because of an Event of Default specified in Sections 6.01(d), (e), (f), (i) and
(j) (except to the extent covenants or agreements referenced in such Sections
remain applicable).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.07, 2.09, 4.02, 4.04, 5.01, 7.06, 7.10, 11.05, 11.06
and 11.07 shall survive until the Debt Securities of the defeased series have
been paid in full. Thereafter, the Company's obligations in
Sections 7.06, 11.05 and 11.06 shall survive.
SECTION 11.03. Conditions of Defeasance. The Company may exercise
-------------------------
its legal defeasance option or its
<PAGE>
93
covenant defeasance option with respect to Debt Securities of a particular
series only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of, and
premium, if any, and interest on, the Debt Securities of such series to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay the principal, premium and
interest when due on all the Debt Securities of such series to maturity or
redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(g) or (h) with respect to the
Company occurs which is continuing at the end of the period;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company and, if the Debt Securities of such series
are subordinated pursuant to Article XII, is not prohibited by Article XII;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(7) in the event of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from the Internal Revenue Service a ruling, or (ii)
since the date of this Indenture there has been a change in the applicable
United States Federal income tax law, in either case of the effect that,
and based thereon such Opinion of Counsel shall confirm that, the Holders
of Debt Securities of such series will not recognize income, gain or loss
for United States
<PAGE>
94
Federal income tax purposes as a result of such defeasance and will be
subject to United States Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
defeasance had not occurred;
(8) in the event of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of Debt Securities of such series will not recognize income, gain
or loss for United States Federal income tax purposes as a result of such
covenant defeasance and will be subject to United States Federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred; and
(9) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Debt Securities of such series as
contemplated by this Article XI have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Debt Securities of such series
at a future date in accordance with Article III.
SECTION 11.04. Application of Trust Money. The Trustee shall hold in
---------------------------
trust money or U.S. Government Obligations deposited with it pursuant to this
Article XI. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Debt Securities and Coupons, if any, of the defeased series. In the event
the Debt Securities and Coupons, if any, of the defeased series are subordinated
pursuant to Article XII, money and securities so held in trust are not subject
to Article XII.
SECTION 11.05. Repayment to Company. The Trustee and any paying
---------------------
agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and any
paying agent shall pay to the Company upon request any money held by them for
the payment of principal, premium or interest that remains unclaimed for
<PAGE>
95
two years, and, thereafter, Holders entitled to such money must look to the
Company for payment as general creditors.
SECTION 11.06. Indemnity for U.S. Government Obligations. The
------------------------------------------
Company shall pay and shall indemnify the Trustee and the Holders against any
tax, fee or other charge imposed on or assessed against deposited U.S.
Government Obligations or the principal and interest received on such U.S.
Government Obligations.
SECTION 11.07. Reinstatement. If the Trustee or any paying agent is
--------------
unable to apply any money or U.S. Government Obligations in accordance with this
Article XI by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debt Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article XI until
such time as the Trustee or any paying agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article XI.
ARTICLE XII
Subordination of Debt Securities
--------------------------------
SECTION 12.01. Applicability of Article; Agreement To Subordinate.
---------------------------------------------------
The provisions of this Article XII shall be applicable to the Debt Securities of
any series (Debt Securities of such series referred to in this Article XII as
"Subordinated Debt Securities") designated, pursuant to Section 2.03, as
subordinated to Senior Indebtedness. Each Holder by accepting a Subordinated
Debt Security agrees that the Indebtedness evidenced by such Subordinated Debt
Security is subordinated in right of payment, to the extent and in the manner
provided in this Article XII, to the prior payment of all Senior Indebtedness
and that the subordination is for the benefit of and enforceable by the holders
of Senior Indebtedness. All provisions of this Article XII shall be subject to
Section 12.12.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
--------------------------------------
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
<PAGE>
96
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 Senior Indebtedness (including interest (if
any), accruing on or after the commencement of a proceeding in bankruptcy,
whether or not allowed as a claim against the Company in such bankruptcy
proceeding) before Holders of Subordinated Debt Securities shall be
entitled to receive any payment of principal of, or premium, if any, or
interest on, the Subordinated Debt Securities; and
(2) until the Senior Indebtedness is paid in full, any distribution to
which Holders of Subordinated Debt Securities would be entitled but for
this Article XII shall be made to holders of Senior Indebtedness as their
interests may appear, except that such Holders may receive shares of stock
and any debt securities that are subordinated to Senior Indebtedness to at
least the same extent as the Subordinated Debt Securities.
SECTION 12.03. Default on Senior Indebtedness. The Company may not
-------------------------------
pay the principal of, or premium, if any, or interest on, the Subordinated Debt
Securities or make any deposit pursuant to Article XI and may not repurchase,
redeem or otherwise retire (except, in the case of Subordinated Debt Securities
that provide for a mandatory sinking fund pursuant to Section 3.05, by the
delivery of Subordinated Debt Securities by the Company to the Trustee pursuant
to the first paragraph of Section 3.06) any Debt Securities (collectively, "pay
the Subordinated Debt Securities") if (i) any principal, premium or interest in
respect of Senior Indebtedness is not paid within any applicable grace period
(including at maturity) or (ii) any other default on Senior Indebtedness occurs
and the maturity of such Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (x) the default has been cured or waived and
any such acceleration has been rescinded or (y) such Senior Indebtedness has
been paid in full in cash; provided, however, that the Company may pay the
-------- -------
Subordinated Debt Securities without regard to the foregoing if the Company and
the Trustee receive written notice approving such payment from the
Representative of each issue of Designated Senior Indebtedness. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the preceding sentence) with respect to any Senior Indebtedness pursuant to
which the maturity thereof may be accelerated immediately without
<PAGE>
97
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, the Company may
not pay the Subordinated Debt Securities for a period (a "Payment Blockage
Period") commencing upon the receipt by the Company and the Trustee of written
notice of such default from the Representative of any Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period (a
"Blockage Notice") and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) by
repayment in full in cash of such Designated Senior Indebtedness or (iii)
because the default giving rise to such Blockage Notice is no longer
continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section 12.03), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Company may resume payments
on the Subordinated Debt Securities after such Payment Blockage Period. Not more
than one Blockage Notice may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to any number of issues of
Senior Indebtedness during such period; provided, however, that if any Blockage
-------- -------
Notice within such 360-day period is given by or on behalf of any holders of
Designated Senior Indebtedness (other than the Bank Indebtedness), the
Representative of the Bank Indebtedness may give another Blockage Notice within
such period; provided further, however, that in no event may the total number of
-------- ------- -------
days during which any Payment Blockage Period or Periods is in effect exceed 179
days in the aggregate during any 360 consecutive day period. For purposes of
this Section 12.03, no default or event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Senior Indebtedness initiating such Payment Blockage Period shall
be, or be made, the basis of the commencement of a subsequent Payment Blockage
Period by the Representative of such Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 12.04. Acceleration of Payment of Debt Securities. If payment
-------------------------------------------
of the Subordinated Debt Securities is accelerated because of an Event of
Default, the Company or the Trustee shall promptly notify the holders of the
<PAGE>
98
Designated Senior Indebtedness (or their Representatives) of the acceleration.
SECTION 12.05. When Distribution Must Be Paid Over. If a
------------------------------------
distribution is made to Holders of Subordinated Debt Securities that because of
this Article XII should not have been made to them, the Holders who receive such
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness is paid in
------------
full and until the Subordinated Debt Securities are paid in full, Holders
thereof shall be subrogated to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness. A distribution made
under this Article XII to holders of Senior Indebtedness which otherwise would
have been made to Holders of Subordinated Debt Securities is not, as between the
Company and such Holders, a payment by the Company on Senior Indebtedness.
SECTION 12.07. Relative Rights. This Article XII defines the
----------------
relative rights of Holders of Subordinated Debt Securities and holders of Senior
Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of either Subordinated
Debt Securities or Debt Securities, the obligation of the Company, which is
absolute and unconditional, to pay principal of, and premium, if any, and
interest on, the Subordinated Debt Securities and the Debt Securities in
accordance with their terms; or
(2) prevent the Trustee or any Holder of either Subordinated Debt
Securities or Debt Securities from exercising its available remedies upon a
Default, subject to the rights of holders of Senior Indebtedness to
receive distributions otherwise payable to Holders of Subordinated Debt
Securities.
SECTION 12.08. 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 Subordinated Debt Securities shall be impaired by
any act or failure to act by the Company or by its failure to comply with this
Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
-----------------------------------
Section 12.03, the Trustee or any
<PAGE>
99
paying agent may continue to make payments on Subordinated Debt Securities and
shall not be charged with knowledge of the existence of facts that would
prohibit the making of any such payments unless, not less than two business days
prior to the date of such payment, a responsible officer of the Trustee receives
notice satisfactory to it that payments may not be made under this Article XII.
The Company, the Registrar, any paying agent, a Representative or a holder of
Senior Indebtedness may give the notice; provided, however, that, if an issue of
-------- -------
Senior Indebtedness has a Representative, only the Representative may give the
notice.
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. The
Registrar and any paying agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article XII with respect
to any Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness; and nothing in Article VII
shall deprive the Trustee of any of its rights as such holder. Nothing in this
Article XII shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.06.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
------------------------------------------
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 12.11. Article XII Not To Prevent Defaults or Limit Right to
-----------------------------------------------------
Accelerate. The failure to make a payment pursuant to the Debt Securities by
- -----------
reason of any provision in this Article XII shall not be construed as preventing
the occurrence of a Default. Nothing in this Article XII shall have any effect
on the right of the Holders or the Trustee to accelerate the maturity of either
the Subordinated Debt Securities or the Debt Securities, as the case may be.
SECTION 12.12. Trust Moneys Not Subordinated. Notwithstanding
------------------------------
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article XI by the Trustee for
the payment of principal of, and premium, if any, and interest on, the
Subordinated Debt Securities or the Debt Securities shall not be subordinated to
the prior payment of any Senior Indebtedness or subject to the restrictions set
forth in this Article XII, and none of the Holders thereof shall be obligated to
pay over any such amount to the
<PAGE>
100
Company or any holder of Senior Indebtedness of the Company or any other
creditor of the Company.
SECTION 12.13. Trustee Entitled To Rely. Upon any payment or
-------------------------
distribution pursuant to this Article XII, the Trustee and the Holders shall be
entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to such
Holders or (iii) upon the Representatives for the holders of Senior Indebtedness
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XII. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article XII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article XII.
SECTION 12.14. Trustee To Effectuate Subordination. Each Holder by
-------------------------------------
accepting a Subordinated Debt Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination between the Holders of Subordinated Debt
Securities and the holders of Senior Indebtedness as provided in this Article
XII and appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.15. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
- -------------
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Holders of Subordinated Debt
Securities or the Company or any other Person, money or
<PAGE>
101
assets to which any holders of Senior Indebtedness shall be entitled by virtue
of this Article XII or otherwise.
SECTION 12.16. Reliance by Holders of Senior Indebtedness on
---------------------------------------------
Subordination Provisions. Each Holder by accepting a Subordinated Debt Security
- -------------------------
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Subordinated Debt Securities, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
ARTICLE XIII
Miscellaneous Provisions
------------------------
SECTION 13.01. Successors and Assigns of Company Bound by Indenture.
-----------------------------------------------------
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Company or the Trustee shall bind its
successors and assigns, whether so expressed or not.
SECTION 13.02. Acts of Board, Committee or Officer of Successor
--------------------------- --------------------
Company Valid. Any act or proceeding by any provision of this Indenture
- --------------
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any Successor Company.
SECTION 13.03. Required Notices or Demands. Except as otherwise
----------------------------
expressly provided in this Indenture, any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the Holders to or on the Company may be given or served by
being deposited postage prepaid in a post office letter box in the United States
addressed (until another address is filed by the Company with the Trustee) as
follows: ChiRex Inc., 300 Atlantic Street, Suite 402, Stamford, Connecticut
06901, Attention: General Counsel. Except as otherwise expressly provided in
this Indenture, any notice, direction, request or demand by the Company or by
any Holder to or upon the Trustee may be given or made, for all purposes, by
being deposited postage prepaid in a post office letter box in the United States
addressed to the
<PAGE>
102
corporate trust office of the Trustee initially at 114 West 47th Street, New
York, New York 10036-1532. The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice required or permitted to a Registered Holder by the Company
or the Trustee pursuant to the provisions of this Indenture shall be deemed to
be properly mailed by being deposited postage prepaid in a post office letter
box in the United States addressed to such Holder at the address of such Holder
as shown on the Debt Security Register. Any report pursuant to Section 313 of
the Trust Indenture Act shall be transmitted in compliance with subsection (c)
therein.
Any notice required or permitted to a Bearer Holder by the Company or
the Trustee pursuant to this Indenture shall be deemed to be properly given if
published on two separate business days in an Authorized Newspaper or Newspapers
in such Place or Places of Payment specified pursuant to Section 2.03, the first
such publication to be not earlier than the earliest date and not later than two
business days prior to the latest date prescribed for the giving of such notice.
Notwithstanding the foregoing, any notice to Holders of Floating Rate Debt
Securities regarding the determination of a periodic rate of interest, if such
notice is required pursuant to Section 2.03, shall be sufficiently given if
given in the manner specified pursuant to Section 2.03.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall constitute
sufficient notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspaper
or by reason of any other cause it shall be impracticable to give notice by
publication, then such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
Failure to mail a notice or communication to a Holder or any defect in
it or any defect in any notice by publication as to a Holder shall not affect
the sufficiency of such notice with respect to other Holders. If a notice or
communication is mailed or published in the manner provided above, it is
conclusively presumed duly given.
<PAGE>
103
SECTION 13.04. Indenture and Debt Securities To Be Construed in
------------------------------------------------
Accordance with the Laws of the State of New York. This Indenture, each Debt
- --------------------------------------------------
Security and each Coupon shall be deemed to be New York contracts, and for all
purposes shall be construed in accordance with the laws of said State (without
reference to principles of conflicts of law).
SECTION 13.05. Officers' Certificate and Opinion of Counsel To Be
--------------------------------------------------
Furnished upon Application or Demand by the Company. Upon any application or
- ----------------------------------------------------
demand by the Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the Person
making such certificate or opinion has read such covenant or condition, (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 13.06. Payments Due on Legal Holidays. In any case where the
-------------------------------
date of maturity of interest on or principal of and premium, if any, on the Debt
Securities of a series or the date fixed for redemption or repayment of any Debt
Security or the making of any sinking fund payment shall not be a business day
at any Place of Payment for the Debt Securities of such series, then payment of
interest or principal and premium, if any, or the making of such sinking fund
payment need not be made on such date at such Place of Payment, but may be made
on the next succeeding business day at such Place of Payment with the same force
and effect as
<PAGE>
104
if made on the date of maturity or the date fixed for redemption, and no
interest shall accrue for the period after such date. If a record date is not a
business day, the record date shall not be affected.
SECTION 13.07. Provisions Required by Trust Indenture Act to Control.
-----------------------------------------------------
If and to the extent that any provision of this Indenture limits, qualifies or
conflicts with another provision included in this Indenture which is required to
be included in this Indenture by any of Sections 310 to 318, inclusive, of the
Trust Indenture Act, such required provision shall control.
SECTION 13.08. Computation of Interest on Debt Securities. Interest,
-------------------------------------------
if any, on the Debt Securities shall be computed on the basis of a 360-day year
of twelve 30-day months, except as may otherwise be provided pursuant to Section
2.03.
SECTION 13.09. Rules by Trustee, Paying Agent and Registrar. The
---------------------------------------------
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and any paying agent may make reasonable rules for their functions.
SECTION 13.10. No Recourse Against Others. An incorporator or any
---------------------------
past, present or future director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Debt Securities, the Coupons or this Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Debt Security or Coupon, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for
the issue of the Debt Securities and Coupons.
SECTION 13.11. Severability. In case any provision in this
-------------
Indenture, the Debt Securities or the Coupons shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 13.12. Effect of Headings. The article and section headings
-------------------
herein and in the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 13.13. Indenture May Be Executed in Counterparts. This
------------------------------------------
Indenture may be executed in any number of counterparts, each of which shall be
an original; but
<PAGE>
105
such counterparts shall together constitute but one and the same instrument.
The Trustee hereby accepts the trusts in this Indenture upon the terms
and conditions herein set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly signed as of the date first written above.
CHIREX INC.,
by_________________________________
Name:
Title:
by_________________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK,
by_________________________________
Name:
Title:
<PAGE>
EXHIBIT 4.5
=====================================================================
DEPOSIT AGREEMENT
among
CHIREX INC.
[ ]
as Depositary
and
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
Dated as of
=====================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES......................................................... 1
RECITALS........................................................ 1
ARTICLE I
Definitions
-----------
Certificate..................................................... 1
Company......................................................... 1
Deposit Agreement............................................... 1
Depositary...................................................... 1
Depositary Shares............................................... 1
Depositary's Agent.............................................. 1
Depositary's Office............................................. 2
Receipt......................................................... 2
Record Holder................................................... 2
Registrar....................................................... 2
Stock........................................................... 2
ARTICLE II
Form of Receipts, Deposit of Stock,
-----------------------------------
Execution and Delivery, Transfer,
---------------------------------
Surrender and Redemption of Receipts
------------------------------------
SECTION 2.01. Form and Transfer of Receipts.................... 2
SECTION 2.02. Deposit of Stock; Execution and Delivery
of Receipts in Respect Thereof ................. 3
SECTION 2.03. Redemption of Stock.............................. 4
SECTION 2.04. Registration of Transfer of Receipts............. 5
SECTION 2.05. Split-ups and Combinations of Receipts;
Surrender of Receipts and Withdrawal of Stock... 5
SECTION 2.06. Limitations on Execution and Delivery,
Transfer, Surrender and Exchange of Receipts.... 6
SECTION 2.07. Lost Receipts, etc............................... 6
SECTION 2.08. Cancelation and Destruction of Surrendered
Receipts ....................................... 6
SECTION 2.09. Stock Purchase Plan.............................. 6
SECTION 2.10. Conversion of Stock into Common Stock............ 6
ARTICLE III
Certain Obligations of Holders
------------------------------
of Receipts and the Company
---------------------------
SECTION 3.01. Filing Proofs, Certificates and Other
Information.................................... 9
SECTION 3.02. Payment of Taxes or Other Governmental Charges... 9
SECTION 3.03. Warranty as to Stock............................. 9
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
ARTICLE IV
The Deposited Securities; Notices
---------------------------------
<S> <C>
SECTION 4.01. Cash Distributions.................................... 9
SECTION 4.02. Distributions Other than Cash, Rights, Preferences
or Privileges...................................... 10
SECTION 4.03. Subscription Rights, Preferences or Privileges........ 10
SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date
for Holders of Receipts............................ 11
SECTION 4.05. Voting Rights......................................... 11
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc.......... 12
SECTION 4.07. Inspection of Reports................................. 12
SECTION 4.08. List of Receipt Holders............................... 13
ARTICLE V
The Depositary, the Depositary's Agents,
----------------------------------------
the Registrar and the Company
-----------------------------
SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books
by the Depositary; Registrar....................... 13
SECTION 5.02. Prevention of or Delay in Performance by the
Depositary, the Depositary's Agent, the
Registrar or the Company........................... 13
SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents, the Registrar and the Company.............. 14
SECTION 5.04. Resignation and Removal of the Depositary;
Appointment of Successor Depositary................ 14
SECTION 5.05. Corporate Notices and Reports......................... 15
SECTION 5.06. Indemnification by the Company........................ 15
SECTION 5.07. Charges and Expenses.................................. 16
ARTICLE VI
Amendment and Termination
-------------------------
SECTION 6.01. Amendment............................................. 16
SECTION 6.02. Termination........................................... 16
ARTICLE VII
Miscellaneous
-------------
SECTION 7.01. Counterparts.......................................... 17
SECTION 7.02. Exclusive Benefit of Parties.......................... 17
SECTION 7.03. Invalidity of Provisions.............................. 17
SECTION 7.04. Notices............................................... 17
SECTION 7.05. Depositary's Agents................................... 17
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
SECTION 7.06. Holders of Receipts Are Parties....................... 18
SECTION 7.07. Governing Law......................................... 18
SECTION 7.08. Inspection of Deposit Agreement....................... 18
SECTION 7.09. Headings.............................................. 18
TESTIMONIUM.......................................................... 18
SIGNATURES........................................................... 18
</TABLE>
EXHIBIT A: Form of Depositary Receipt
(iii)
<PAGE>
DEPOSIT AGREEMENT dated as of , among CHIREX
INC., a Delaware corporation, ,a national
banking association, and the holders from time to time of the
Receipts described herein.
WHEREAS it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of , of CHIREX
INC. with the Depositary for the purposes set forth in this Deposit Agreement
and for the issuance hereunder of Receipts evidencing Depositary Shares in
respect of the Stock so deposited; and
WHEREAS the Receipts are to be substantially in the form of Exhibit A
annexed hereto, with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
Definitions
-----------
The following definitions shall for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement:
"Business Day" shall mean a day which is not a Saturday, Sunday or other
day on which commercial banking institutions in The City of New York, New York
are authorized or obligated by law or executive order to close.
"Certificate" shall mean the certificate of designation filed with the
Secretary of State of Delaware establishing the Stock as a series of preferred
stock of the Company.
"Common Stock" shall mean the Company's Common Stock, $0.01 par value per
share.
"Company" shall mean ChiRex Inc., a Delaware corporation, and its
successors.
"Deposit Agreement" shall mean this Deposit Agreement, as amended or
supplemented from time to time.
"Depositary" shall mean , a
national banking association, and any successor as Depositary hereunder.
"Depositary Shares" shall mean Depositary Shares, each representing a
one-hundredth of a share of Stock and evidenced by a Receipt.
<PAGE>
2
"Depositary's Agent" shall mean an agent appointed by the Depositary
pursuant to Section 7.05.
"Depositary's Office" shall mean the principal office of the Depositary
in , at which at any particular time its depositary receipt
business shall be administered.
"Receipt" shall mean one of the Depositary Receipts issued hereunder,
whether in definitive or temporary form.
"record holder" as applied to a Receipt shall mean the person in whose
name a Receipt is registered on the books of the Depositary maintained for such
purpose.
"Registrar" shall mean any bank or trust company which shall be appointed
to register ownership and transfers of Receipts as herein provided.
"Stock" shall mean shares of the Company's .
ARTICLE II
Form of Receipts, Deposit of Stock, Execution and
-------------------------------------------------
Delivery, Transfer, Surrender and Redemption of Receipts
--------------------------------------------------------
SECTION 2.01. Form and Transfer of Receipts. Definitive Receipts shall
------------------------------
be engraved or printed or lithographed on steel-engraved borders and shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. Pending the preparation of definitive Receipts, the
Depositary, upon the written order of the Company or any holder of Stock, as the
case may be, delivered in compliance with Section 2.02, shall execute and
deliver temporary Receipts which are printed, lithographed, typewritten,
mimeographed or otherwise substantially of the tenor of the definitive Receipts
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the persons executing such
Receipts may determine, as evidenced by their execution of such Receipts. If
temporary Receipts are issued, the Company and the Depositary will cause
definitive Receipts to be prepared without unreasonable delay. After the
preparation of definitive Receipts, the temporary Receipts shall be exchangeable
for definitive Receipts upon surrender of the temporary Receipts at an office
described in the last paragraph of Section 2.02, without charge to the holder.
Upon surrender for cancelation of any one or more temporary Receipts, the
Depositary shall execute and deliver in exchange therefor definitive Receipts
representing the same number of Depositary Shares as represented by the
surrendered temporary Receipt or Receipts. Such exchange shall be made at the
Company's expense and without any charge therefor. Until so exchanged, the
temporary Receipts shall in all respects be entitled to the same benefits under
this Deposit Agreement, and with respect to the Stock, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature of a
duly authorized officer of the Depositary; provided that such signature may be a
--------
facsimile if a Registrar for the Receipts (other than the Depositary) shall have
been appointed and such Receipts are countersigned by manual signature of a duly
authorized officer of the Registrar. No Receipt shall be entitled to any
benefits under this Deposit Agreement or
<PAGE>
3
be valid or obligatory for any purpose unless it shall have been executed
manually by a duly authorized officer of the Depositary or, if a Registrar for
the Receipts (other than the Depositary) shall have been appointed, by manual or
facsimile signature of a duly authorized officer of the Depositary and
countersigned manually by a duly authorized officer of such Registrar. The
Depositary shall record on its books each Receipt so signed and delivered as
hereinafter provided.
Receipts shall be in denominations of any number of whole Depositary
Shares.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange upon which the Stock, the Depositary
Shares or the Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.
Title to Depositary Shares evidenced by a Receipt which is properly
endorsed, or accompanied by a properly executed instrument of transfer, shall be
transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until transfer of a Receipt shall be
---------
registered on the books of the Depositary as provided in Section 2.04, the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts in
-------------------------------------------------------
Respect Thereof. Subject to the terms and conditions of this Deposit Agreement,
- ----------------
the Company or any holder of Stock may from time to time deposit shares of the
Stock under this Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the Stock to be deposited, properly endorsed or
accompanied, if required by the Depositary, by a duly executed instrument of
transfer or endorsement, in form satisfactory to the Depositary, together with
all such certifications as may be required by the Depositary in accordance with
the provisions of this Deposit Agreement, and together with a written order of
the Company or such holder, as the case may be, directing the Depositary to
execute and deliver to, or upon the written order of, the person or persons
stated in such order a Receipt or Receipts for the number of Depositary Shares
representing such deposited Stock.
Deposited Stock shall be held by the Depositary at the Depositary's
Office or at such other place or places as the Depositary shall determine.
Upon receipt by the Depositary of a certificate or certificates for Stock
deposited in accordance with the provisions of this Section, together with the
other documents required as above specified, and upon recordation of the Stock
on the books of the Company in the name of the Depositary or its nominee, the
Depositary, subject to the terms and conditions of this Deposit Agreement, shall
execute and deliver, to or upon the order of the person or persons named in the
written order delivered to the Depositary referred to in the first paragraph of
this Section, a Receipt or Receipts for the number of
<PAGE>
4
Depositary Shares representing the Stock so deposited and registered in such
name or names as may be requested by such person or persons.
The Depositary shall execute and deliver such Receipt or Receipts at the
Depositary's Office or such other offices, if any, as the Depositary may
designate. Delivery at other offices shall be at the risk and expense of the
person requesting such delivery.
SECTION 2.03. Redemption of Stock. Whenever the Company shall elect to
--------------------
redeem shares of Stock in accordance with the provisions of the Certificate, if
the Certificate provides for such redemption, it shall (unless otherwise agreed
in writing with the Depositary) give the Depositary not less than 40 nor more
than 60 days' notice of the date of such proposed redemption of Stock, which
notice shall be accompanied by a certificate from the Company stating that such
redemption of Stock is in accordance with the provisions of the Certificate. On
the date of such redemption, provided that the Company shall then have paid in
full to the Depositary the redemption price of the Stock to be redeemed, plus
any accrued and unpaid dividends thereon, the Depositary shall redeem the number
of Depositary Shares representing such Stock. The Depositary shall mail notice
of such redemption and the proposed simultaneous redemption of the number of
Depositary Shares representing the Stock to be redeemed, first-class postage
prepaid, not less than 30 and not more than 60 days prior to the date fixed for
redemption of such Stock and Depositary Shares (the "Redemption Date"), to the
record holders of the Receipts evidencing the Depositary Shares to be so
redeemed, at the addresses of such holders as they appear on the records of the
Depositary; but neither failure to mail any such notice to one or more such
holders nor any defect in any notice to one or more such holders shall affect
the sufficiency of the proceedings for redemption as to other holders. Each such
notice shall state: (i) the Redemption Date; (ii) the number of Depositary
Shares to be redeemed and, if less than all the Depositary Shares held by any
such holder are to be redeemed, the number of such Depositary Shares held by
such holder to be so redeemed; (iii) the redemption price; (iv) the current
price at which shares of Common Stock would be delivered upon conversion of
shares of Stock (calculated in accordance with Section (d) of the Certificate),
together with a statement that all conversion rights with respect to the Stock
called for redemption will terminate at the close of business on the fifth
Business Day preceding the Redemption Date; (v) the place or places where
Receipts evidencing Depositary Shares are to be surrendered for payment of the
redemption price; and (vi) that dividends in respect of the Stock represented by
the Depositary Shares to be redeemed will cease to accumulate on such Redemption
Date. In case less than all the outstanding Depositary Shares are to be
redeemed, the Depositary Shares to be so redeemed shall be selected by lot or
pro rata as may be determined by the Depositary to be equitable.
Notice having been mailed by the Depositary as aforesaid, from and after
the Redemption Date (unless the Company shall have failed to redeem the shares
of Stock to be redeemed by it as set forth in the Company's notice provided for
in the preceding paragraph) all dividends in respect of the shares of Stock so
called for redemption shall cease to accumulate, the Depositary Shares being
redeemed from such proceeds shall be deemed no longer to be outstanding, all
rights of the holders of Receipts evidencing such Depositary Shares (except the
right to receive the redemption price) shall, to the extent of such Depositary
Shares, cease and terminate and, upon surrender in accordance with such notice
of the Receipts evidencing any such Depositary Shares (properly endorsed or
assigned for transfer, if the Depositary shall so require), such Depositary
Shares shall be
<PAGE>
5
redeemed by the Depositary at a redemption price per Depositary Share equal to
one-hundredth of the redemption price per share paid in respect of the shares of
Stock plus all money and other property, if any, represented by such Depositary
Shares, including all amounts paid by the Company in respect of dividends which
on the Redemption Date have accumulated on the shares of Stock to be so redeemed
and have not theretofore been paid.
If less than all the Depositary Shares evidenced by a Receipt are called
for redemption, the Depositary will deliver to the holder of such Receipt upon
its surrender to the Depositary, together with the redemption payment, a new
Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not
called for redemption.
SECTION 2.04. Registration of Transfer of Receipts. Subject to the
-------------------------------------
terms and conditions of this Deposit Agreement, the Depositary shall register on
its books from time to time transfers of Receipts upon any surrender thereof by
the holder in person or by duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer. Thereupon the
Depositary shall execute a new Receipt or Receipts evidencing the same aggregate
number of Depositary Shares as those evidenced by the Receipt or Receipts
surrendered and deliver such new Receipt or Receipts to or upon the order of the
person entitled thereto.
SECTION 2.05. Split-ups and Combinations of Receipts; Surrender of
----------------------------------------------------
Receipts and Withdrawal of Stock. Upon surrender of a Receipt or Receipts at
- ---------------------------------
the Depositary's Office or at such other offices as it may designate for the
purpose of effecting a split-up or combination of such Receipt or Receipts, and
subject to the terms and conditions of this Deposit Agreement, the Depositary
shall execute and deliver a new Receipt or Receipts in the authorized
denomination or denominations requested, evidencing the aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered.
Any holder of a Receipt or Receipts representing any number of whole
shares of Stock may withdraw the Stock and all money and other property, if any,
represented thereby by surrendering such Receipt or Receipts at the Depositary's
Office or at such other offices as the Depositary may designate for such
withdrawals. Thereafter, without unreasonable delay, the Depositary shall
deliver to such holder, or to the person or persons designated by such holder as
hereinafter provided, the number of whole shares of Stock and all money and
other property, if any, represented by the Receipt or Receipts so surrendered
for withdrawal, but holders of such whole shares of Stock will not thereafter be
entitled to deposit such Stock hereunder or to receive Depositary Shares
therefor. If a Receipt delivered by the holder to the Depositary in connection
with such withdrawal shall evidence a number of Depositary Shares in excess of
the number of Depositary Shares representing the number of whole shares of Stock
to be so withdrawn, the Depositary shall at the same time, in addition to such
number of whole shares of Stock and such money and other property, if any, to be
so withdrawn, deliver to such holder, or (subject to Section 2.03) upon his
order, a new Receipt evidencing such excess number of Depositary Shares.
Delivery of the Stock and money and other property being withdrawn may be made
by the delivery of such certificates, documents of title and other instruments
as the Depositary may deem appropriate.
If the Stock and the money and other property being withdrawn are to be
delivered to a person or persons other than the record holder of the Receipt or
Receipts
<PAGE>
6
being surrendered for withdrawal of Stock, such holder shall execute and deliver
to the Depositary a written order so directing the Depositary and the Depositary
may require that the Receipt or Receipts surrendered by such holder for
withdrawal of such shares of Stock be properly endorsed in blank or accompanied
by a properly executed instrument of transfer in blank.
Delivery of the Stock and the money and other property, if any,
represented by Receipts surrendered for withdrawal shall be made by the
Depositary at the Depositary's Office, except that, at the request, risk and
expense of the holder surrendering such Receipt or Receipts and for the account
of the holder thereof, such delivery may be made at such other place as may be
designated by such holder.
SECTION 2.06. Limitations on Execution and Delivery, Transfer, Surrender
----------------------------------------------------------
and Exchange of Receipts. As a condition precedent to the execution and
- ------------------------
delivery, registration of transfer, split-up, combination, surrender or exchange
of any Receipt, the Depositary, any of the Depositary's Agents or the Company
may require payment to it of a sum sufficient for the payment (or, in the event
that the Depositary or the Company shall have made such payment the
reimbursement to it) of any charges or expenses payable by the holder of a
Receipt pursuant to Section 5.07, may require the production of evidence
satisfactory to it as to the identity and genuineness of any signature and may
also require compliance with such regulations, if any, as the Depositary or the
Company may establish consistent with the provisions of this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts against
Stock may be suspended, the registration of transfer of Receipts may be refused
and the registration of transfer, surrender or exchange of outstanding Receipts
may be suspended (i) during any period when the register of stockholders of the
Company is closed, or (ii) if any such action is deemed necessary or advisable
by the Depositary, any of the Depositary's Agents or the Company at any time or
from time to time because of any requirement of law or of any government or
governmental body or commission or under any provision of this Deposit
Agreement.
SECTION 2.07. Lost Receipts, etc. In case any Receipt shall be
-------------------
mutilated, destroyed, lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt, or in lieu of and in substitution for
such destroyed, lost or stolen Receipt, upon (i) the filing by the holder
thereof with the Depositary of evidence satisfactory to the Depositary of such
destruction or loss or theft of such Receipt, of the authenticity thereof and of
his or her ownership thereof, and (ii) the furnishing of the Depositary with
reasonable indemnification satisfactory to it.
SECTION 2.08. Cancelation and Destruction of Surrendered Receipts. All
------------------------------------------------------
receipts surrendered to the Depositary or any Depositary's Agent shall be
canceled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy all Receipts so canceled.
SECTION 2.09. Stock Purchase Plans. Upon receipt of instructions from
---------------------
the Company, the Depositary shall take such action as shall be reasonable to
permit the record holders of the Depositary Shares to participate in any
dividend reinvestment or other stock purchase plan sponsored by the Company that
permits the participation by such holders on such terms and conditions as the
Company may determine.
<PAGE>
7
SECTION 2.10. Conversion of Stock into Common Stock. Receipts may be
--------------------------------------
surrendered with written instructions to the Depositary to instruct the Company
to cause the conversion of any specified number of whole or fractional shares of
Stock represented by whole Depositary Shares evidenced thereby into whole shares
of Common Stock at the conversion price then in effect for the Stock (and,
therefore, for the Depositary Shares) specified in the Certificate, as such
conversion price may be adjusted by the Company from time to time as provided in
the Certificate. Subject to the terms and conditions of this Deposit Agreement
and the Certificate, a holder of a Receipt or Receipts evidencing Depositary
Shares representing whole or fractional shares of Stock may surrender such
Receipt or Receipts at the Depositary's Office or to such office or to such
Depositary's Agents as the Depositary may designate for such purpose, together
with a notice of conversion duly completed and executed, thereby directing the
Depositary to instruct the Company to cause the conversion of the number of
shares or fractions thereof of underlying Stock specified in such notice of
conversion into shares of Common Stock, and an assignment of such Receipt or
Receipts to the Company or in blank, duly completed and executed. To the extent
that a holder delivers to the Depositary for conversion a Receipt or Receipts
which in the aggregate are convertible into less than one whole share of Common
Stock, the holder shall receive payment in lieu of such fractional shares of
Common Stock otherwise issuable. If more than one Receipt shall be delivered
for conversion at one time by the same holder, the number of whole shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of Receipts so delivered.
Upon receipt by the Depositary of a Receipt or Receipts, together with
notice of conversion, duly completed and executed, directing the Depositary to
instruct the Company to cause the conversion of a specified number of shares or
fractions thereof of Stock and an assignment of such Receipt or Receipts to the
Company or in blank, duly completed and executed, the Depositary shall instruct
the Company (i) to cause the conversion of the Depositary Shares evidenced by
the Receipts so surrendered for conversion as specified in the written notice to
the Depositary and (ii) to cause the delivery to the holders of such Receipts of
a certificate or certificates evidencing the number of whole shares of Common
Stock and the amount of money, if any, to be delivered to the holders of
Receipts surrendered for conversion in lieu of fractional shares of Common Stock
otherwise issuable. The Company shall as promptly as practicable after receipt
thereof cause the delivery of (i) a certificate or certificates evidencing the
number of whole shares of Common Stock into which the Stock represented by the
Depositary Shares evidenced by such Receipt or Receipts has been converted, and
(ii) any money or other property to which the holder is entitled. Upon such
conversion, the Depositary (i) shall deliver to the holder a Receipt evidencing
the number of Depositary Shares, if any, which such holder has elected not to
convert and evidencing the number of Depositary Shares, if any, in excess of the
number of Depositary Shares representing Stock which has been so converted, (ii)
shall cancel the Depositary Shares evidenced by Receipts surrendered for
conversion and (iii) shall deliver to the Company or its transfer agent for the
Stock for cancelation the shares or fractional shares of Stock represented by
the Depositary Shares evidenced by the Receipts so surrendered and so converted.
Upon the delivery of the shares or fractional shares of Stock to be canceled due
to such conversion by the Depositary to the Company, the Company shall deliver
to the Depositary a certificate or certificates evidencing the number of shares
or fractional shares of Stock, if any, which are in excess of the number of
shares of Stock which have been surrendered for conversion.
<PAGE>
8
If the Stock shall be called by the Company for redemption, the
Depositary Shares representing such Stock may be converted into Common Stock as
provided in this Deposit Agreement until and including, but not after, the close
of business on the fifth Business Day preceding the Redemption Date unless the
Company shall default in providing money for the payment of the redemption
price, in which case the Depositary Shares representing such Stock may continue
to be converted into Common Stock until and including, but not after, the close
of business on the date on which the Company makes full payment of the amounts
payable on such redemption. Upon receipt by the Depositary of a Receipt or
Receipts, together with a properly completed and executed notice of conversion,
representing any Stock called for redemption, the shares of Stock held by the
Depositary represented by such Depositary Shares for which conversion is
requested shall be deemed to have been received by the Company for conversion as
of the close of business on the date of such receipt.
The record holder of Depositary Shares on any dividend payment record
date established by the Depositary pursuant to Section 4.04 shall be entitled to
receive the dividend payable with respect to such Depositary Shares (except for
Depositary Shares redeemed on a Redemption Date between such record date and
dividend payment date) on the corresponding dividend payment date
notwithstanding the subsequent conversion of the shares of Stock to which such
Depositary Shares relate. If a share of Stock is converted between the record
date with respect to any dividend payment on the Stock and the corresponding
dividend payment date, any holder of Receipts surrendered with instructions to
the Depositary for conversion of the underlying Stock (except for Depositary
Shares representing shares of Stock called for redemption on a Redemption Date
after the dividend payment record date and on or before the fifth business day
following the dividend payment date) shall pay to the Depositary an amount equal
to the dividend payable on such dividend payment date on the Depositary Shares
represented by the Receipts being surrendered for conversion. Any holder of
Receipts on a dividend payment record date who (or whose transferee) surrenders
the Receipts with instructions to the Depositary for conversion of the
underlying Stock on the corresponding dividend payment date will receive the
dividend payable with respect to the Depositary Shares underlying such Receipts
and will not be required to include payment of the amount of such dividend upon
surrender of the Receipts for conversion.
Upon the conversion of any shares of Stock for which a request for
conversion has been made by the holder of Depositary Shares representing such
shares, all dividends in respect of such Depositary Shares shall cease to
accrue, such Depositary Shares shall be deemed no longer outstanding, all rights
of the holder of the Receipt with respect to such Depositary Shares (except the
right to receive the Common Stock, any cash payable with respect to any
fractional shares of Common Stock as provided herein and any cash payable on
account of accrued dividends as provided herein and any Receipts evidencing
Depositary Shares not so converted) shall terminate, and the Receipt evidencing
such Depositary Shares shall be canceled in accordance with Section 2.08 hereof.
No fractional shares of Common Stock shall be issuable upon conversion of
Stock underlying the Depositary Shares. If any holder of Receipts surrendered
with instructions to the Depositary for conversion of the underlying Stock would
be entitled to a fractional share of Common Stock upon such conversion, the
Company shall cause to be delivered to such holder an amount in cash for such
fractional share as provided in the Certificate.
<PAGE>
9
ARTICLE III
Certain Obligations of Holders
------------------------------
of Receipts and the Company
---------------------------
SECTION 3.01. Filing Proofs, Certificates and Other Information. Any
--------------------------------------------------
holder of a Receipt may be required from time to time to file such proof of
residence, or other matters or other information, to execute such certificates
and to make such representations and warranties as the Depositary or the Company
may reasonably deem necessary or proper. The Depositary or the Company may
withhold the delivery, or delay the registration of transfer, conversion,
redemption or exchange, of any Receipt or the withdrawal of the Stock
represented by the Depositary Shares evidenced by any Receipt or the
distribution of any dividend or other distribution or the sale of any rights or
of the proceeds thereof or the conversion of any Stock until such proof or other
information is filed or such certificates are executed or such representations
and warranties are made.
SECTION 3.02. Payment of Taxes or Other Governmental Charges. Holders
------------------------------------------------
of Receipts shall be obligated to make payments to the Depositary of certain
charges and expenses, as provided in Section 5.07. Registration of transfer of
any Receipt or any withdrawal of Stock and all money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt may be refused
until any such payment due is made, and any dividends, interest payments or
other distributions may be withheld or any part of or all the Stock or other
property represented by the Depositary Shares evidenced by such Receipt and not
theretofore sold may be sold for the account of the holder thereof (after
attempting by reasonable means to notify such holder prior to such sale), and
such dividends, interest payments or other distributions or the proceeds of any
such sale may be applied to any payment of such charges or expenses, the holder
of such Receipt remaining liable for any deficiency.
SECTION 3.03. Warranty as to Stock. The Company hereby represents and
---------------------
warrants that the Stock, when issued, will be validly issued, fully paid and
nonassessable. Such representation and warranty shall survive the deposit of the
Stock and the issuance of Receipts.
ARTICLE IV
The Deposited Securities; Notices
---------------------------------
SECTION 4.01. Cash Distributions. Whenever the Depositary shall receive
-------------------
any cash dividend or other cash distribution on Stock, the Depositary shall,
subject to Sections 3.01 and 3.02, distribute to record holders of Receipts on
the record date fixed pursuant to Section 4.04 such amounts of such dividend or
distribution as are, as nearly as practicable, in proportion to the respective
numbers of Depositary Shares evidenced by the Receipt held by such holders;
provided, however, that in case the Company or the Depositary shall be required
- -------- -------
to withhold and shall withhold from any cash dividend or other cash distribution
in respect of the Stock an amount on account from taxes, the amount made
available for distribution or distributed in respect of Depositary Shares shall
be reduced accordingly. The Depositary shall distribute or make available for
distribution, as the case may be, only such amount, however, as can be
distributed, without attributing to any holder of Depositary Shares a fraction
of one cent, and any
<PAGE>
10
balance not so distributable shall be held by the Depositary (without liability
for interest thereon) and shall be added to and be treated as part of the next
sum received by the Depositary for distribution to record holders of Receipts
then outstanding.
SECTION 4.02. Distributions Other than Cash, Rights, Preferences or
-----------------------------------------------------
Privileges. Whenever the Depositary shall receive any distribution other than
- -----------
cash, rights, preferences or privileges upon Stock, the Depositary shall,
subject to Sections 3.01 and 3.02, distribute to record holders of Receipts on
the record date fixed pursuant to Section 4.04 such amounts of the securities or
property received by it as are, as nearly as practicable, in proportion to the
respective numbers of Depositary Shares evidenced by the Receipts held by such
holders, in any manner that the Depositary may deem equitable and practicable
for accomplishing such distribution. If in the opinion of the Depositary such
distribution cannot be made proportionately among such record holders, or if for
any other reason (including any requirement that the Company or the Depositary
withhold an amount on account of taxes) the Depositary deems, after consultation
with the Company, such distribution not to be feasible, the Depositary may, with
the approval of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the sale
(at public or private sale) of the securities or property thus received, or any
part thereof, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be
distributed or made available for distribution, as the case may be, by the
Depositary to record holders of Receipts as provided by Section 4.01 in the case
of a distribution received in cash. The Company shall not make any distribution
of such securities unless the Company shall have provided an opinion of counsel
stating that such securities have been registered under the Securities Act of
1933 or do not need to be registered.
SECTION 4.03. Subscription Rights, Preferences or Privileges. If the
-----------------------------------------------
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is recorded on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any nature, such rights, preferences or privileges
shall in each such instance be made available by the Depositary to the record
holders of Receipts in such manner as the Depositary may determine, either by
the issue to such record holders of warrants representing such rights,
preferences or privileges or by such other method as may be approved by the
Depositary in its discretion with the approval of the Company; provided,
--------
however, that (i) if at the time of issue or offer of any such rights,
- -------
preferences or privileges the Depositary determines that it is not lawful or
(after consultation with the Company) not feasible to make such rights,
preferences or privileges available to holders of Receipts by the issue of
warrants or otherwise, or (ii) if and to the extent so instructed by holders of
Receipts who do not desire to exercise such rights, preferences or privileges,
then the Depositary, in its discretion (with the approval of the Company, in any
case where the Depositary has determined that it is not feasible to make such
rights, preferences or privileges available), may, if applicable laws or the
terms of such rights, preferences or privileges permit such transfer, sell such
rights, preferences or privileges at public or private sale, at such place or
places and upon such terms as it may deem proper. The net proceeds of any such
sale shall, subject to Sections 3.01 and 3.02, be distributed by the Depositary
to the record holders of Receipts entitled thereto as provided by Section 4.01
in the case of a distribution received in cash. The Company shall not make any
distribution of any such rights, preferences or privileges unless the Company
shall have provided an opinion of
<PAGE>
11
counsel stating that such rights, preferences or privileges have been registered
under the Securities Act of 1933 or do not need to be registered.
If registration under the Securities Act of 1933 of the securities to
which any rights, preferences or privileges relate is required in order for
holders of Receipts to be offered or sold the securities to which such rights,
preferences or privileges relate, the Company agrees with the Depositary that it
will file promptly a registration statement pursuant to such Act with respect to
such rights, preferences or privileges and securities and use its best efforts
and take all steps available to it to cause such registration statement to
become effective sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges. In no event shall the Depositary make available to
the holders of Receipts any right, preference or privilege to subscribe for or
to purchase any securities unless and until such a registration statement shall
have become effective, or unless the offering and sale of such securities to
such holders are exempt from registration, under the provisions of such Act.
If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees with the Depositary that the Company will use
its best efforts to take such action or obtain such authorization, consent or
permit sufficiently in advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights, preferences or
privileges.
SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date for
----------------------------------------------------
Holders of Receipts. Whenever any cash dividend or other cash distribution
- --------------------
shall become payable or any distribution other than cash shall be made, or if
rights, preferences or privileges shall at any time be offered, with respect to
Stock, or whenever the Depositary shall receive notice of any meeting at which
holders of Stock are entitled to vote or of which holders of Stock are entitled
to notice, or whenever the Depositary and the Company shall decide it is
appropriate, the Depositary shall in each such instance fix a record date (which
shall be the same date as the record date fixed by the Company with respect to
the Stock) for the determination of the holders of Receipts who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof, or to give instructions for
the exercise of voting rights at any such meeting, or who shall be entitled to
notice of such meeting or for any other appropriate reasons.
SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting at
--------------
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the record holders of Receipts a notice which
shall contain (i) such information as is contained in such notice of meeting,
and (ii) a statement that the holders of Receipts at the close of business on a
specified record date fixed pursuant to Section 4.04 may, subject to any
applicable restrictions, instruct the Depositary as to the exercise of the
voting rights pertaining to the amount of Stock represented by their respective
Depositary Shares (including an express indication that instructions may be
given to the Depositary to give a discretionary proxy to a person designated by
the Company) and (iii) a brief statement as to the manner in which such
instructions may be given. Upon the written request of the holders of Receipts
on the relevant record date, the Depositary shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of
<PAGE>
12
whole shares of Stock represented by the Depositary Shares evidenced by all
Receipts as to which any particular voting instructions are received. The
Company hereby agrees to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to vote such Stock or cause such
Stock to be voted. In the absence of specific instructions from the holder of a
Receipt, the Depositary will abstain from voting (but, at its discretion, not
from appearing at any meeting with respect to such Stock unless directed to the
contrary by the holders of all the Receipts) to the extent of the Stock
represented by the Depositary Shares evidenced by such Receipt.
SECTION 4.06. Changes Affecting Deposited Securities and
------------------------------------------
Reclassifications, Recapitalizations, etc. Upon any change in par or stated
- ------------------------------------------
value, split-up, combination or any other reclassification of the Stock, or upon
any recapitalization, reorganization, merger, amalgamation or consolidation
affecting the Company or to which it is a party, or sale of all or substantially
all of the Company's assets, the Depositary may in its discretion with the
approval of, and shall upon the instructions of, the Company, and (in either
case) in such manner as the Depositary may deem equitable, (i) make such
adjustments as are certified by the Company in (x) the fraction of an interest
represented by one Depositary Share in one share of Stock, (y) the ratio of the
redemption price per Depositary Share to the redemption price of a share of
Stock, and (z) the ratio of the conversion price per Depositary Share to the
conversion price of a share of Stock, in each case as may be necessary fully to
reflect the effects of such changes in par or stated value, split-up,
combination or other reclassification of Stock, or of such recapitalization,
reorganization, merger, amalgamation, consolidation, or sale of all or
substantially all of the Company's assets, and (ii) treat any securities which
shall be received by the Depositary in exchange for or upon conversion of or in
respect of the Stock as new deposited securities so received in exchange for or
upon conversion or in respect of such Stock. In any such case the Depositary
may in its discretion, with the approval of the Company, execute and deliver
additional Receipts, or may call for the surrender of all outstanding Receipts
to be exchanged for new Receipts specifically describing such new deposited
securities. Anything to the contrary herein notwithstanding, holders of
Receipts shall have the right from and after the effective date of any such
change in par or stated value, split-up, combination or other reclassification
of the Stock or any such recapitalization, reorganization, merger, amalgamation,
consolidation, or sale of all or substantially all of the Company's assets, to
surrender such Receipts to the Depositary with instructions to convert, exchange
or surrender the Stock represented thereby only into or for, as the case may be,
the kind and amount of shares of stock and other securities and property and
cash into which the Stock represented by such Receipts might have been converted
or for which such Stock might have been exchanged or surrendered immediately
prior to the effective date of such transaction.
SECTION 4.07. Inspection of Reports. The Depositary shall make
----------------------
available for inspection by holders of Receipts at the Depositary's Office, and
at such other places as it may from time to time deem advisable, any reports and
communications received from the Company which are received by the Depositary as
the holder of Stock.
SECTION 4.08. List of Receipt Holders. Promptly upon request from time
------------------------
to time by the Company, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares of all
persons in whose names Receipts are registered on the books of the Depositary.
<PAGE>
13
ARTICLE V
The Depositary, the Depositary's Agents,
----------------------------------------
the Registrar and the Company
-----------------------------
SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books by the
----------------------------------------------------------
Depositary; Registrar. Upon execution of this Deposit Agreement, the Depositary
- ----------------------
shall maintain at the Depositary's Office, facilities for the execution and
delivery, registration and registration of transfer, surrender and exchange of
Receipts, and at the offices of the Depositary's Agents, if any, facilities for
the delivery, registration of transfer, surrender and exchange of Receipts, all
in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and registration of transfer of Receipts, which books at all
reasonable times shall be open for inspection by the record holders of Receipts;
provided, that any such holder requesting to exercise such right shall certify
- ---------
to the Depositary that such inspection shall be for a proper purpose reasonably
related to such person's interest as an owner of Depositary Shares evidenced by
the Receipts.
The Depositary may close such books, at any time or from time to time,
when deemed expedient by it in connection with the performance of its duties
hereunder.
The Depositary may, with the approval of the Company, appoint a Registrar
for registration of the Receipts or the Depositary Shares evidenced thereby. If
the Receipts or the Depositary Shares evidenced thereby or the Stock represented
by such Depositary Shares shall be listed on the New York Stock Exchange, the
Depositary will appoint a Registrar (acceptable to the Company) for registration
of such Receipts or Depositary Shares in accordance with any requirements of
such Exchange. Such Registrar (which may be the Depositary if so permitted by
the requirements of such Exchange) may be removed and a substituted registrar
appointed by the Depositary upon the request or with the approval of the
Company. If the Receipts, such Depositary Shares or such Stock are listed on
one or more other stock exchanges, the Depositary will, at the request of the
Company, arrange such facilities for the delivery, registration, registration of
transfer, surrender and exchange of such Receipts, such Depositary Shares or
such Stock as may be required by law or applicable stock exchange regulation.
SECTION 5.02. Prevention of or Delay in Performance by the Depositary,
--------------------------------------------------------
the Depositary's Agents, the Registrar or the Company. Neither the Depositary
- ------------------------------------------------------
nor any Depositary's Agent nor any Registrar nor the Company shall incur any
liability to any holder of any Receipt if by reason of any provision of any
present or future law, or regulation thereunder, of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Depositary's Agent or the Registrar, by reason of any provision, present or
future, of the Company's Restated Certificate of Incorporation (including the
Certificate) or by reason of any act of God or war or other circumstances beyond
the control of the relevant party, the Depositary, the Depositary's Agent, the
Registrar or the Company shall be prevented or forbidden from, or subjected to
any penalty on account of, doing or performing any act or thing which the terms
of this Deposit Agreement provide shall be done or performed; nor shall the
Depositary, any Depositary's Agent, any Registrar or the Company incur any
liability to any holder of a Receipt (i) by reason of any nonperformance or
delay, caused as aforesaid, in the
<PAGE>
14
performance of any act or thing which the terms of this Deposit Agreement
provide shall or may be done or performed, or (ii) by reason of any exercise of,
or failure to exercise, any discretion provided for in this Deposit Agreement
except, in case of any such exercise or failure to exercise discretion not
caused as aforesaid, if caused by the negligence or wilful misconduct of the
party charged with such exercise or failure to exercise.
SECTION 5.03. Obligation of the Depositary, the Depositary's Agents, the
----------------------------------------------------------
Registrar and the Company. Neither the Depositary nor any Depositary's Agent
- --------------------------
nor any Registrar nor the Company assumes any obligation or shall be subject to
any liability under this Deposit Agreement to holders of Receipts other than for
its negligence or wilful misconduct.
Neither the Depositary nor any Depositary's Agent nor any Registrar nor
the Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Stock, the Depositary Shares
or the Receipts which in its opinion may involve it in expense or liability
unless indemnity satisfactory to it against all expense and liability be
furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor any Registrar nor
the Company shall be liable for any action or any failure to act by it in
reliance upon the written advice of legal counsel or accountants, or information
from any person presenting Stock for deposit, any holder of a Receipt or any
other person believed by it in good faith to be competent to give such
information. The Depositary, any Depositary's Agent, any Registrar and the
Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties.
Neither the Depositary or the Depositary's Agent shall be responsible for
any failure to carry out any instruction to vote any of the shares of Stock or
for the manner or effect of any such vote made, as long as any such action or
nonaction is in good faith. The Depositary undertakes, and any Registrar shall
be required to undertake, to perform such duties and only such duties as are
specifically set forth in this Deposit Agreement and no implied covenants or
obligations shall be read into this Deposit Agreement against the Depositary or
any Registrar. The Depositary will indemnify the Company against any liability
which may arise out of acts performed or omitted by the Depositary or its agents
due to its or their negligence or bad faith. The Depositary, the Depositary's
Agents and any Registrar may own and deal in any class of securities of the
Company and its affiliates and Receipts. The Depositary may also act as
transfer agent or registrar of any of the securities of the Company and its
affiliates.
SECTION 5.04. Resignation and Removal of the Depositary; Appointment of
---------------------------------------------------------
Successor Depositary. The Depositary may at any time resign as Depositary
- ---------------------
hereunder by notice of its election so to do delivered to the Company, such
resignation to take effect upon the appointment of a successor Depositary and
its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of
such removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor Depositary and its acceptance of such appointment as
hereinafter provided.
<PAGE>
15
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor Depositary,
which shall be a bank or trust company having its principal office in the United
States of America and having a combined capital and surplus of at least $50
million. If no successor Depositary shall have been so appointed and have
accepted appointment within 60 days after delivery of such notice, the resigning
or removed Depositary may petition any court of competent jurisdiction for the
appointment of a successor Depositary. Every successor Depositary shall execute
and deliver to its predecessor and to the Company an instrument in writing
accepting its appointment hereunder, and thereupon such successor Depositary,
without any further act or deed, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor and for all purposes shall be
the Depositary under this Deposit Agreement, and such predecessor, upon payment
of all sums due it and on the written request of the Company, shall execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all right,
title and interest in the Stock and any moneys or property held hereunder to
such successor, and shall deliver to such successor a list of the record holders
of all outstanding Receipts. Any successor Depositary shall promptly mail
notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act, and notice thereof shall
not be required hereunder. Such successor Depositary may authenticate the
Receipts in the name of the predecessor Depositary or in the name of the
successor Depositary.
SECTION 5.05. Corporate Notices and Reports. The Company agrees that it
------------------------------
will transmit to the record holders of Receipts, in each case at the addresses
furnished to it pursuant to Section 4.08, all notices and reports (including
without limitation financial statements) required by law, by the rules of any
national securities exchange upon which the Stock, the Depositary Shares or the
Receipts are listed or by the Company's Restated Certificate of Incorporation
(including the Certificate) to be furnished by the Company to holders of Stock.
Such transmission will be at the Company's expense.
SECTION 5.06. Indemnification by the Company. The Company shall
-------------------------------
indemnify the Depositary, any Depositary's Agent and any Registrar against, and
hold each of them harmless from, any loss, liability or expense (including the
costs and expenses of defending itself) which may arise out of (i) acts
performed or omitted in connection with this Deposit Agreement and the Receipts
(a) by the Depositary, any Registrar or any of their respective agents
(including any Depositary's Agent), except for any liability arising out of
negligence or bad faith on the respective parts of any such person or persons,
or (b) by the Company or any of its agents, or (ii) the offer, sale or
registration of the Receipts or the Stock pursuant to the provisions hereof.
The obligations of the Company set forth in this Section 5.06 shall survive any
succession of any Depositary, Registrar or Depositary's Agent.
SECTION 5.07. Charges and Expenses. The Company shall pay all transfer
---------------------
and other taxes and governmental charges arising solely from the existence of
the depositary arrangements. The Company shall pay all charges of the
Depositary in connection with the initial deposit of the Stock and the initial
issuance of the Depositary Shares, redemption of the Stock at the option of the
Company, conversion of the Stock
<PAGE>
16
into Common Stock and all withdrawals of shares of the Stock by owners of
Depositary Shares. All other transfer and other taxes and governmental charges
shall be at the expense of holders of Depositary Shares. If, at the request of a
holder of Receipts, the Depositary incurs charges or expenses for which it is
not otherwise liable hereunder, such holder will be liable for such charges and
expenses. All other charges and expenses of the Depositary and any Depositary's
Agent hereunder and of any Registrar (including, in each case, fees and expenses
of counsel) incident to the performance of their respective obligations
hereunder will be paid upon consultation and agreement between the Depositary
and the Company as to the amount and nature of such charges and expenses. The
Depositary shall present its statement for charges and expenses to the Company
once every three months or at such other intervals as the Company and the
Depositary may agree.
ARTICLE VI
Amendment and Termination
-------------------------
SECTION 6.01. Amendment. The form of the Receipts and any provisions of
----------
this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they may
deem necessary or desirable; provided, however, that no such amendment (other
-------- -------
than any change in the fees of any Depositary, Registrar or Transfer Agent)
which shall materially and adversely alter the rights of the holders of Receipts
shall be effective unless such amendment shall have been approved by the holders
of at least a majority of the Depositary Shares then outstanding. Every holder
of an outstanding Receipt at the time any such amendment becomes effective shall
be deemed, by continuing to hold such Receipt, to consent and agree to such
amendment and to be bound by this Deposit Agreement as amended thereby.
SECTION 6.02. Termination. This Agreement may be terminated by the
------------
Company or the Depositary only after (i) all outstanding Depositary Shares shall
have been redeemed pursuant to Section 2.03, or (ii) there shall have been made
a final distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution shall have been
distributed to the holders of Depositary Shares pursuant to Section 4.01 or
4.02, as applicable.
Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Sections 5.06 and 5.07.
ARTICLE VII
Miscellaneous
-------------
SECTION 7.01. Counterparts. This Deposit Agreement may be executed in
-------------
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument.
<PAGE>
17
SECTION 7.02. Exclusive Benefit of Parties. This Deposit Agreement is
-----------------------------
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or more of the
-------------------------
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. Notices. Any and all notices to be given to the Company
--------
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail or by telegram or telex
confirmed by letter, addressed to the Company at 300 Atlantic Ave., Suite 402,
Stamford, Connecticut 06901, to the attention of the General Counsel, or at any
other address of which the Company shall have notified the Depositary in
writing.
Any and all notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail or by telegram or telex confirmed by
letter, addressed to the Depositary at the Depositary's Office, at ,
or at any other address of which the Depositary shall have notified the
Company in writing.
Any and all notices to be given to any record holder of a Receipt
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail or by telegram or telex
confirmed by letter, addressed to such record holder at the address of such
record holder as it appears on the books of the Depositary, or if such holder
shall have filed with the Depositary a written request that notices intended for
such holder be mailed to some other address, at the address designated in such
request.
Delivery of a notice sent by mail or by telegram or telex shall be deemed
to be effected at the time when a duly addressed letter containing the same (or
a confirmation thereof in the case of a telegram or telex message) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company
may, however, act upon any telegram or telex message received by it from the
other or from any holder of a Receipt, notwithstanding that such telegram or
telex message shall not subsequently be confirmed by letter or as aforesaid.
SECTION 7.05. Depositary's Agents. The Depositary may from time to time
--------------------
appoint Depositary's Agents to act in any respect for the Depositary for the
purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such Depositary's
Agents. The Depositary will notify the Company of any such action.
SECTION 7.06. Holders of Receipts Are Parties. The holders of Receipts
--------------------------------
from time to time shall be parties to this Deposit Agreement and shall be bound
by all of the terms and conditions hereof and of the Receipts by acceptance of
delivery thereof.
<PAGE>
18
SECTION 7.07. Governing Law. This Deposit Agreement and the Receipts
--------------
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed by, and construed in accordance with, the laws of the State of
Illinois.
SECTION 7.08. Inspection of Deposit Agreement. Copies of this Deposit
--------------------------------
Agreement shall be filed with the Depositary and the Depositary's Agents and
shall be open to inspection during business hours at the Depositary's Office and
the respective offices of the Depositary's Agents, if any, by any holder of a
Receipt.
SECTION 7.09. Headings. The headings of articles and sections in this
---------
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as part of
this Deposit Agreement or the Receipts or have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, the Company and the Depositary have duly executed
this Agreement as of the day and year first above set forth, and all holders of
Receipts shall become parties hereto by and upon acceptance by them of delivery
of Receipts issued in accordance with the terms hereof.
CHIREX INC.,
by
___________________________________
Title:
Attested by
_________________________
[SEAL]
by
___________________________________
Title: Vice President
Attested by
_________________________
[SEAL]
<PAGE>
EXHIBIT 4.6
EXECUTION COPY
================================================================================
WARRANT AGREEMENT
Dated as of
September , 1998
between
CHIREX INC.
and
as the Warrant Agent
_____________________________________________
Warrants for
Debt Securities, Preferred Stock and Common Stock of
ChiRex Inc.
Expiring ___________, __, ____
_____________________________________________
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
-----------
SECTION 1.01. Definitions.......................... 2
SECTION 1.02. Other Definitions.................... 9
SECTION 1.03. Rules of Construction................ 10
ARTICLE II
Warrant Certificates
--------------------
SECTION 2.01. Form and Dating...................... 10
SECTION 2.02. Execution and Countersignature....... 11
SECTION 2.03. Certificate Register................. 12
SECTION 2.04. Transfer and Exchange................ 12
SECTION 2.05. Replacement Certificates............. 14
SECTION 2.06. Outstanding Warrants................. 15
SECTION 2.07. Temporary Certificates............... 15
SECTION 2.08. Cancelation.......................... 15
SECTION 2.09. CUSIP Numbers........................ 16
ARTICLE III
Exercise Terms
---------------
SECTION 3.01. Exercise Price....................... 16
SECTION 3.02. Exercise Periods..................... 16
SECTION 3.03. Expiration........................... 17
SECTION 3.04. Manner of Exercise................... 17
SECTION 3.05. Issuance of Warrant Shares........... 18
SECTION 3.06. Fractional Warrant Shares............ 18
SECTION 3.07. Reservation of Warrant Shares........ 18
SECTION 3.08. Compliance with Law.................. 19
ARTICLE IV
Covenants
---------
SECTION 4.01. Corporate Existence.................. 20
SECTION 4.02. Insurance............................ 20
SECTION 4.03. Taxes, Claims for Labor and
Materials, Compliance with Laws;
Liens ............................... 20
<PAGE>
2
SECTION 4.04. Maintenance........................... 21
SECTION 4.05. Nature of Business.................... 21
SECTION 4.06. Transactions with Affiliates.......... 21
SECTION 4.07. Reports and Rights of Inspection...... 21
SECTION 4.08. Repurchase of Warrants................ 24
SECTION 4.09. Capitalization........................ 24
SECTION 4.10. Letter Agreements..................... 24
ARTICLE V
Antidilution Provisions
-----------------------
SECTION 5.01. Changes in Preferred Stock or
Common Stock........................ 24
SECTION 5.02. Changes in Debt Securities............ 25
SECTION 5.03. Cash Dividends and Other
Distributions....................... 25
SECTION 5.04. Debt Security Issue................... 26
SECTION 5.05. Preferred Stock Issue................. 27
SECTION 5.06. Common Stock Issue.................... 27
SECTION 5.07. Issuance of Rights or Options......... 28
SECTION 5.08. Combination; Liquidation.............. 29
SECTION 5.09. Tender Offers; Exchange Offers........ 30
SECTION 5.10. Other Events.......................... 30
SECTION 5.11. Superseding Adjustment................ 31
SECTION 5.12. Minimum Adjustment.................... 31
SECTION 5.13. Notice of Adjustment.................. 32
SECTION 5.14. Notice of Certain Transactions........ 32
SECTION 5.15. Adjustment to Warrant Certificate..... 33
ARTICLE VI
Registration and Repurchase Rights
----------------------------------
SECTION 6.01. Registration Rights................... 34
SECTION 6.02. Preparation and Filing................ 36
SECTION 6.03. Indemnification....................... 39
SECTION 6.04. Repurchase of Warrants................ 43
SECTION 6.05. Change of Control Equity Offer........ 45
SECTION 6.06. Drag Along Rights..................... 47
ARTICLE VII
Warrant Agent
-------------
SECTION 7.01. Appointment of Warrant Agent.......... 47
SECTION 7.02. Rights and Duties of Warrant
Agent............................... 47
<PAGE>
3
SECTION 7.03. Individual Rights of Warrant
Agent............................... 49
SECTION 7.04. Warrant Agent's Disclaimer............ 49
SECTION 7.05. Compensation and Indemnity............ 49
SECTION 7.06. Successor Warrant Agent............... 50
SECTION 7.07. Compliance with Applicable Laws....... 51
ARTICLE VIII
Miscellaneous
-------------
SECTION 8.01. Company Resales....................... 52
SECTION 8.02. SEC Reports and Other Information..... 52
SECTION 8.03. Rule 144A............................. 52
SECTION 8.04. Persons Benefitting................... 52
SECTION 8.05. Rights of Holders..................... 52
SECTION 8.06. Amendment............................. 53
SECTION 8.07. Notices............................... 53
SECTION 8.08. Governing Law......................... 54
SECTION 8.09. Successors............................ 54
SECTION 8.10. Multiple Originals.................... 55
SECTION 8.11. Table of Contents..................... 55
SECTION 8.12. Severability.......................... 55
SECTION 8.13. Merger, Consolidation, Sale,
Transfer or Conveyance................ 55
SECTION 8.14. Notices and Demands to the Company
and Warrant Agent..................... 56
SECTION 8.15. Delivery of Prospectus................ 56
SECTION 8.16. Obtaining of Governmental
Approvals............................. 56
SECTION 8.17. Payment of Taxes...................... 57
SECTION 8.18. Benefits of Warrant Agreement......... 57
SECTION 8.19. Board of Director Action; No
Liability of Directors, Officers,
Employees or Shareholders............. 57
SECTION 8.20. Warrant Holders Not Shareholders ..... 57
EXHIBIT A Form of Face of Warrant Certificate
EXHIBIT B Form of Election To Purchase
Warrant Shares
<PAGE>
WARRANT AGREEMENT dated as of September __, 1998, between
CHIREX INC., a Delaware corporation (the "Company"), and
____________, as warrant agent (the "Warrant Agent").
The Company has entered into an Indenture, dated as of _______ __, 1998
(the "Indenture"), between the Company and _______, a _________, as trustee (the
"Trustee"), providing for the issuance from time to time of its unsecured
[senior/subordinated?] debentures, notes or other evidences of indebtedness, to
be issued in one or more series as provided in the Indenture.
The Company desires to issue the warrants (the "Warrants") described
herein. The Warrants will initially entitle the holders thereof (the "Holders")
to purchase in the aggregate a principal amount of $_______ of debt securities
(the "Debt Securities"), _______ shares of preferred stock, $.01 par value (the
"Preferred Stock"), or _______ shares of common stock, $.01 par value (the
"Common Stock"), of the Company in connection with an offering (the "Offering")
by the Company of _______ units (the "Units"). Each Unit consists of [one
warrant] (each, a "Warrant"). Each Warrant will entitle the Holder to purchase a
principal amount of $______ of Debt Securities at an exercise price of $____
(the "Debt Securities Exercise Price"), ______ shares of Preferred Stock at an
exercise price of $_____ per share (the "Preferred Stock Exercise Price"), or
_____ shares of Common Stock at an exercise price of $____ per share (the
"Common Stock Exercise Price"), subject to adjustment as provided herein.
The Warrants will not trade separately from the Exchangeable Debt
Securities, Preferred Stock and Common Stock until the earliest date (the
"Separation Date") to occur of: (i) the commencement by the Company of a
registered exchange offer for the Exchangeable Debt Securities, Preferred Stock
and Common Stock or the effective date of a registration statement relating to a
shelf registration statement with respect to the Exchangeable Debt Securities,
Preferred Stock and Common Stock; and (ii) such earlier date after _______ __,
___, as may be determined by the Initial Purchasers (as defined herein).
The Company further desires the Warrant Agent to act on behalf of the
Company in connection with the issuance of the Warrants as provided herein and
the Warrant Agent is willing to so act.
<PAGE>
2
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of Warrants:
ARTICLE I
Definitions
-----------
SECTION 1.01. Definitions.
------------
"Affiliate" of any specified Person means (i) any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person or (ii) any Person who is a director or
officer (a) of such Person, (b) of any Subsidiary of such Person or (c) of any
Person described in clause (i) above. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; [provided,
however, that beneficial ownership of 10% or more of the voting securities of a
Person shall be decreed to be control.] The terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Board" means the Board of Directors of the Company or any committee
thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means any day other than a Saturday, Sunday or day on which
commercial banking institutions are not required by law to be open in the States
of Delaware or New York.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated, whether voting or nonvoting) equity of such
Person, including any common stock and preferred stock, whether outstanding on
the Issue Date or issued after the Issue Date but excluding any debt securities
convertible into such equity.
"Cashless Exercise Ratio" means a fraction, the numerator of which is the
excess of the Current Market Value of the Debt Securities or per share of
Preferred Stock or Common Stock on the date of exercise over the Exercise Price
of the Debt Securities or per share of Preferred Stock or Common Stock as of the
date of exercise and the denominator of which is the Current Market Value of the
Debt Securities
<PAGE>
3
or per share of the Preferred Stock or Common Stock on the date of exercise.
"Certificated Warrants" means certificated Warrants in fully registered
definitive form.
"Change of Control" means the occurrence of any of the following events:
[(i) Prior to the first public offering of common stock of the
Company, the Permitted Holders cease to be the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of a majority in the aggregate of the total voting power of the
Voting Stock of the Company, whether as a result of issuance of securities
of the Company, any merger, consolidation, liquidation or dissolution of
the Company, any direct or indirect transfer of securities (for purposes of
this clause (i) and clause (ii) below, the Permitted Holders shall be
deemed to beneficially own any Voting Stock of a corporation (the
"specified corporation") held by any other corporation (the "parent
corporation") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the voting
power of the Voting Stock of the parent corporation);]
(ii) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes
the beneficial owner (as defined in clause (i) above, except that for
purposes of this clause (ii) such person shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than ___% of the total
voting power of the Voting Stock of the Company; provided, however, that
-------- -------
the Permitted Holders beneficially own (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the total
voting power of the Voting Stock of the Company than such other person and
do not have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the Board (for the purposes
of this clause (ii), such other person shall be deemed to beneficially own
any Voting Stock of a specified corporation held by a parent corporation,
if such other person is the beneficial owner (as defined in this clause
(ii)), directly or indirectly, of more than ___% of the voting power of the
Voting Stock of such parent
<PAGE>
4
corporation and the Permitted Holders beneficially own (as defined in
clause (i) above), directly or indirectly, in the aggregate a lesser
percentage of the voting power of the Voting Stock of such parent
corporation and do not have the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the board of
directors of such parent corporation);
(iii) during any period of _______________,individuals who at the
beginning of such period constituted the Board (together with any new
directors whose election or appointment by such Board or whose nomination
for election by the shareholders of the Company was approved by a vote of
_____% of the directors of the Company then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority of the Board then in office; or
(iv) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company to another
Person (other than a Person that is controlled by the Permitted Holders),
and, in the case of any such merger or consolidation, the securities of the
Company that are outstanding immediately prior to such transaction and
which represent 100% of the aggregate voting power of the Voting Stock of
the Company are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of the
surviving corporation that represent immediately after such transaction, at
least a majority of the aggregate voting power of the Voting Stock of the
surviving corporation.
"Closing Date" means ________ __, ____.
"Combination" means an event in which the Company consolidates with,
merges with or into, or sells all or substantially all the property and assets
of the Company or the Company and its subsidiaries taken as a whole to another
Person.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as (i) the par or stated value of
all outstanding membership interests of the Company
<PAGE>
5
plus (ii) paid-in capital or capital surplus relating to such membership
interests plus (iii) any retained earnings or earned surplus less (A) any
accumulated deficit and (B) any amounts attributable to Disqualified Shares.
"Current Market Value" per [unit?] of Debt Security or per share of
Preferred Stock or Common Stock or any other security at any date means (i) if
the security is not registered under the Exchange Act, (a) the value of the
security, determined in good faith by the Board of Directors and certified in a
board resolution, based on the most recently completed arm's length transaction
between the Company and a Person other than an Affiliate of the Company and the
closing of which occurs on such date or shall have occurred within the three-
month period preceding such date, or (b) if no such transaction shall have
occurred on such date or within such three-month period, the value of the
security as determined by an independent financial expert or (ii) if the
security is registered under the Exchange Act, the average of the daily closing
bid prices for each Business Day during the period commencing 15 Business Days
before such date and ending on the date one day prior to such date, or if the
security has been registered under the Exchange Act for less than 15 consecutive
Business Days before such date, then the average of the daily closing bid prices
for all of the Business Days before such date for which daily closing bid prices
are available; provided, however, that if the closing bid price is not
-------- -------
determinable for at least 10 Business Days in such period, the "Current Market
Value" of the security shall be determined as if the security were not
registered under the Exchange Act.
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Disqualified Shares" means, with respect to any Person, any share of
capital or other stock which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the happening
of any event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Shares or (iii) is redeemable or must be purchased, upon the
occurrence of certain events or otherwise, by such Person at the option of the
holder thereof, in whole or in part, in each case on or prior to ______ __,
____.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
<PAGE>
6
"Exercise Date" means, for a given Warrant, the day on which such Warrant
is exercised pursuant to Section 3.02.(b).
"Extraordinary Cash Dividend" means that portion, if any, of the aggregate
amount of all dividends paid by the Company on its Preferred Stock and Common
Stock in any fiscal year that exceeds $__________.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time.
"Holder" means the duly registered holder of a Warrant under the terms of
this Warrant Agreement.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication)(i) the principal in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable, including, in each case, any premium on
such indebtedness to the extent such premium has become due and payable, (ii)
all capital lease obligations of such Person, (iii) all obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such Person and all obligations of such Person
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business), (iv) all obligations of such Person
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (v) the amount of all obligations of
such Person with respect to the redemption, repayment or other repurchase of any
Disqualified Shares or, with respect to any Subsidiary of such Person, the
liquidation preference with respect to, any Preferred Stock (but excluding, in
each case, any accrued dividends), (vi) all obligations of the type referred to
in clauses (i) through (v) of other Persons and all dividends of other Persons
for the payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including by means
of any Guarantee, (vii) all obligations of the type referred to in clauses (i)
through (vi) of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of such
property or assets or the amount of the obligation so secured and (viii) to the
extent not otherwise included in this definition, Hedging Obligations of such
Person. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional
<PAGE>
7
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date.
"Indenture" means the Indenture dated as of ______ __, ____, between
ChiRex Inc. and _________, and the Trustee, with respect to the Notes, as it may
be amended or supplemented from time to time.
"Initial Public Offering" means the first time a registration statement
filed under the Securities Act respecting an offering, whether primary or
secondary, of Debt Securities, Preferred Stock or Common Stock (or securities
convertible into, or exchangeable or exercisable for, Debt Securities, Preferred
Stock or Common Stock or rights to acquire Debt Securities, Preferred Stock or
Common Stock or such securities, other than the Warrants) which is underwritten
on a firmly committed or best efforts basis, is declared effective and the
securities so registered are issued and sold.
"Initial Purchasers" means __________________.
"Issue Date" means the date on which the Warrants are initially issued.
"Non-U.S. Person" means a person who is not a U.S. person, as defined in
Regulation S.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Financial Officer, the Treasurer, or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Company.
"Officer's Certificate" means a certificate signed by [two] Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Warrant Agent. The counsel may be an employee of or counsel
to the Company or the Warrant Agent.
"Parent" means any Person that owns directly or indirectly all the Voting
Stock of the Company.
"Permitted Holder" means _______________.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
<PAGE>
8
["Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated, whether voting or
nonvoting) which is preferred as to the payment of dividends or distributions,
or as to the payment of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.]
"Preferred Stock or Public Offering" means an underwritten public offering
of Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Purchase Agreement" means the Purchase Agreement dated among the Company
and the Initial Purchasers.
"Public Market" means, for Debt Securities, Preferred Stock and Common
Stock, a time when (x) a Public Offering has been consummated in respect of at
least 15% of the total issued and outstanding principal amount of such Debt
Securities and 15% of the total issued and outstanding shares of such Preferred
Stock and Common Stock and (y) such Debt Securities, Preferred Stock and Common
Stock are registered under Section 13(a) or 15(d) of the Exchange Act and the
Company is current in its reporting thereunder.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement
between the Company and the Initial Purchasers, dated ____________.
"Regulation S" means Regulation S under the Securities Act.
"Repurchase Price" means (a) in respect of a Warrant, the Current Market
Value of the Debt Securities, Preferred Stock or Common Stock multiplied by the
number of Warrant Shares that would be obtained if such Warrant were exercised
on the date of repurchase and (b) in respect of a Warrant Share, the Current
Market Value for the Debt Securities, Preferred Stock or Common Stock.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933.
<PAGE>
9
"Transfer Restricted Securities" means the Warrants and the Debt
Securities, Preferred Stock or Common Stock which may be issued to Holders upon
exercise of the Warrants, whether or not such exercise has been effected. Each
such security shall cease to be a Transfer Restricted Security when (i) it has
been disposed of pursuant to a registration statement of the Company filed with
the SEC and declared effective by the SEC that covers the disposition of such
Transfer Restricted Security, (ii) it has been distributed pursuant to Rule 144
promulgated under the Securities Act (or any similar provisions under the
Securities Act then in effect) or (iii) it has been otherwise transferred and
may be resold without registration under the Securities Act.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof.
"Warrant Certificates" mean the registered certificates issued by the
Company under this Agreement representing the Warrants.
"Warrant Custodian" means the custodian with respect to a Global Warrant
(as appointed by the Depository) or any successor person thereto and shall
initially be the Warrant Agent.
"Warrant Shares" means the Principal Amount of Debt Securities, or number
of shares of Preferred Stock or Common Stock, as the case may be (or any other
securities), for which the Warrants are exercisable or which have been issued
upon exercise of Warrants.
SECTION 1.02. Other Definitions.
------------------
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------------
<S> <C>
"Certificate Register"..................... 2.03
"Change of Control Equity Offer"........... 5.05(a)
"Change of Control Equity Offer
Expiration Date"........................ 5.05(b)
"Class A Holders".......................... 5.06
"Common Stock"............................. Recitals
"Company".................................. Recitals
"Exchangeable Preferred Stock"............. Recitals
"Exercisability Date"...................... 3.02(a)
</TABLE>
<PAGE>
10
<TABLE>
<S> <C>
"Exercise Price"........................... 3.01
"Expiration Date".......................... 3.02(b)
"Global Warrant"........................... 2.01(a)
"Holders".................................. Recitals
"Losses"................................... 5.03(d)
"Managing Underwriter"..................... 5.01
"Offering"................................. Recitals
"Regulation S"............................. 2.01(a)
"Repurchase Notice"........................ 6.04(c)
"Rule 144A"................................ 2.01(a)
"Securities Transfer Agent"................ 3.05
"Separation Date".......................... Recitals
"Successor Company"........................ 4.05(a)
"Transfer Agent"........................... 2.01
"Triggering Date".......................... 5.04(a)
"Units".................................... Recitals
"Warrants"................................. Recitals
"Warrant Agent"............................ Recitals
"Warrant Repurchase"....................... 5.04(a)
</TABLE>
SECTION 1.03. Rules of Construction. Unless the text otherwise
----------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including, without limitation; and
(v) words in the singular include the plural and words in the
plural include the singular.
ARTICLE II
Warrant Certificates
--------------------
SECTION 2.01. Form and Dating. The Warrants shall be offered and
----------------
sold by the Company pursuant to the Purchase Agreement. Each Warrant shall
initially be issued as part of a Unit consisting of________. [Prior to the
Separation Date, the Warrants may not be transferred or exchanged separately
from, but may be transferred or exchanged only together with, the Exchangeable
Preferred Stock attached to such Warrants.] Prior to the Separation Date, the
transfer agent for the Exchangeable Debt
<PAGE>
11
Securities, Preferred Stock and Common Stock shall act as transfer agent
("Transfer Agent") for both the Warrants and the Exchangeable Debt Securities,
Preferred Stock and Common Stock. Any request for transfer of a Warrant prior to
the Separation Date made to the Transfer Agent shall be accompanied by the
Exchangeable Debt Securities, Preferred Stock and Common Stock attached thereto
and the Transfer Agent will not execute any such transfer without such
Exchangeable Debt Securities, Preferred Stock and Common Stock attached thereto.
Such Exchangeable Debt Securities, Preferred Stock and Common Stock will be duly
endorsed and accompanied by a written instrument of transfer in form
satisfactory to the Company, duly executed by the Holder thereof or the Holder's
attorneys duly authorized in writing. In the event of the commencement of a
registered exchange offer for the Exchangeable Debt Securities, Preferred Stock
and Common Stock or a shelf registration statement with respect to the
Exchangeable Debt Securities, Preferred Stock or Common Stock, the Company shall
provide notice to the Transfer Agent and the Warrant Agent of the Separation
Date not less than two Business Days prior to such date and the Company will
cause the Transfer Agent to notify the Depository of such date. [In the event of
a determination by the Initial Purchasers to separate the Warrants and the
Exchangeable Debt Securities, Preferred Stock or Common Stock, the Company shall
promptly, but in no event later than the next following Business Day after
receiving notice of such determination, provide notice to the Transfer Agent and
the Warrant Agent of the Separation Date and cause the Transfer Agent to notify
the Depositary of such date.] In acting as the transfer agent for the Warrants
prior to the Separation Date, the Transfer Agent shall be entitled to all the
rights, privileges and immunities to which the Warrant Agent is entitled in
performing such role pursuant to the terms of this Agreement.
SECTION 2.02. Execution and Countersignature. [Two] Officers shall
-------------------------------
sign the Warrant Certificate for the Company by manual or facsimile signature.
The Company's seal shall be impressed, affixed, imprinted or reproduced on the
Warrant Certificate and may be in facsimile form.
If an Officer whose signature is on a Warrant Certificate no longer
holds that office at the time the Warrant Agent countersigns the Warrant
Certificate, the Warrants evidenced by such Warrant Certificate shall be valid
nevertheless.
At any time and from time to time after the execution of this Warrant
Agreement, the Warrant Agent or an agent reasonably acceptable to the Company
shall upon
<PAGE>
12
receipt of a written order of the Company signed by __ Officers or by an Officer
and either an Assistant Secretary or an Assistant Treasurer of the Company
manually countersign for original issue a Warrant Certificate evidencing the
number of Warrants specified in such order; provided that the Warrant Agent
shall be entitled to receive an Officers' Certificate and an Opinion of Counsel
of the Company that it may reasonably request in connection with such
countersignature of Warrants. Such order shall specify the number of Warrants to
be evidenced on the Warrant Certificate to be countersigned, the date on which
such Warrant Certificate is to be countersigned and the number of Warrants then
authorized.
The Warrants evidenced by a Warrant Certificate shall not be valid
until an authorized signatory of the Trustee manually countersigns the Warrant
Certificate. The signature shall be conclusive evidence that the Warrant
Certificate has been countersigned under this Agreement.
SECTION 2.03. Certificate Register. The Warrant Agent shall keep a
---------------------
register ("Certificate Register") of the Warrant Certificates and of their
transfer and exchange. The Certificate Register shall show the names and
addresses of the respective Holders and the date and number of Warrants
evidenced on the face of each of the Warrant Certificates.
SECTION 2.04. Transfer and Exchange. (a) Legend. (i) Except as
---------------------- -------
permitted by the following paragraphs (ii) and (iii), each Warrant certificate
evidencing the [Global Warrants (and all Warrants and Warrant Shares issued in
exchange therefor or in substitution thereof)] shall bear a legend in
substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS SECURITY AND ANY SECURITY INTO WHICH SUCH SECURITY IS EXCHANGEABLE MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
<PAGE>
13
(i) WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (ii) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (v) TO THE COMPANY, IN EACH OF CASES (i) THROUGH (iv) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
pursuant to Rule 144 under the Securities Act, the Warrant Agent shall permit
the Holder thereof to exchange such Transfer Restricted Security for a
certificated Warrant that does not bear the legend set forth above and rescind
any restriction on the transfer of such Transfer Restricted Security, if the
Holder provides to the Warrant Agent an Opinion of Counsel acceptable to the
Warrant Agent and the Company to the effect that the request for such exchange
was made in reliance on Rule 144.
(iii) After a transfer of any Warrants during the period of the
effectiveness of a Shelf Registration Statement with respect to such Warrants,
all requirements pertaining to legends on such Warrant will cease to apply, the
requirements requiring any such Warrant issued to certain Holders to be issued
in global form will cease to apply, and a certificated Warrant without legends
will be available to the transferee of the Holder of such Warrants upon exchange
of such transferring Holder's certificated Warrant.
(b) Obligations with Respect to Transfers and Exchanges of Warrants.
---------------------------------------------------------------
(i) To permit registrations of transfers and exchanges, the Company shall
execute and the Warrant Agent shall countersign certificated Warrants as
required pursuant to the provisions of Section 2.02 and this Section 2.04.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any
<PAGE>
14
transfer tax, assessments, or similar governmental charge payable in connection
therewith.
(iii) Prior to the due presentation for registration of transfer of
any Warrant, the Company and the Warrant Agent may deem and treat the Person in
whose name a Warrant is registered as the absolute owner of such Warrant, and
neither the Company nor the Warrant Agent shall be affected by notice to the
contrary.
(iv) All Warrants issued upon any transfer or exchange pursuant to
the terms of this Agreement shall be the valid obligations of the Company,
entitled to the same benefits under this Agreement as the Warrants surrendered
upon such transfer or exchange.
(c) No Obligation of the Warrant Agent. (i) The Warrant Agent shall
----------------------------------
have no responsibility or obligation with respect to any ownership interest in
the Warrants or with respect to the delivery to any participant, member,
beneficial owner or other Person of any notice or the payment of any amount,
under or with respect to such Warrants. All notices and communications to be
given to the Holders and all payments to be made to Holders under the Warrants
shall be given or made only to or upon the order of the registered Holders. The
Warrant Agent may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its members, participants and any
beneficial owners.
(ii) The Warrant Agent shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Agreement or under applicable law with respect to any transfer of any
interest in any Warrant other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Agreement, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
SECTION 2.05. Replacement Certificates. If a mutilated Warrant
-------------------------
Certificate is surrendered to the Warrant Agent or if the Holder of a Warrant
Certificate claims that the Warrant Certificate has been lost, destroyed or
wrongfully taken, the Company shall issue and the Warrant Agent shall
countersign a replacement Warrant Certificate if the reasonable requirements of
the Warrant Agent and of Section 8-405 of the Uniform Commercial Code as in
effect in the State of New York are met. If required by the Warrant Agent or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Company and the
<PAGE>
15
Warrant Agent to protect the Company and the Warrant Agent from any loss which
either of them may suffer if a Warrant Certificate is replaced. The Company and
the Warrant Agent may charge the Holder for their expenses in replacing a
Warrant Certificate. Every replacement Warrant Certificate evidences an
additional obligation of the Company.
SECTION 2.06. Outstanding Warrants. Warrants outstanding at any time
---------------------
are all Warrants evidenced on all Warrant Certificates authenticated by the
Warrant Agent except for those canceled by it and those delivered to it for
cancelation. A Warrant does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Warrant.
If a Warrant Certificate is replaced pursuant to Section 2.05, the
Warrants evidenced thereby cease to be outstanding unless the Warrant Agent and
the Company receive proof satisfactory to them that the replaced Warrant
Certificate is held by a bona fide purchaser.
SECTION 2.07. Temporary Certificates. Until definitive Warrant
-----------------------
Certificates are ready for delivery, the Company may prepare and the Warrant
Agent shall countersign temporary Warrant Certificates. Temporary Warrant
Certificates shall be substantially in the form of definitive Warrant
Certificates but may have variations that the Company considers appropriate for
temporary Warrant Certificates. [Without unreasonable delay following the
occurrence of either of the events specified in Section [Refers to a Section I
took out of the document], (refers to section no longer in document) the Company
shall prepare and the Warrant Agent shall countersign definitive Warrant
Certificates and deliver them in exchange for temporary Warrant Certificates.]
SECTION 2.08. Cancelation. (a) In the event the Company shall
------------
purchase or otherwise acquire Certificated Warrants, the same shall thereupon be
delivered to the Warrant Agent for cancelation.
(b) The Warrant Agent and no one else shall cancel and destroy all
Warrant Certificates surrendered for transfer, exchange, replacement, exercise
or cancelation and deliver a certificate of such destruction to the Company
unless the Company directs the Warrant Agent to deliver canceled Warrant
Certificates to the Company. The Company may not issue new Warrant Certificates
to replace Warrant Certificates to the extent they evidence Warrants which have
been exercised or Warrants which the Company has purchased or otherwise
acquired.
<PAGE>
16
SECTION 2.09. CUSIP Numbers. The Company in issuing the Warrants may
--------------
use "CUSIP" numbers (if then generally in use) and, if so, the Warrant Agent
shall use "CUSIP" numbers in notices as a convenience to Holders; provided,
--------
however, that any such notice may state that no representation is made as to the
- -------
correctness of such numbers either as printed on the Warrant Certificates or as
contained in any notice and that reliance may be placed only on the other
identification numbers printed on the Warrant Certificates.
ARTICLE III
Exercise Terms
--------------
SECTION 3.01. Exercise Price. Each Warrant shall initially entitle
---------------
the Holder thereof, subject to adjustment pursuant to the terms of this
Agreement, to purchase either a principal amount of $_____ of Debt Securities
for an exercise price of $_____ (the "Debt Securities Exercise Price"), _____
shares of Preferred Stock for an exercise price of $_____ (the "Preferred Stock
Exercise Price"), or ____ shares of Common Stock for a per share exercise price
of $______ (the "Common Stock Exercise Price" along with the Debt Securities
Exercise Price and the Preferred Stock Exercise Price, the "Exercise Price").
SECTION 3.02. Exercise Periods. (a) Subject to the terms and
-----------------
conditions set forth herein, the Warrants shall be exercisable at any time or
from time to time on any Business Day on or after the earliest to occur of (i)
the first anniversary of the Issue Date and (ii)(a) the occurrence of a Change
of Control, (b)(1) 90 days after an Initial Public Offering or (2) upon the
closing of an Initial Public Offering by the Company but only in respect of
Warrants required to be exercised in order to permit the Holder thereof to sell
shares in such Initial Public Offering as permitted under Section [6.01][7.01],
(c) a consolidation, merger or purchase of assets involving the Company or any
of its subsidiaries that results in the Common Stock becoming subject to
registration under the Exchange Act, (d) an Extraordinary Cash Dividend, or (e)
the voluntary or involuntary dissolution, liquidation or winding up of the
affairs of the Company. The earliest to occur of the dates described in the
foregoing clauses (i) and (ii) shall be referred to herein as the
"Exercisability Date". The Company shall notify the Warrant Agent of the
occurrence of the Exercisability Date.
(b) No Warrant shall be exercisable after ______________ (the
"Expiration Date").
<PAGE>
17
SECTION 3.03. Expiration. A Warrant shall terminate and become void
-----------
as of the earlier of (i) the close of business on the Expiration Date or (ii)
the date such Warrant is exercised. The Company shall give notice not less than
90, and not more than 120, days prior to the Expiration Date to the Holders of
all then outstanding Warrants to the effect that the Warrants will terminate and
become void as of the close of business on the Expiration Date; provided,
--------
however, that notwithstanding that the Company may fail to give notice as
- -------
provided in this Section 3.03, the Warrants will terminate and become void on
the Expiration Date.
SECTION 3.04. Manner of Exercise. Warrants may be exercised upon (i)
-------------------
surrender to the Warrant Agent of the Warrant Certificates, together with the
form of election to purchase Debt Securities, Preferred Stock or Common Stock in
the form of Exhibit B hereto duly filled in and signed by the Holder thereof and
(ii) payment to the Warrant Agent, for the account of the Company, of the
Exercise Price for the number of Warrant Shares in respect of which such Warrant
is then exercised. Such payment shall be made (a) in cash or by certified or
official bank check payable to the order of the Company or by wire transfer of
funds to an account designated by the Company for such purpose or (b) by the
surrender of one or more Warrant Certificates (and without the payment of the
Exercise Price in cash) in exchange for such principal amount of Debt
Securities, or such number of shares of Preferred Stock or Common Stock, as the
case may be, equal to the product of (1) the principal amount of Debt
Securities, or such number of shares of Preferred Stock or Common Stock, as the
case may be, for which such Warrant is exercisable as of the Exercise Date (if
the Exercise Price were being paid in cash) and (2) the Cashless Exercise Ratio.
Upon surrender of a Warrant Certificate representing more than one Warrant in
connection with the Holder's option to elect a Cashless Exercise, the principal
amount of Debt Securities, or such number of shares of Preferred Stock or Common
Stock, as the case may be, deliverable upon a Cashless Exercise shall be equal
to the product of the principal amount of Debt Securities, or such number of
shares of Preferred Stock or Common Stock, as the case may be, issuable in
respect of those Warrants that the Holder specifies are to be exercised pursuant
to a Cashless Exercise multiplied by the Cashless Exercise Ratio. All provisions
of this Agreement shall be applicable with respect to an exercise of Warrant
Certificates pursuant to a Cashless Exercise for less than the full number of
Warrants represented thereby. Subject to Section 3.02, the rights represented
by the Warrants shall be exercisable at the election of the Holders thereof
either in full at any time or from time to time in part and in the event that a
Warrant
<PAGE>
18
Certificate is surrendered for exercise in respect of less than all the Warrant
Shares purchasable on such exercise at any time prior to the expiration of the
Expiration Date, a new Warrant Certificate exercisable for the remaining Warrant
Shares will be issued. The Warrant Agent shall countersign and deliver the
required new Warrant Certificates, and the Company, at the Warrant Agent's
request, shall supply the Warrant Agent with Warrant Certificates duly signed on
behalf of the Company for such purpose.
SECTION 3.05. Issuance of Warrant Shares. Upon the surrender of
---------------------------
Warrant Certificates as set forth in Section 3.04, the Company shall issue and
cause the Warrant Agent or, if appointed, a transfer agent for the Debt
Securities, Preferred Stock or Common Stock ("Securities Transfer Agent") to
countersign and deliver to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate or certificates for the
number of full Warrant Shares so purchased upon the exercise of such Warrants or
other securities or property to which it is entitled, registered or otherwise,
to the Person or Persons entitled to receive the same, together with cash as
provided in Section 3.06 in respect of any fractional Warrant Shares otherwise
issuable upon such exercise. Such certificate or certificates shall be deemed
to have been issued and any Person so designated to be named therein shall be
deemed to have become a holder of record of such Warrant Shares as of the date
of the surrender of such Warrant Certificates and payment of the per share
Exercise Price.
SECTION 3.06. Fractional Warrant Shares. The Company shall not be
--------------------------
required to issue fractional Warrant Shares on the exercise of Warrants. If
more than one Warrant shall be exercised in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of Warrant
Shares purchasable pursuant thereto. If any fraction of a Warrant Share would,
except for the provisions of this Section 3.06, be issuable upon the exercise of
any Warrant (or specified portion thereof), the Company may pay an amount in
cash equal to the Current Market Value for one Warrant Share on the day
immediately preceding the date the Warrant is presented for exercise, multiplied
by such fraction, computed to the nearest whole cent.
SECTION 3.07. Reservation of Warrant Shares. The Company shall at
------------------------------
all times keep reserved out of its aggregate principal amount of Debt Securities
and authorized shares of Preferred Stock and Common Stock, a principal
<PAGE>
19
amount of Debt Securities and a number of shares of Preferred Stock and Common
Stock sufficient to provide for the exercise of all outstanding Warrants. The
registrar for the Debt Securities, Preferred Stock and Common Stock shall at all
times until the Expiration Date, or the time at which all Warrants have been
exercised or canceled, reserve such number of authorized shares as shall be
required for such purpose. The Company will keep a copy of this Agreement on
file with the Stock Transfer Agent. The Company will supply such Stock Transfer
Agent with duly executed stock certificates for such purpose and will itself
provide or otherwise make available any cash which may be payable as provided in
Section 3.06. The Company will furnish to such Stock Transfer Agent a copy of
all notices of adjustments and certificates related thereto transmitted to each
Holder.
Before taking any action which would cause an adjustment pursuant to
Article IV to reduce the Exercise Price below the principal amount of Debt
Securities and then par value of the Preferred Stock and Common Stock, the
Company shall take any and all corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable principal amounts of Debt Securities and shares of
Preferred Stock and Common Stock at the Exercise Price as so adjusted.
The Company covenants for the benefit of Holders of Warrants and
Warrant Shares that the total principal amount of Debt Securities, and all
shares of Preferred Stock and Common Stock which may be issued upon exercise of
Warrants will, upon issue, be fully paid, nonassessable, free of preemptive
rights, free from all taxes and free from all liens, charges and security
interests, created by or through the Company, with respect to the issue thereof.
SECTION 3.08. Compliance with Law. (a) Notwithstanding anything in
--------------------
this Agreement to the contrary, in no event shall a Holder be entitled to
exercise a Warrant unless (i) a registration statement filed under the
Securities Act in respect of the issuance of the Warrant Shares is then
effective or (ii) an exemption from the registration requirements is available
under the Securities Act for the issuance of the Warrant Shares (and the
delivery of any other securities for which the Warrants may at the time be
exercisable) at the time of such exercise.
(b) If any Debt Securities or shares of Preferred Stock or Common
Stock required to be reserved for purposes of exercise of Warrants require,
under any other Federal or state law or applicable governing rule or regulation
of any national securities exchange, registration with or approval
<PAGE>
20
of any governmental authority, or listing on any such national securities
exchange before such shares may be issued upon exercise, the Company will cause
such shares to be duly registered or approved by such governmental authority or
listed on the relevant national securities exchange, as the case may be.
ARTICLE IV
Covenants
---------
From and after the Closing Date and until the earlier of the
Expiration Date or the exercise of all outstanding Warrants:
SECTION 4.01. Corporate Existence. The Company will preserve and
--------------------
keep in full force and effect its corporate or other existence and all licenses
and permits necessary to the proper conduct of the business of the Company,
taken as a whole.
SECTION 4.02. Insurance. At the reasonable request of Holders
----------
representing a majority of the outstanding Warrants, the Company will maintain
insurance coverage by financially sound and reputable insurers and in such forms
and amounts and against such risks as are customary for companies of established
reputation engaged in the same or a similar business and owning and operating
similar properties.
SECTION 4.03. Taxes, Claims for Labor and Materials, Compliance with
------------------------------------------------------
Laws; Liens. (a) The Company will promptly pay and discharge (i) all lawful
- ------------
taxes, assessments and governmental charges or levies imposed upon the Company,
or upon or in respect of all or any part of the property or business of the
Company, (ii) all trade accounts payable in accordance with usual and customary
business terms, and (iii) all claims for work, labor or materials, which if
unpaid might become a Lien upon any property of the Company; provided, however,
-------- -------
that the Company shall be required to pay or discharge any such tax, assessment,
charge, levy, account payable or claim if (y) the validity, applicability or
amount thereof is being contested in good faith by appropriate actions or
proceedings, the pendency of which will prevent the forfeiture or sale of any
property of the Company or any material interference with the use thereof by the
Company, and (z) the Company shall set aside on its books, reserves deemed by it
to be adequate with respect thereto.
<PAGE>
21
(b) The Company shall not create or permit to exist any lien,
security interest or other encumbrance on any of its properties, other than
liens existing on the date hereof.
SECTION 4.04. Maintenance. Except as the same may be replaced or
------------
become surplus to the needs of the Company, the Company will maintain, preserve
and keep its properties which are used or useful in the conduct of the business
of the Company, taken as a whole (whether owned in fee or a leasehold interest),
in good repair and working order and from time to time will make all necessary
repairs, replacements, renewals and additions so that at all times the
efficiency thereof shall be maintained.
SECTION 4.05. Nature of Business. The Company will not engage in any
-------------------
business if, as a result, the general nature of the business which would then be
engaged in by the Company would be substantially changed from the general nature
of the business engaged in by the Company on the date hereof.
SECTION 4.06. Transactions with Affiliates. The Company shall not
-----------------------------
enter into or be a party to any transaction or arrangement with any Affiliate
(including the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate).
SECTION 4.07. Reports and Rights of Inspection. The Company shall
---------------------------------
keep proper books of record and account in which full and correct entries will
be made of all dealings or transactions of or in relation to the business and
affairs of the Company in accordance with GAAP consistently applied (except for
changes disclosed in the financial statements furnished to you pursuant to this
Section 4.07 and concurred in by the independent public accountants referred to
in Section 4.07(b) hereof), and will furnish to each Holder (or cause to be
furnished to each Holder):
(a) Quarterly Statements. As soon as available and in any event
---------------------
within 45 days after the end of each quarterly fiscal period (except the
last) of each fiscal year, copies of:
(1) consolidated balance sheets of the Company as of the close of
such quarterly fiscal period,
(2) consolidated statements of income and stockholders' equity of
the Company for such quarterly fiscal period, and
<PAGE>
22
(3) consolidated statements of cash flows of the Company for the
portion of the fiscal year ending with such quarter,
in each case setting forth in comparative form the consolidated figures for the
corresponding period of the preceding fiscal year, all in reasonable detail and
certified as complete and correct, by an authorized financial officer of the
Company.
(b) Annual Statements. As soon as available and in any event within
------------------
120 days after the close of each fiscal year of the Company, copies of:
(1) consolidated balance sheets of the Company as of the close of
such fiscal year,
(2) consolidated statements of income and stockholders' equity of
the Company for such fiscal year, and
(3) consolidated statements of cash flows of the Company for such
fiscal year,
in each case setting forth in comparative form the consolidated figures for the
preceding fiscal year, all in reasonable detail and accompanied by a report
thereon of a firm of independent public accountants of recognized national
standing selected by the Company to the effect that such annual financial
statements present fairly, in all material respects, the financial condition of
the Company in accordance with GAAP and that the examination of such accountants
in connection with such financial statements has been made in accordance with
generally accepted auditing standards.
(c) Audit Reports. Promptly upon receipt thereof, one copy of each
--------------
interim or special audit made by independent accountants of the books of
the Company and any management letter received from such accountants.
(d) SEC and Other Reports. Promptly upon their becoming available,
----------------------
one copy of each financial statement, report, notice or proxy statement
sent by the Company to stockholders generally and of each regular or
periodic report, and any registration statement or prospectus, filed by the
Company or any of their respective subsidiaries with any securities
exchange or the Securities and Exchange Commission or any successor agency,
and copies of any orders in any proceedings brought by any governmental
agency,
<PAGE>
23
Federal, State or foreign, to which the Company is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the Company
or any of its Subsidiaries.
(e) Officers' Certificates. Within the periods provided in paragraphs
-----------------------
(a) and (b) above, a certificate of the Company signed by an authorized
financial officer of the Company stating that the Company has reviewed the
provisions of this Agreement and setting forth whether there existed as of
the date of such financial statements and whether there exists on the date
of the certificate or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate, specifying the
nature and period of existence thereof and the action the Company is taking
and proposes to take with respect thereto.
(f) Accountant's Certificates. Within the period provided in
--------------------------
paragraph (b) above, a certificate of the accountants who report on such
financial statements, stating that they have reviewed this Agreement and
stating further whether, in making their audit, such accountants have
become aware of any Default or Event of Default under or any of the terms
or provisions of this Agreement insofar as any such terms or provisions
pertain to or involve accounting matters or determinations, and if any such
condition or event then exists, specifying the nature and period of
existence thereof.
(g) Requested Information. With reasonable promptness, such other
----------------------
data and information as you or any such Holder may reasonably request.
Without limiting the foregoing, the Company will permit each Holder of the then
outstanding Warrants (or such Persons as either you or such Holder may
designate) to visit and inspect, under the Company's guidance, any of the
properties of the Company, to examine all their books of account, records,
reports and other papers, to make copies and extracts therefrom and to discuss
their respective affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this provision the Company
authorizes said accountants to discuss with you, in the presence of a
representative of the Company (unless such representative refuses or otherwise
fails to participate after receiving reasonable notice) the finances and affairs
of the Company) all at such reasonable times and as often as may be reasonably
requested.
<PAGE>
24
SECTION 4.08. Repurchase of Warrants. Neither the Company nor any
-----------------------
affiliate controlling, controlled by or under common control with the Company,
directly or indirectly, may repurchase or make any offer to repurchase any
Warrants unless an offer has been made to repurchase Warrants, pro rata, from
all holders of the Warrants at the same time and upon the same terms. Any
Warrant directly or indirectly held by an Affiliate of the Company shall not be
deemed to be "outstanding" for purposes of any provision of this Agreement
involving an amendment, waiver, consent or other action to be taken by the
holders of the Warrants.
[SECTION 4.09. Capitalization. Schedule 4.09 hereto sets forth a
---------------
complete and accurate list of all outstanding equity securities of the Issuer
(including securities that are exercisable, convertible or exchangeable for
equity securities of such Issuer), and all commitments, written or otherwise,
relating to the issuance in the future of any such securities. - NOTE: If this
section is kept we need to prepare a Schedule outlining the above.]
SECTION 4.10. Letter Agreements. On the date hereof, the Issuer
------------------
shall duly execute and deliver to the Warrant Agent a Letter Agreement
substantially in the form of Annex A hereto. In connection with the exercise by
a Holder of Warrants for the purchase of Shares of the Issuer, the Warrant Agent
shall deliver to such Holder, together with certificates evidencing the Shares
issuable in connection with such exercise, a copy of such executed Letter
Agreement (keeping the original execution copy in its own files). The Issuer
hereby agrees for the benefit of each Holder that such Letter Agreement may be
enforced in accordance with its terms by such Holder without the production into
evidence of the original executed version of such Letter Agreement.
ARTICLE V
Antidilution Provisions
-----------------------
SECTION 5.01. Changes in Preferred Stock or Common Stock. In the
-------------------------------------------
event that at any time or from time to time the Company shall (i) pay a dividend
or make a distribution on its Preferred Stock or Common Stock in shares of its
Preferred Stock or Common Stock or other shares of Capital Stock, (ii) subdivide
its outstanding shares of Preferred Stock or Common Stock into a larger number
of shares of Preferred Stock or Common Stock, (iii) combine its outstanding
shares of Preferred Stock or Common Stock into a smaller number of shares of
Preferred Stock or Common Stock or (iv) increase or decrease the
<PAGE>
25
number of shares of Preferred Stock or Common Stock outstanding by
reclassification of its Preferred Stock or Common Stock, then the number of
shares of Preferred Stock or Common Stock purchasable upon exercise of each
Warrant immediately after the happening of such event shall be adjusted so that,
after giving effect to such adjustment, the Holder of each Warrant shall be
entitled to receive the number of shares of Preferred Stock or Common Stock upon
exercise of such Warrant that such Holder would have owned or have been entitled
to receive had such Warrants been exercised immediately prior to the happening
of the events described above (or, in the case of a dividend or distribution of
Preferred Stock or Common Stock, immediately prior to the record date therefor).
An adjustment made pursuant to this Section 5.01 shall become effective
immediately after the distribution date, retroactive to the record date therefor
in the case of a dividend or distribution in shares of Preferred Stock or Common
Stock, and shall become effective immediately after the effective date in the
case of a subdivision, combination or reclassification.
SECTION 5.02. Changes in Debt Securities. [Do we need this section?]
---------------------------
SECTION 5.03. Cash Dividends and Other Distributions. [Q: Do
----------------------------------------
interest payments on Debt Securities qualify as "distributions"?] In case at
any time or from time to time the Company shall distribute to holders of
Preferred Stock or Common Stock (i) any dividend or other distribution
(including any dividend or distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of cash, evidences
of its indebtedness, shares of its Capital Stock or any other properties or
securities or (ii) any options, warrants or other rights to subscribe for or
purchase any of the foregoing (other than, in the case of clause (i) and (ii)
above, (x) any dividend or distribution described in Section 5.01, (y) any
rights, options, warrants or securities described in Section ____ and Section
____ and (z) any cash dividends or distributions from current or retained
earnings other than Extraordinary Cash Dividends), then the number of shares of
Preferred Stock or Common Stock purchasable upon the exercise of each Warrant
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution shall be increased to a number
determined by multiplying the number of shares of Preferred Stock or Common
Stock purchasable upon the exercise of such Warrant immediately prior to such
record date for any such dividend or distribution by a fraction, the numerator
of which shall be the Current Market Value per share of Preferred Stock or
Common Stock on the
<PAGE>
26
record date for such distribution, and the denominator of which shall be such
Current Market Value per share of Preferred Stock or Common Stock less the sum
of (x) any cash distributed per share of Preferred Stock or Common Stock and (y)
the fair value (the "Fair Value") (as determined in good faith by the Board,
whose determination shall be evidenced by a board resolution filed with the
Warrant Agent, a copy of which will be sent to Holders upon request) of the
portion, if any, of the distribution applicable to one share of Preferred Stock
or Common Stock consisting of evidences of indebtedness, shares of stock,
securities, other property, warrants, options or subscription of purchase
rights; and the Exercise Price shall be adjusted to a number determined by
dividing the Exercise Price immediately prior to such record date by the above
fraction. Such adjustments shall be made, and shall only become effective,
whenever any dividend or distribution is made; provided, however, that the
-------- -------
Company is not required to make an adjustment pursuant to this Section 5.03 if
at the time of such distribution the Company makes the same distribution to
Holders of Warrants as it makes to holders of Preferred Stock or Common Stock
pro rata based on the number of shares of Preferred Stock or Common Stock for
which such Warrants are exercisable (whether or not currently exercisable). No
adjustment shall be made pursuant to this Section 5.03 which shall have the
effect of decreasing the number of shares of Preferred Stock or Common Stock
purchasable upon exercise of each Warrant or increasing the Exercise Price.
SECTION 5.04. Debt Security Issue. In the event that at any time or
--------------------
from time to time the Company shall issue a principal amount of Debt Securities
for a consideration that is less than the Current Market Value [per unit?] of
the Debt Security as of the issuance date of such Debt Security, the principal
amount of Debt Securities purchasable upon the exercise of each Warrant
immediately after such issuance date shall be determined by multiplying the
principal amount of Debt Securities purchasable upon exercise of each Warrant
immediately prior to such issuance date by a fraction, the numerator of which
shall be the aggregate principal amount of Debt Securities outstanding
immediately preceding the issuance of such shares plus the additional principal
amount of Debt Securities to be issued in such transaction, and the denominator
of which shall be the aggregate principal amount of Debt Securities out-
standing immediately preceding the date for the issuance of such shares plus the
total principal amount of Debt Securities which the aggregate consideration
expected to be received by the Company upon the issuance of such Debt Securities
(as determined by the Board of Directors of the Company acting in good faith,
whose determination shall be evidenced by a board resolution) would purchase at
the
<PAGE>
27
Current Market Value [per unit?] of Debt Security as of the date of such
issuance. In the event of any such adjustment, the Debt Securities Exercise
Price shall be adjusted to a number determined by dividing the Debt Securities
Exercise Price immediately prior to such date of issuance by the aforementioned
fraction. Such adjustment shall be made, and shall only become effective,
whenever such shares are issued. No adjustment shall be made pursuant to this
Section 5.12 which shall have the effect of decreasing the principal amount of
Debt Securities purchasable upon exercise of each Warrant or of increasing the
Debt Securities Exercise Price.
SECTION 5.05. Preferred Stock Issue. In the event that at any time
----------------------
or from time to time the Company shall issue shares of Preferred Stock for a
consideration per share that is less than the Current Market Value per share of
Preferred Stock as of the issuance date of such shares, the number of shares of
Preferred Stock purchasable upon the exercise of each Warrant immediately after
such issuance date shall be determined by multiplying the number of shares of
Preferred Stock purchasable upon exercise of each Warrant immediately prior to
such issuance date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding immediately preceding the issuance of such
shares plus the number of additional shares of Preferred Stock to be issued in
such transaction, and the denominator of which shall be the number of shares of
Preferred Stock outstanding immediately preceding the date for the issuance of
such shares plus the total number of shares of Preferred Stock which the
aggregate consideration expected to be received by the Company upon the issuance
of such shares (as determined by the Board of Directors of the Company acting in
good faith, whose determination shall be evidenced by a board resolution) would
purchase at the Current Market Value per share of Preferred Stock as of the date
of such issuance. In the event of any such adjustment, the Preferred Stock
Exercise Price shall be adjusted to a number determined by dividing the
Preferred Stock Exercise Price immediately prior to such date of issuance by the
aforementioned fraction. Such adjustment shall be made, and shall only become
effective, whenever such shares are issued. No adjustment shall be made
pursuant to this Section 5.12 which shall have the effect of decreasing the
number of shares of Preferred Stock purchasable upon exercise of each Warrant or
of increasing the Preferred Stock Exercise Price.
SECTION 5.06. Common Stock Issue. In the event that at any time or
-------------------
from time to time the Company shall issue shares of Common Stock for a
consideration per share that is less than the Current Market Value per share of
<PAGE>
28
Common Stock as of the issuance date of such shares, the number of shares of
Common Stock purchasable upon the exercise of each Warrant immediately after
such issuance date shall be determined by multiplying the number of shares of
Common Stock purchasable upon exercise of each Warrant immediately prior to such
issuance date by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately preceding the issuance of such
shares plus the number of additional shares of Common Stock to be issued in such
transaction, and the denominator of which shall be the number of shares of
Common Stock outstanding immediately preceding the date for the issuance of
such shares plus the total number of shares of Common Stock which the aggregate
consideration expected to be received by the Company upon the issuance of such
shares (as determined by the Board of Directors of the Company acting in good
faith, whose determination shall be evidenced by a board resolution) would
purchase at the Current Market Value per share of Common Stock as of the date of
such issuance. In the event of any such adjustment, the Common Stock Exercise
Price shall be adjusted to a number determined by dividing the Common Stock
Exercise Price immediately prior to such date of issuance by the aforementioned
fraction. Such adjustment shall be made, and shall only become effective,
whenever such shares are issued. No adjustment shall be made pursuant to
Section 5.12 which shall have the effect of decreasing the number of shares of
Common Stock purchasable upon exercise of each Warrant or of increasing the
Common Stock Exercise Price.
SECTION 5.07. Issuance of Rights or Options. In the event that at
------------------------------
any time or from time to time the Company shall issue rights, options or
warrants to acquire, or securities convertible or exchangeable into Debt
Securities, Preferred Stock or Common Stock entitling the holders thereof to
subscribe for or purchase a principal amount of Debt Securities, or shares of
Preferred Stock or Common Stock, at a price per share that is less than the
Current Market Value of Debt Securities, or shares of Preferred Stock or Common
Stock, in effect immediately prior to such issuance, the principal amount of
Debt Securities, or the number of shares of Preferred Stock or Common Stock,
purchasable upon the exercise of each Warrant immediately after such issuance
shall be determined by multiplying the principal amount of Debt Securities, or
the number of shares of Preferred Stock or Common Stock, purchasable upon
exercise of each Warrant immediately prior to such issuance by a fraction, the
numerator of which shall be the principal amount of Debt Securities, Preferred
Stock or Common Stock outstanding immediately prior to the issuance of such
rights, options, warrants or securities plus the number of additional principal
amount of Debt Securities, or number of
<PAGE>
29
shares of Preferred Stock or Common Stock, offered for subscription or purchase
or into which such securities are convertible or exchangeable, and the
denominator of which shall be the principal amount of shares of Debt Securities,
or number of shares of Preferred Stock or Common Stock, outstanding immediately
prior to the issuance of such rights, options, warrants or securities plus the
total principal amount of shares of Debt Securities, or number of shares of
Preferred Stock or Common Stock, which the aggregate consideration expected to
be received by the Company upon the exercise, conversion or exchange of such
rights, options, warrants or securities (as determined by the Board of Directors
of the Company acting in good faith, whose determination shall be evidenced by a
board resolution) would purchase at the Current Market Value of Debt Securities,
or per share of Preferred Stock or Common Stock, as of the record date. In the
event of any such adjustment, the Exercise Price shall be adjusted to a number
determined by dividing the Exercise Price immediately prior to such date of
issuance by the aforementioned fraction. Such adjustment shall be made, and
shall only become effective, whenever such rights, options, warrants or
securities are issued. No adjustment shall be made pursuant to this Section 5.07
which shall have the effect of decreasing the principal amount of Debt
Securities, or number of shares of Preferred Stock or Common Stock, purchasable
upon exercise of each Warrant or of increasing the Exercise Price.
SECTION 5.08. Combination; Liquidation. (a) Except as provided in
-------------------------
Section 5.08(b), in the event of a Combination, the Holders shall have the right
to receive upon exercise of the Warrants such number of shares of Capital Stock
or other securities or property which such Holder would have been entitled to
receive upon completion of or as a result of such Combination had such Warrant
been exercised immediately prior to such event or to the relevant record date
for any such entitlement. Unless paragraph (b) is applicable to a Combination,
the Company shall provide that the surviving or acquiring Person (the "Successor
Company") in such Combination will enter into an agreement with the Warrant
Agent confirming the Holders' rights pursuant to this Section 5.08(a) and
providing for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article V. The provisions
of this Section 5.08(a) shall similarly apply to successive Combinations
involving any Successor Company.
(b) In the event of (i) a Combination where consideration to the
holders of Debt Securities, Preferred Stock or Common Stock in exchange for
their principal amount or their shares, as the case may be, is payable solely in
<PAGE>
30
cash, or (ii) in the event of the dissolution, liquidation or winding-up of the
Company, then the Holders of the Warrants will be entitled to receive such cash
distributions on an equal basis with the holders of Debt Securities, Preferred
Stock or Common Stock or other Securities issuable upon exercise of the
Warrants, as if the Warrants had been exercised immediately prior to such event,
less the Exercise Price.
In the event of any Combination described in this Section 5.08(b), the
surviving or acquiring Person and, in the event of any dissolution, liquidation
or winding-up of the Company, the Company shall deposit promptly with the
Warrant Agent the funds, if any, necessary to pay to the Holders of the Warrants
the amounts to which they are entitled as described above. After such funds and
the surrendered Warrant Certificates are received, the Warrant Agent shall make
payment to the Holders by delivering a check in such amount as is appropriate
(or, in the case of consideration other than cash, such other consideration as
is appropriate) to such Person or Persons as it may be directed in writing by
the Holders surrendering such Warrants.
SECTION 5.09. Tender Offers; Exchange Offers. In the event that the
-------------------------------
Company or any subsidiary of the Company shall purchase shares of Preferred
Stock or Common Stock pursuant to a tender offer or an exchange offer for a
price per share of Preferred Stock or Common Stock that is greater than the then
Current Market Value per share of Preferred Stock or Common Stock in effect at
the end of the trading day immediately following the day on which such tender
offer or exchange offer expires, then the Company, or such subsidiary of the
Company, shall offer to purchase Warrants for comparable consideration per share
of Preferred Stock or Common Stock based on the number of shares of Preferred
Stock or Common Stock which the Holders of such Warrants would receive upon
exercise of such Warrants; provided, however, that if a tender offer is made for
-------- -------
only a portion of the outstanding shares of Preferred Stock or Common Stock,
then such offer shall be made for Warrants in the same pro rata proportion.
SECTION 5.10. Other Events. If any event occurs as to which the
-------------
foregoing provisions of this Article V are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board, fairly
and adequately protect the purchase rights of the Warrants in accordance with
the essential intent and principles of such provisions, then the Board shall
make such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably
<PAGE>
31
necessary, in the good faith opinion of such Board, to protect such purchase
rights as aforesaid, but in no event shall any such adjustment have the effect
of increasing the Exercise Price or decreasing the principal amount of Debt
Securities, or number of shares of Preferred Stock or Common Stock subject to
purchase upon exercise of this Warrant.
SECTION 5.11. Superseding Adjustment. Upon the expiration of any
-----------------------
rights, options, warrants or conversion or exchange privileges which resulted in
the adjustments pursuant to this Article V, if any thereof shall not have been
exercised, the number of Warrant Shares purchasable upon the exercise of each
Warrant shall be readjusted as if (A) the only Debt Securities, or shares of
Preferred Stock or Common Stock issuable upon exercise of such rights, options,
warrants, conversion or exchange privileges were the Debt Securities, or shares
of Preferred Stock or Common Stock, if any, actually issued upon the exercise of
such rights, options, warrants or conversion or exchange privileges and (B) Debt
Securities, or shares of Preferred Stock or Common Stock actually issued, if
any, were issuable for the consideration actually received by the Company upon
such exercise plus the aggregate consideration, if any, actually received by the
Company for the issuance, sale or grant of all such rights, options, warrants or
conversion or exchange privileges whether or not exercised and the Exercise
Price shall be readjusted inversely; provided, however, that no such
-------- -------
readjustment shall (except by reason of an intervening adjustment under Section
5.01) have the effect of decreasing the number of Warrant Shares purchasable
upon the exercise of each Warrant or increasing the Exercise Price by an amount
in excess of the amount of the adjustment initially made in respect of the
issuance, sale or grant of such rights, options, warrants or conversion or
exchange privileges.
SECTION 5.12. Minimum Adjustment. The adjustments required by the
-------------------
preceding Sections of this Article V shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that no adjustment
of the Exercise Price or the principal amount of Debt Securities, or the number
of shares of Preferred Stock or Common Stock purchasable upon exercise of
Warrants that would otherwise be required shall be made (except in the case of a
subdivision or combination of a principal amount of Debt Securities, and/or
shares of Preferred Stock or Common Stock, as provided for in Section 5.01)
unless and until such adjustment either by itself or with other adjustments not
previously made increases or decreases by at least [1%] the Exercise Price or
the principal amount of Debt Securities, or the number of shares of Preferred
Stock or Common Stock purchasable upon exercise of Warrants
<PAGE>
32
immediately prior to the making of such adjustment. Any adjustment representing
a change of less than such minimum amount shall be carried forward and made as
soon as such adjustment, together with other adjustments required by this
Article V and not previously made, would result in a minimum adjustment. For the
purpose of any adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence. In computing adjustments
under this Article V, fractional interests in Debt Securities, Preferred Stock
or Common Stock shall be taken into account to the nearest one-hundredth of a
share.
SECTION 5.13. Notice of Adjustment. Whenever the Exercise Price or
---------------------
the principal amount of Debt Securities, or the number of shares of Preferred
Stock or Common Stock and other property, if any, purchasable upon exercise of
Warrants is adjusted, as herein provided, the Company shall deliver to the
Warrant Agent a certificate of a firm of independent accountants selected by the
Board (who may be the regular accountants employed by the Company) setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated (including a description of the basis on
which the Board of Directors of the Company determined the fair market value of
any evidences of indebtedness, other securities or property or warrants or other
subscription or purchase rights), and specifying the Exercise Price and the
principal amount of Debt Securities, or the number of shares of Preferred Stock
or Common Stock purchasable upon exercise of Warrants after giving effect to
such adjustment. The Company shall promptly cause the Warrant Agent to mail a
copy of such certificate to each Holder in accordance with Section 8.07. The
Warrant Agent shall be entitled to rely on such certificate and shall be under
no duty or responsibility with respect to any such certificate, except to
exhibit the same from time to time, to any Holder desiring an inspection thereof
during reasonable business hours. The Warrant Agent shall not at any time be
under any duty or responsibility to any Holder to determine whether any facts
exist which may require any adjustment of the Exercise Price or the principal
amount of Debt Securities, or the number of shares of Preferred Stock or Common
Stock or other stock or property, purchasable on exercise of the Warrants, or
with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed in making such adjustment or the validity or
value of the Debt Securities, or any shares of Preferred Stock or Common Stock.
SECTION 5.14. Notice of Certain Transactions. In the event that the
-------------------------------
Company shall propose (a) to pay any dividend payable in securities of any class
to the holders
<PAGE>
33
of its Preferred Stock or Common Stock or to make any other distribution to the
holders of its Debt Securities, Preferred Stock or Common Stock, (b) to effect
any capital reorganization, consolidation or merger or (c) to effect the
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
or in the event of a tender offer or exchange offer described in Section 5.08,
the Company shall within 5 days send to the Warrant Agent and the Warrant Agent
shall within 5 days send the Holders a notice (in such form as shall be
furnished to the Warrant Agent by the Company) of such proposed action or offer,
such notice to be mailed by the Warrant Agent to the Holders at their addresses
as they appear in the Certificate Register, which shall specify the record date
for the purposes of such dividend, distribution, or the date such issuance or
event is to take place and the date of participation therein by the holders of
Debt Securities, Preferred Stock or Common Stock, if any such date is to be
fixed, and shall briefly indicate the effect of such action on the Debt
Securities, Preferred Stock or Common Stock and on the number and kind of any
other shares of stock and on other property, if any, and the principal amount of
Debt Securities, or the number of shares of Preferred Stock or Common Stock and
other property, if any, purchasable upon exercise of each Warrant and the
Exercise Price after giving effect to any adjustment which will be required as a
result of such action. Such notice shall be given as promptly as possible and,
in the case of any action covered by clause (a) above, at least 10 days prior to
the record date for determining holders of the Debt Securities, Preferred Stock
or Common Stock for purposes of such action and, in the case of any other such
action, at least 20 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of Debt Securities,
Preferred Stock or Common Stock, whichever shall be the earlier.
SECTION 5.15. Adjustment to Warrant Certificate. The form of Warrant
----------------------------------
Certificate need not be changed because of any adjustment made pursuant to this
Article V, and Warrant Certificates issued after such adjustment may state the
same Exercise Price and the same principal amount of Debt Securities, or the
number of shares of Preferred Stock or Common Stock as are stated in the Warrant
Certificates initially issued pursuant to this Agreement. The Company, however,
may at any time in its sole discretion make any change in the form of Warrant
Certificate that it may deem appropriate to give effect to such adjustments and
that does not affect the substance of the Warrant Certificate, and any Warrant
Certificate thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant Certificate or otherwise, may be in the
form as so changed.
<PAGE>
34
ARTICLE VI
Registration and Repurchase Rights
----------------------------------
SECTION 6.01. Registration Rights. (a) If the Company proposes to
--------------------
sell a principal amount of Debt Securities, or shares of Preferred Stock or
Common Stock in a Public Offering, then the Company shall in each case give
written notice, not later than the date of the initial filing of a registration
statement related to such Public Offering, of such proposed Public Offering to
the Holders of Warrants and Warrant Shares and such notice shall offer to the
Holders the opportunity to include in such Public Offering such number of
Warrant Shares as such Holders may request. Within 20 days after receipt of
such notice, the Holders of Warrants and Warrant Shares (the "Requesting
Holders") shall, subject to the following sentence, have the right by notifying
the Company in writing to require the Company to include in the registration
statement relating to such Public Offering such number of Warrant Shares as such
Holder may request. Notwithstanding the foregoing, if at any time the managing
underwriter or underwriters of such Public Offering (the "Managing Underwriter")
shall advise the Company in writing (and shall deliver a copy thereof to the
Warrant Agent) that, in its opinion, the total principal amount or number of
shares proposed to be sold exceeds the maximum principal amount or number of
shares which the Managing Underwriter believes may be sold without materially
adversely affecting the price, timing or distribution of the Public Offering,
then the Company will be required to include only that principal amount or
number of shares which the Managing Underwriter believes may be sold without
causing such adverse effect in the following order: (i) all the principal
amount or shares that the Company proposes to sell in such Public Offering, (ii)
all the principal amount or shares that are proposed to be sold by any holder of
Debt Securities, Preferred Stock or Common Stock of the Company who is
exercising a demand registration right existing on the Issue Date, if such
Public Offering is being made pursuant to such demand and (iii) principal
amounts or shares of the Requesting Holders and all other shares that are
proposed to be sold by any holder of Debt Securities, Preferred Stock or Common
Stock of the Company on a pro rata basis in an aggregate number which is equal
to the difference between the maximum principal amount or number of shares that
may be distributed in such Public Offering as determined by the Managing
Underwriter and the principal amount or number of shares to be sold in such
Public Offering pursuant to clauses (i) and (ii) above. The Company will have
the right to postpone or withdraw any registration statement relating to a
Public Offering
<PAGE>
35
described under this Section 6.01(a) prior to the effective date without
obligation to any Requesting Holder.
(b) In the event that the principal amount or shares of the
Requesting Holders are excluded from a Public Offering as a result of the last
sentence of Section 6.01(a), holders of more than 50% of the Warrant Shares
(whether outstanding or subject to issuance upon exercise of outstanding
Warrants) that have not been sold pursuant to a registration statement may
request the Company to register, on one occasion only, all of their Warrant
Shares (and those of any other holder of Warrant Shares that have not been sold
pursuant to a registration statement) in connection with a firm underwritten
Public Offering. The request by such holders shall specify the approximate
principal amount or number of shares requested to be registered. The Company
shall, at its cost, as promptly as practicable (but in no event more than 45
days after so requested pursuant to this Section 6.01(b)) file with the SEC and
thereafter shall use its best efforts to cause to be declared effective a
registration statement on an appropriate form under the Securities Act. Within
10 days after receipt of any such request, the Company shall give written notice
of such requested registration to all other Holders of Warrants and Warrant
Shares and shall include in such registration all Warrant Shares with respect to
which the Company has received written requests for inclusion therein within 15
business days after the receipt of the Company's notice by the applicable
Holder. The Company may also include in such registration additional principal
amounts or shares proposed to be sold by it or by any other holder of Debt
Securities, Preferred Stock or Common Stock; provided, however, that if the
-------- -------
Managing Underwriter advises the Company in writing that in its opinion the
amount or number of securities requested to be included in such registration
exceeds the amount or number which can be sold in such offering without
adversely affecting the marketability of the offering, the Company shall include
in such registration (i) first, the Warrant Shares, (ii) second, the amount or
shares that the Company proposes to sell, and (iii) third, all other amounts or
shares that are proposed to be sold by any other holders of Debt Securities,
Preferred Stock or Common Stock of the Company on a pro rata basis in an
aggregate number which is equal to the difference between the maximum principal
amount or number of shares that may be distributed in such Public Offering as
determined by the Managing Underwriter and the principal amount or number of
shares to be sold in such Public Offering pursuant to clauses (i) and (iii)
above. All registration expenses (other than underwriting commissions and
discounts payable in respect of shares sold by holders of Warrant Shares)
<PAGE>
36
shall be paid by the Company in the case of any and all registrations governed
by this Section 6.01.
(c) Notwithstanding the provisions of Section 6.01(b), if, while a
registration request is pending pursuant to Section 6.01(b), the Company
determines in the good faith judgment of the Board that the filing of a
registration statement would require the disclosure of material information
which the Company has a bona fide business purpose for preserving as
confidential or the Company is unable to comply with SEC requirements, the
Company shall not be required to commence using its best efforts to effect a
registration pursuant to Section 6.01(b) until the earlier of (i) the date upon
which such material information is disclosed to the public or ceases to be
material or (ii) 60 days after the Company makes such good faith determination.
SECTION 6.02. Preparation and Filing. (a) Whenever the Company is
-----------------------
required to include in a registration statement, or to effect the registration,
of any Warrant Shares pursuant to Section 6.01 or 6.04 in connection with an
offer and sale thereof, the Company will as expeditiously as possible:
(i) prepare and file with the SEC a registration statement with
respect to such Warrant Shares and use its best efforts to cause such
registration statement to promptly become and remain effective for the
period set forth in subsection (ii) below and promptly notify the Holders
of Warrants and Warrant Shares (x) when such registration statement becomes
effective, (y) when any amendment to such registration statement becomes
effective and (z) of any request by the SEC for any amendment or supplement
to such registration statement or any prospectus relating thereto or for
additional information;
(ii) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect to the sale
or other disposition of all securities covered by such registration
statement for a period of not less than 90 days after the effective date of
such registration statement (or such shorter period to the extent necessary
to permit the completion of the sale or distribution of such securities
within such period);
<PAGE>
37
(iii) furnish to such Holders such number of copies of such
registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each
preliminary prospectus), reports on Forms 10-K and 10-Q (or their
equivalents) which the Company shall have filed with the SEC and financial
statements, reports and proxy statements mailed to shareholders of the
Company as such Holders may reasonably request in order to facilitate the
disposition of the Warrant Shares being sold;
(iv) use its best efforts to register or qualify, not later than the
effective date of any filed registration statement, the Warrant Shares
covered by such registration statement under the securities or "blue sky"
laws of such jurisdictions as such Holders reasonably request; provided
--------
that the Company will not be required to (A) qualify to do business as a
foreign corporation or as a dealer in any jurisdiction where it is not so
qualified, (B) subject itself to taxation in any jurisdiction where it is
not subject to taxation, (C) consent to general service of process in any
jurisdiction where it is not subject to general service of process or (D)
take any action that would subject it to service of process in suits other
than those arising out of the offer or sale of the Warrant Shares covered
by the registration statement;
(v) make available, upon reasonable notice and during business
hours, for inspection by the Managing Underwriter or underwriters for the
Warrant Shares (and their counsel) (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents, agreements and
properties of the Company as shall be reasonably necessary to enable them
to exercise their due diligence responsibilities and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any such Inspector in connection with the registration
statement; provided, however, that any such Inspector shall first agree
-------- -------
in writing with the Company that any information that is reasonably and in
good faith designated by the Company in writing as confidential at the time
of delivery of such information shall be kept confidential by such
Inspector, unless (A) disclosure of such information is required by a court
or administrative order or is necessary to respond to inquiries of
regulatory authorities, (B) disclosure of such information is required by
law (including any disclosure requirements pursuant to Federal securities
laws in connection with the filing of a registration
<PAGE>
38
statement or the use of any prospectus referred to in this Agreement), (C)
such information generally becomes available to the public other than as a
result of a disclosure or failure to safeguard any such information by any
Inspector or (D) such information becomes available to any such Inspector
from a source other than the Company or its agents and such source is not
bound by a confidentiality agreement; provided, however, that prior to the
-------- -------
disclosure of such information by such Inspector pursuant to clauses (A) or
(B) above, such Inspector shall provide the Company with prompt written
notice of such proposed disclosure to permit the Company to seek an
appropriate protective order preventing such disclosure, but it is
understood that the Inspector may comply with the requirements of law.
(vi) obtain a comfort letter from the Company's independent public
accountants dated within five business days prior to the effective date of
the registration statement (and as of such other dates as the Managing
Underwriter or underwriters for the Warrant Shares may reasonably request)
in customary form and covering such matters of the type customarily covered
by such comfort letters as such Managing Underwriter or underwriters
reasonably request;
(vii) obtain an opinion of counsel dated the effective date of the
registration statement (and as of such other dates as the Managing
Underwriter or underwriters for the Warrant Shares may reasonably
request) in customary form and covering such matters of the type
customarily covered by such opinions as counsel designated by such
Managing Underwriter or underwriters reasonably request;
(viii) during the period when the registration statement is required
to be effective, notify such Holders of the happening of any event as a
result of which the prospectus included in the registration statement
contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will forthwith prepare a
supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Warrant Shares, such prospectus will not contain
an 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;
<PAGE>
39
(ix) in the case of an underwritten offering, enter into an
underwriting agreement containing customary terms, including such indemnity
and contribution provisions as the managing underwriter or underwriters
customarily require or may reasonably require;
(x) cause such Warrant Shares to be traded on each securities
exchange on which similar securities issued by the Company are then traded,
provided that the Company is eligible to do so under applicable listing
requirements; and
(xi) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
(b) The Holders participating in such offering shall timely furnish
to the Company such information regarding the distribution of such Warrant
Shares as the Company may from time to time reasonably request.
(c) The Holders agree that upon the receipt of any notice from the
Company of the happening of any event of the kind described in paragraph
(a)(viii) above, they will forthwith discontinue, and cause any underwriter
acting on their behalf to agree to discontinue the disposition of Warrant Shares
pursuant to the registration statement covering such Warrant Shares until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (a)(viii) above.
SECTION 6.03. Indemnification. (a) In connection with any
----------------
registration statement contemplated by this Agreement, the Company agrees to
indemnify and hold harmless each Holder of Warrants or Warrant Shares covered
thereby, the directors, officers and employees of each such Holder and each
person who controls any such Holder within the meaning of either the Securities
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other Federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement as originally filed or in any amendment
thereof,
<PAGE>
40
or in any preliminary prospectus or prospectuses contained therein, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that (i) the Company will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any such Holder or the underwriter specifically
for inclusion therein, and (ii) the Company will not be liable to any
indemnified party under these provisions with respect to any registration
statement or prospectus to the extent that any such loss, claim, damage or
liability of such indemnified party results from the use of the prospectus
during a period when the use of the prospectus has been suspended in accordance
with Section 6.02(a)(viii), hereof; provided, in each case, that such Holders
--------
received prior notice of such suspension. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
The Company also agrees to indemnify or contribute to Losses, as
provided in Section 6.03(d), of any underwriters of Warrant Shares registered
under a registration statement, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Holders of Warrants or Warrant Shares covered by a
registration statement as provided in this Section 6.03(a); provided, however,
-------- -------
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any registration statement or prospectus the
indemnity agreement contained in this Section 6.03(a) shall not inure to the
benefit of any underwriter that sold the Warrant Shares concerned to the Person
asserting any such losses, claims, damages or liabilities, to the extent that
such sale was an initial resale by such underwriter and any such loss, claim,
damage or liability of such underwriter results from the fact that there was not
sent or given to such Person, at or prior to the written confirmation of the
sale of such Warrant Shares to such Person, a copy of the registration statement
or the prospectus or any amendment or supplement thereto (exclusive of any
supplementary material included therein but not attached thereto) if the Company
had previously furnished copies thereof to such underwriter. The
<PAGE>
41
Company also shall, if requested by any Holder of Warrants or Warrant Shares
covered by a registration statement, enter into an underwriting agreement
containing customary terms and conditions, including those related to
indemnification.
(b) Each Holder of Warrants or Warrant Shares covered by a
registration statement severally agrees to indemnify and hold harmless (i) the
Company, (ii) each of its directors, (iii) each of its officers who signs such
registration statement and (iv) each Person who controls the Company within the
meaning of either the Securities Act or the Exchange Act to the same extent as
the foregoing indemnity from the Company to each such Holder, but only with
reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6.03 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 6.03, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying party's expense
to represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
-------- -------
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel (and local counsel) if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
<PAGE>
42
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it or other indemnified parties
which are different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party; provided, however, that the
-------- -------
indemnifying party shall be obligated to pay for only one such separate counsel
for all indemnified parties in each action or related group of actions. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 6.03 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the registration statement which
resulted in such Losses; provided, however, that in no case shall any subsequent
-------- -------
holder of any Warrant Share be responsible, in the aggregate, for any amount in
excess of the dollar amount of the proceeds received by the Holder of any
Warrant Share from the sale of such Holder's Warrant Shares. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the indemnifying party and the indemnified party shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of such indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with the statements or
omissions which resulted
<PAGE>
43
in such Losses as well as any other relevant equitable considerations. Relative
fault shall be determined by reference to whether any alleged untrue statement
or omission relates to information provided by the indemnifying party, on the
one hand, or by the indemnified party, on the other hand. The parties agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6.03, each person who controls a
Holder of Warrants or Warrant Shares covered by a registration statement within
the meaning of either the Securities Act or the Exchange Act and each director,
officer, employee and agent of such Holder shall have the same rights to
contribution as such Holder, and each person who controls the Company within the
meaning of either the Securities Act or the Exchange Act, each officer of the
Company who shall have signed such registration statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 6.03 will remain in full force and
effect, regardless of any investigation made by or on behalf of any holder or
the Company or any of the officers, directors or controlling persons referred to
in this Section 6.03 hereof, and will survive the sale by a Holder of Warrants
or Warrant Shares covered by a registration statement.
SECTION 6.04. Repurchase of Warrants. (a) In the event that a
-----------------------
Public Market does not exist for the Common Stock on the fifth anniversary of
the Issue Date (the "Triggering Date"), the Company will be required, at its
option, to (i) make an offer to purchase (the "Warrant Repurchase") all
outstanding Warrants and Warrant Shares issued by it in cash at the Repurchase
Price no later than 120 days after the Triggering Date or (ii) take all
necessary action at its own expense to cause all the Warrant Shares issued or
issuable by it to be registered with the SEC pursuant to an effective shelf
registration statement under the Securities Act (including the filing and making
available to holders of Warrant Shares and their designees a prospectus meeting
the requirements of Section 10(a)(3) thereunder) and in accordance with
applicable state securities laws no later than 120 days after the Triggering
<PAGE>
44
Date. In connection with such a registration statement, the Company shall comply
with the procedures and conditions specified in Section 6.02 and the
indemnification provisions of Section 6.03 shall apply.
(b) If a Public Offering relating to the Company occurs at any time
between the Triggering Date and 90 days after the expiration date for a Warrant
Repurchase pursuant to the preceding paragraph, the Company will pay to each
Holder of Warrants or Warrant Shares that were purchased in such Warrant
Repurchase an amount in cash equal to the sum of (i) the number of Warrants
purchased by the Company multiplied by the excess, if any, of (A) the value, as
determined pursuant to the terms of such Public Offering (net of applicable
underwriting discounts and placement fees) of the number of Warrant Shares
issuable upon the exercise of one Warrant over (B) the Repurchase Price paid by
the Company for each Warrant in such Warrant Repurchase and (ii) the number of
Warrant Shares purchased by the Company multiplied by the excess, if any, of (A)
the value, determined as aforesaid, of the Warrant Shares over (B) the
Repurchase Price paid by the Company for each Warrant Share in such offer.
(c) Notice of Warrant Repurchase. As promptly as practicable
-----------------------------
following the Triggering Date, in the event the Company elects to effect a
Warrant Repurchase, the Company shall give notice of the terms of the Warrant
Repurchase (a "Repurchase Notice") to each Holder, as of the Triggering Date, of
then outstanding Warrants and Warrant Shares. Each Repurchase Notice: (i)
shall be given by the Company directly to all Holders of the Warrants and
Warrant Shares, with a copy to the Warrant Agent and (ii) shall be given within
five Business Days after the Triggering Date and shall specify (A) the manner in
which Warrants and Warrant Shares may be surrendered to the Warrant Agent for
repurchase by the Company, (B) the Repurchase Price at which the Warrants and
Warrant Shares will be repurchased by the Company, (C) the name of the
independent appraisal firm, if any, whose valuation of the Debt Securities,
Preferred Stock or Common Stock was utilized in connection with determining such
Repurchase Price and (D) that payment of the Repurchase Price will be made by
the Warrant Agent.
(d) Payment for Warrants. (i) To receive payment for any
---------------------
unexercised Warrants and any Warrant Shares pursuant to this Section 6.04, each
Holder thereof shall, except as otherwise provided herein, surrender to the
Warrant Agent the Warrant Certificates evidencing such Holder's Warrants and
certificates evidencing such Holder's Warrant Shares.
<PAGE>
45
(ii) As promptly as practicable following the Triggering Date, the
Company shall deposit with the Warrant Agent funds sufficient to make payment
for all unexercised Warrants and all Warrant Shares. After receipt of such
deposit from the Company, the Warrant Agent shall make payment to each Holder,
by delivering a check in an amount equal to the Repurchase Price for each
Warrant and each Warrant Share surrendered by such Holder in accordance with
this Section 6.04, to such Person or Persons as it may be directed in writing by
any Holder surrendering Warrant Certificates or Warrant Shares, net of any
transfer taxes required to be paid in the event that the check is to be
delivered to a Person other than the Holder. Any funds not used to pay for
Warrants or Warrant Shares within 180 days after the Triggering Date shall be
promptly returned to the Company.
(e) Compliance with Laws. Notwithstanding anything contained in this
---------------------
Section 6.04, if the Company is required to comply with laws or regulations in
connection with making the Warrant Repurchase, such laws or regulations shall
govern the making of such Warrant Repurchase. The Company shall immediately
notify the Warrant Agent in writing if any such laws or regulations shall
require the Company to supplement or amend this Agreement or to modify or amend
the procedures or manner of such repurchase or any other provisions set forth
herein and the Warrant Agent shall not be responsible or liable for making any
such determination, complying with any such laws or regulations or for the
failure of the Company to so notify the Warrant Agent.
SECTION 6.05. Change of Control Equity Offer. (a) If prior to the
-------------------------------
consummation of an Initial Public Offering by the Company or any of its
subsidiaries, a Change of Control occurs pursuant to which a Person (including
such Person's Affiliates and associates), other than a Permitted Holder, becomes
the beneficial owner of more than 70% of the total voting power of the Common
Stock of the Company, and the Company is not eligible to, or elects not to,
effect a Drag Along Purchase (as described in Section 6.06), then the Company
shall make an offer to purchase (the "Change of Control Equity Offer") any and
all of the outstanding Warrants and Warrant Shares at a cash purchase price at
least equal to the fair market value of the Warrants (without any discount for
lack of liquidity, the amount of Warrants offered to be purchased or the fact
that the Warrants represent a minority interest in a private company or a
company under the control of another Person) as determined in good faith by the
Board of Directors of the Company and determined to be fair, from a financial
point of view, to the holders of the Warrants by a nationally
<PAGE>
46
recognized investment banking firm (as set forth in such firm's written fairness
opinion delivered to the holders of the Warrants).
(b) Within 30 days of such Change of Control, the Company shall give
notice of the Change of Control Equity Offer to each holder of Warrants by first
class mail, postage prepaid, which notice shall govern the terms of the Change
of Control Equity Offer and shall (i) set forth the purchase price to be paid
for Warrants tendered in the Change of Control Equity Offer, (ii) include the
full text of the fairness opinion referred to in paragraph (a) above, (iii)
identify the date on which the Change of Control Equity Offer will expire (the
"Change of Control Equity Offer Expiration Date"), which date shall not be less
than 20 business days following the date of commencement of the Change of
Control Equity Offer, which commencement date shall be the date such notice is
mailed to holders of Warrants, (iv) explain the facts and circumstances of the
Change of Control, (v) include a letter of transmittal which identifies where
certificates representing the Warrants tendered pursuant to the Change of
Control Equity Offer are to be delivered, (vi) state that, unless the Company
defaults in the purchase of the Warrants tendered pursuant to the Change of
Control Equity Offer, holders of Warrants so tendered shall have no rights with
respect to the Warrants tendered after the Change of Control Expiration Date and
the only remaining right of such holders with respect thereto is to receive the
purchase price therefor promptly after the Change of Control Equity Offer
Expiration Date and (vii) that holders who surrender Warrant Certificates for
the tender of less than all the Warrants evidenced thereby will be issued new
Warrant Certificates representing the number of unpurchased Warrants evidenced
by such Warrant Certificates.
(c) On the Change of Control Equity Offer Expiration Date, the
Company shall (i) accept for purchase all Warrants tendered pursuant to the
Change of Control Equity Offer, (ii) promptly deliver to tendering holders of
Warrants the purchase price therefor and (iii) issue and mail or deliver to
holders tendering a portion of their Warrants new certificates representing a
number of Warrants equal to the unpurchased portion of the Warrants surrendered.
(d) The Company shall comply with the requirements of the Exchange
Act and other securities laws and regulations to the extent such laws and
regulations are applicable in connection with the Change of Control Equity
Offer. To the extent the provisions of any securities laws or regulations
conflict with this Section 6.05, the Company
<PAGE>
47
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 6.05 by virtue
thereof.
SECTION 6.06. Drag Along Rights. If, prior to the consummation of an
------------------
Initial Public Offering, the Board of Directors of the Company and the holders
of a majority of the capital stock entitled to vote thereon approve a sale of
the Company to a Person other than a Permitted Holder, including a sale of the
Company initiated by the holders of the Class A Convertible 8% Cumulative
Preferred Stock of the Company (the "Class A Holders") pursuant to their
agreements with the Company, then, upon 30 days' written notice, which notice
shall include reasonable details of the proposed sale, including the proposed
time and place of the closing and the consideration to be received by the
Company's shareholders (including the Class A Holders), the Company shall have
the right to require the holders of the Warrants to sell, transfer and deliver
or cause to be sold, transferred and delivered, to such Person, their Warrants
in the same transaction at the closing thereof; provided that the consideration
--------
to be received by all Holders shall be the same (in terms of price per share,
terms, conditions and in all other material respects) as that to be received by
the Company's other shareholders and, in any event, shall be cash and/or
securities registered under the Securities Act and listed on a national
securities exchange or authorized for quotation on The Nasdaq Stock Market,
Inc.; and provided further, that if a Holder of a Warrant has, prior to its
-------- -------
receipt of a notice pursuant to this Section 6.06, entered into a binding
agreement to transfer the Warrants, such Holder shall not be prohibited from
consummating such transfer, notwithstanding anything to the contrary contained
in this Section 6.06. Any purchase of Warrants pursuant to this Section shall
be deemed a "Drag Along Purchase".
ARTICLE VII
Warrant Agent
-------------
SECTION 7.01. Appointment of Warrant Agent. The Company hereby
-----------------------------
appoints the Warrant Agent to act as agent for the Company in accordance with
provisions of this Agreement and the Warrant Agent hereby accepts such
appointment. The Warrant Agent shall have the powers and authority granted to
and conferred upon it hereby and such further powers and authority to act on
behalf of the Company as the Company may hereafter grant to or confer upon it.
SECTION 7.02. Rights and Duties of Warrant Agent. (a) Agent for the
----------------------------------- -------------
Company. In acting under this Warrant
- -------
<PAGE>
48
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship or agency or trust for or with any of the Holders of Warrant
Certificates or beneficial owners of Warrants.
(b) Counsel. The Warrant Agent may consult with counsel satisfactory
--------
to it, and the advice of such 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 accordance with the advice of such counsel.
(c) Documents. The Warrant Agent shall be protected and shall incur
----------
no liability for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent, certificate,
affidavit, statement or other paper or document reasonably believed by it to be
genuine and to have been presented or signed by the proper parties.
(d) No Implied Obligations. The Warrant Agent shall be obligated to
-----------------------
perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into
this Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
which may tend to involve it in any expense or liability for which it does not
receive indemnity if such indemnity is reasonably requested. The Warrant Agent
shall not be accountable or under any duty or responsibility for the use by the
Company of any of the Warrant Certificates countersigned by the Warrant Agent
and delivered by it to the Holders or on behalf of the Holders pursuant to this
Agreement or for the application by the Company of the proceeds of the Warrants.
The Warrant Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements contained herein
or in the Warrant Certificates or in the case of the receipt of any written
demand from a Holder with respect to such default, including any duty or
responsibility to initiate or attempt to initiate any proceedings at law or
otherwise.
(e) Not Responsible for Adjustments or Validity of Stock. The
-----------------------------------------------------
Warrant Agent shall not at any time be under any duty or responsibility to any
Holder to determine whether any facts exist that may require an adjustment of
the principal amount of Debt Securities, or the number of shares of Preferred
Stock or Common Stock purchasable upon exercise of each Warrant or the Exercise
Price, or with respect to the nature or extent of any adjustment when made,
<PAGE>
49
or with respect to the method employed, or herein or in any supplemental
agreement provided to be employed, in making the same. The Warrant Agent shall
not be accountable with respect to the validity or value of any Debt Securities,
or of any shares of Preferred Stock or Common Stock or of any securities or
property which may at any time be issued or delivered upon the exercise of any
Warrant or upon any adjustment pursuant to Article V, and it makes no
representation with respect thereto. The Warrant Agent shall not be responsible
for any failure of the Company to make any cash payment or to issue, transfer or
deliver any principal amount of Debt Securities, or any shares of Preferred
Stock or Common Stock or stock certificates upon the surrender of any Warrant
Certificate for the purpose of exercise or upon any adjustment pursuant to
Article V, or to comply with any of the covenants of the Company contained in
Article V.
SECTION 7.03. Individual Rights of Warrant Agent. The Warrant Agent
-----------------------------------
and any stockholder, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants or other securities of the Company or its
affiliates or become pecuniarily interested in transactions in which the Company
or its affiliates may be interested, or contract with or lend money to the
Company or its affiliates or otherwise act as fully and freely as though it were
not the Warrant Agent under this Agreement. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for any other
legal entity.
SECTION 7.04. Warrant Agent's Disclaimer. The Warrant Agent shall
---------------------------
not be responsible for and makes no representation as to the validity or
adequacy of this Agreement or the Warrant Certificates and it shall not be
responsible for any statement in this Agreement or the Warrant Certificates
other than its countersignature thereon.
SECTION 7.05. Compensation and Indemnity. The Company agrees to pay
---------------------------
the Warrant Agent reasonable fees for services hereunder, and to reimburse the
Warrant Agent for its reasonable out-of-pocket expenses as incurred. The
Company shall indemnify the Warrant Agent against any loss, liability or expense
(including reasonable agents' and attorneys' fees and expenses) incurred by it
without negligence or bad faith on its part arising out of or in connection with
the acceptance or performance of its duties under this Agreement. The Warrant
Agent shall notify the Company promptly of any claim for which it may seek
indemnity. The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Warrant Agent through wilful misconduct, gross
negligence or
<PAGE>
50
bad faith. The Company's payment obligations pursuant to this Section 7.05 shall
survive the termination of this Agreement.
SECTION 7.06. Successor Warrant Agent. (a) The Company To Provide
------------------------ ----------------------
Warrant Agent. The Company agrees for the benefit of the Holders that there
- --------------
shall at all times be a Warrant Agent hereunder until all the Warrants have been
exercised or are no longer exercisable.
(b) Resignation and Removal. The Warrant Agent may at any time
------------------------
resign by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall not be less than 60 days after the date
- -------- -------
on which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date when it shall become effective, which date shall not be
less than 60 days after such notice is given unless the Warrant Agent otherwise
agrees. Any removal under this Section 7.06 shall take effect upon the
appointment by the Company as hereinafter provided of a successor Warrant Agent
(which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent.
(c) The Company To Appoint Successor. In case at any time the
---------------------------------
Warrant Agent shall resign, or shall be removed, or shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or shall commence a
voluntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or under any other applicable Federal or state bankruptcy,
insolvency or similar law or shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Warrant Agent or its property or
affairs, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due, or
shall take corporate action in furtherance of any such action, or a decree or
order for relief by a court having jurisdiction in the premises shall have been
entered in respect of the Warrant Agent in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law; or a decree order by a
court having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee,
<PAGE>
51
trustee, sequestrator (or similar official) of the Warrant Agent or of its
property or affairs, or any public officer shall take charge or control of the
Warrant Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up of or liquidation, a successor Warrant Agent, qualified
as aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent. Upon the appointment as aforesaid of a
successor Warrant Agent and acceptance by the successor Warrant Agent of such
appointment, the incumbent Warrant Agent shall cease to be Warrant Agent
hereunder; provided, however, that in the event of the resignation of the
-------- -------
Warrant Agent hereunder, such resignation shall be effective on the earlier of
(i) the date specified in the Warrant Agent's notice of resignation and (ii) the
appointment and acceptance of a successor Warrant Agent hereunder.
(d) Successor To Expressly Assume Duties. Any successor Warrant
-------------------------------------
Agent appointed hereunder shall execute, acknowledge and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder, and thereupon such successor Warrant Agent, without any further act,
deed or conveyance, shall become vested with all the rights and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
(e) Successor by Merger. Any corporation into which the Warrant
--------------------
Agent hereunder may be merged or consolidated, or any corporation resulting
from any merger or consolidation to which the Warrant Agent shall be a party, or
any corporation to which the Warrant Agent shall sell or otherwise transfer all
or substantially all of its corporate trust business; provided that it shall be
--------
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 7.07. Compliance with Applicable Laws. The Warrant Agent
--------------------------------
agrees to comply with all applicable federal and state laws imposing obligations
on it in respect of the services rendered by it under this Agreement and in
connection with the Warrants, including (but not limited to) the provisions of
United States federal income tax laws regarding information reporting and backup
withholding. The Warrant Agent expressly assumes all liability for its failure
to comply with any such laws imposing obligations on
<PAGE>
52
it, including (but not limited to) any liability for its failure to comply with
any applicable provisions of United States federal income tax laws regarding
information reporting and backup withholding.
ARTICLE VIII
Miscellaneous
-------------
SECTION 8.01. Company Resales. The Company hereby agrees with each
----------------
Holder, that the Company shall not resell any Warrants or Warrant Shares it
acquires, by purchase or otherwise, except pursuant to an effective registration
statement.
SECTION 8.02. SEC Reports and Other Information. Notwithstanding that
----------------------------------
the Company may not be subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall, for all periods ending after the
date of this Warrant Agreement, file with the SEC and thereupon provide the
Warrant Agent and Holders with such annual reports and such information,
documents and other reports as are specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections, such
information, documents and other reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections.
SECTION 8.03. Rule 144A. The Company hereby agrees with each Holder,
----------
for so long as any Transfer Restricted Securities remain outstanding and during
any period in which the Company is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to any Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
from such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 8.04. Persons Benefitting. Nothing in this Agreement is
--------------------
intended or shall be construed to confer upon any Person other than the Company,
the Warrant Agent and the Holders any right, remedy or claim under or by reason
of this agreement or any part hereof.
SECTION 8.05. Rights of Holders. Except as expressly contemplated
------------------
herein, Holders of unexercised Warrants are not entitled (i) to receive
dividends or other
<PAGE>
53
distributions (ii) to receive notice of or vote at any meeting of the
stockholders, (iii) to consent to any action of the stockholders, (iv) to
receive notice of any other proceedings of the Company or (v) to exercise any
other rights as stockholders of the Company.
SECTION 8.06. Amendment. This Agreement may be amended by the
---------
parties hereto without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or making any other provisions with respect to matters or
questions arising under this Agreement as the Company and the Warrant Agent may
deem necessary or desirable; provided, however, that such action shall not
-------- -------
affect adversely the rights of the Holders. Any amendment or supplement to this
Agreement that has an adverse effect on the interests of the Holders shall
require the written consent of the Holders of a majority of the then outstanding
Warrants. The consent of each Holder affected shall be required for any
amendment pursuant to which the Exercise Price would be increased or the number
of Warrant Shares purchasable upon exercise of Warrants would be decreased
(other than pursuant to adjustments provided herein). In determining whether
the Holders of the required number of Warrants have concurred in any direction,
waiver or consent, Warrants owned by the Company or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company shall be disregarded and deemed not to be outstanding,
except that, for the purpose of determining whether the Warrant Agent shall be
protected in relying on any such direction, waiver or consent, only Warrants
which the Warrant Agent knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Warrants outstanding at the time shall be
considered in any such determination.
SECTION 8.07. Notices. Any notice or communication shall be in
--------
writing and delivered by hand or overnight courier service, mailed by certified
or registered mail or sent by telecopy, as follows:
if to the Company:
ChiRex Inc.
300 Atlantic Street, Suite 402
Stamford, CT 06901
Attention: Beth P. Hecht, Esq.
Telecopy: (203) 425-9996
<PAGE>
54
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Kris F. Heinzelman, Esq.
Telecopy: (212) 474-3700
if to the Warrant Agent:
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 8.07 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 8.07.
The Company or the Warrant Agent by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to the
Holder at the Holder's address as it appears in the Certificate Register and
shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 8.08. Governing Law. The laws of the State of New York shall
--------------
govern this Agreement and the Warrant Certificates without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.
SECTION 8.09. Successors. All agreements of the Company in this
-----------
Agreement and the Warrant Certificates shall bind its successors. All
agreements of the Warrant Agent in this Agreement shall bind its successors.
<PAGE>
55
SECTION 8.10. Multiple Originals. The parties may sign any number of
-------------------
copies of this Agreement. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Agreement.
SECTION 8.11. Table of Contents. The table of contents and headings
------------------
of the Articles and Sections of this Agreement have been inserted for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.
SECTION 8.12. Severability. The provisions of this Agreement are
-------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
SECTION 8.13. Merger, Consolidation, Sale, Transfer or Conveyance.
----------------------------------------------------
The Company may consolidate or merge with or into any other corporation or sell,
lease, transfer or convey all or substantially all of its assets to any other
corporation; provided that (i) either (x) the Company is the continuing
corporation or (y) the corporation (if other than the Company) that is formed by
or results from any such consolidation or merger or that receives such assets is
a corporation organized and existing under the laws of the United States of
America or a state thereof and such corporation assumes the obligations of the
Company with respect to the performance and observance of all of the covenants
and conditions of this Agreement to be performed or observed by the Company and
(ii) the Company or such successor corporation, as the case may be, must not
immediately be in default under this Agreement. If at any time there shall be
any consolidation or merger or any sale, lease, transfer, conveyance or other
disposition of all or substantially all of the assets of the Company, the
successor or assuming corporation shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein and in the Warrant
Certificates as the Company; the Company shall thereupon be relieved of any
further obligation hereunder or under the Warrants, and, in the event of any
such sale, lease, transfer, conveyance (other than by way of lease) or other
disposition, the Company as the predecessor corporation may thereupon or at any
time thereafter be dissolved, wound up or liquidated.
<PAGE>
56
Such successor or assuming corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of the Company, Warrant Certificates
evidencing the Warrants not theretofore exercised, in exchange and substitution
for the Warrant Certificates theretofore issued. Such Warrant Certificates shall
in all respects have the same legal rank and benefit under this Agreement as the
Warrant Certificates evidencing the Warrants theretofore issued in accordance
with the terms of this Agreement as though such new Warrant Certificates had
been issued at the date of the execution hereof. In case of any such merger or
consolidation or sale, lease, transfer, coveyance or other disposition or all or
substantially all of the assets of the Company, such changes in phraseology and
form (but not in substance) may be made in the new Warrant Certificates, as may
be appropriate.
SECTION 8.14. Notices and Demands to the Company and Warrant Agent.
-----------------------------------------------------
If the Warrant Agent shall receive any notice or demand addressed to the Company
by the holder of a Warrant, the Warrant Agent shall promptly forward such notice
or demand to the Company.
SECTION 8.15. Delivery of Prospectus. The Company shall furnish to
-----------------------
the Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of Warrants and complying in all material
respects with the Securities Act of 1933, as amended (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant by the holder
thereof, the Warrant Agent shall deliver a Prospectus to such holder, prior to
or concurrently with the delivery of the Warrant Securities issued upon such
exercise.
SECTION 8.16. Obtaining of Governmental Approvals. The Company shall
------------------------------------
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals which may be necessary to
obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities acts filings under United
States Federal and state laws, which may be or become necessary or appropriate
in connection with the issuance, sale, transfer and delivery of the Warrants,
the exercise of the Warrants, the issuance, sale, transfer and delivery of the
Warrant Securities to be issued upon exercise of Warrants or upon the expiration
of the period during which the Warrants are exercisable.
<PAGE>
57
SECTION 8.17. Payment of Taxes. The Company will pay all stamp and
-----------------
other duties, if any, to which, under the laws of the United States of America,
this Agreement or the original issuance of the Warrants may be subject.
SECTION 8.18. Benefits of Warrant Agreement. Nothing in this
------------------------------
Agreement or the Warrant Certificates expressed or implied and nothing that may
be inferred from any of the provisions hereof or thereof is intended, or shall
be construed, to confer upon, or give to, any person or corporation other than
the holders of the Warrants any right, remedy or claim under or by reason of
this Agreement or the Warrants or of any covenant, condition, stipulation,
promise or agreement hereof or thereof; and all covenants, conditions,
stipulations, promises and agreements contained in this Agreement or the Warrant
Certificates shall be for the sole and exclusive benefit of the Company and the
Warrant Agent and their respective successors and assigns and of the holders of
the Warrants.
SECTION 8.19. Board of Director Action; No Liability of Directors,
-----------------------------------------------------
Officers, Employees or Shareholders. (a) Any determination that may be made by
- ------------------------------------
a duly authorized committee of the Board or, to the extent permitted by
applicable corporate law, by an individual acting pursuant to authority granted
by the Board of Directors.
(b) No director, officer, employee or shareholder of the Company, as
such, shall have any liability under this Agreement or the Warrants. By
accepting the Warrants, each holder of Warrants agrees to the foregoing and
waives and releases all such liability.
SECTION 8.20. Warrant Holders Not Shareholders. Nothing contained in
---------------------------------
this Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the holders thereof, as such, the right to vote or receive
dividends or notices as shareholders of the Company in respect of any meeting of
shareholders for the election of directors of the Company or any other matter to
vote at any such meeting, to exercise any rights whatsoever as shareholders of
the Company or to be deemed for any purpose the holder of Shares or of any other
securities of the Company that may at any time be issuable on the exercise or
conversion of the Warrant Certificates, nor shall anything contained herein or
in the Warrant Certificates be construed to confer upon the holders thereof, as
such, any of the other rights of a shareholder of the Company.
<PAGE>
58
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
CHIREX INC.,
by
_______________________________
Name:
Title:
, as Warrant
Agent,
by _______________________________
Name:
Title:
<PAGE>
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY AND ANY SECURITY INTO WHICH SUCH SECURITY IS EXCHANGEABLE MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) WITHIN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (iv) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (v) TO THE COMPANY, IN EACH
OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
No. [ ] Certificate for ______ Warrants
WARRANTS TO PURCHASE
DEBT SECURITIES, PREFERRED STOCK OR COMMON STOCK OF
CHIREX INC.
THIS CERTIFIES THAT, [ ], or its registered
assigns, is the registered holder of the number of Warrants set forth above (the
"Warrants"). Each Warrant entitles the holder thereof (the "Holder"), at its
option and subject to the provisions contained herein and in the Warrant
Agreement referred to below, to purchase from ChiRex Inc., a Delaware
corporation ("the Company"), a principal amount of $ ______ of Debt Securities,
at the price of $_____ (the "Debt Securities Exercise Price"), ______ shares of
Preferred Stock, $.01 par value, of the Company (the "Preferred Stock") at the
per share exercise price of $ ______ (the "Preferred Stock Exercise Price"), or
_____ shares of Voting Common Stock, $.01 par value, of the Company (the "Common
Stock") at the per share exercise price of $___ (the "Common Stock Exercise
Price," collectively referred to, along with the Debt Securities Exercise Price
and Preferred Stock Exercise Price, as the "Exercise Price"). This Warrant
Certificate shall terminate and become void as of the close of business on
_______________ (the "Expiration Date") or upon the exercise hereof as to all
the Debt Securities or shares of Preferred Stock or Common Stock subject hereto.
The principal amount of Debt Securities and the number of shares of Preferred
Stock or Common Stock purchasable upon exercise of the Warrants and the Exercise
Price per share shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
<PAGE>
2
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of ____________ (the "Warrant Agreement"), between
the Company and ____________ (the "Warrant Agent", which term includes any
successor Warrant Agent under the Warrant Agreement), and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the Holder of this Warrant Certificate consents by acceptance
hereof. The Warrant Agreement is hereby incorporated herein by reference and
made a part hereof. Reference is hereby made to the Warrant Agreement for a
full statement of the respective rights, limitations of rights, duties and
obligations of the Company, the Warrant Agent and the Holders of the Warrants.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Warrant Agreement. A copy of the Warrant Agreement may be
obtained for inspection by the Holder hereof upon written request to the Warrant
Agent at ___________________. ___________________, attention of ________
(telecopy number: _________).
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part (i) by presentation of this Warrant Certificate
with the Purchase Form attached hereto duly executed and with the simultaneous
payment of the Exercise Price in cash (subject to adjustment) to the Warrant
Agent for the account of the Company at the office of the Warrant Agent or (ii)
by Cashless Exercise. Payment of the Exercise Price shall be made in cash or by
certified or official bank check payable to the order of the Company or by wire
transfer of funds to an account designated by the Company for such purpose.
Payment by Cashless Exercise shall be made by the surrender of one or more
Warrant Certificates (and without payment of the Exercise Price in cash) in
exchange for such principal amount of Debt Securities or number of shares of
Preferred Stock or Common Stock equal to the product of (1) the principal amount
of Debt Securities or the number of shares of Preferred Stock or Common Stock
for which such Warrant is exercisable as of the Exercise Date (if the Exercise
Price were being paid in cash) and (2) a fraction, the numerator of which is the
excess of the Current Market Value of the Debt Securities or per share of
Preferred Stock or Common Stock on the date of exercise over the Exercise Price
of the Debt Securities or per share of the Preferred Stock or Common Stock as of
the date of exercise and the denominator of which is the Current Market Value of
the Debt Securities per share of the Preferred Stock or Common Stock on the date
of exercise.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable at any time or
from time to time on any Business Day on or after the earliest to occur of (i)
the first anniversary of the Issue Date, and (ii)(a) the occurrence of a Change
of Control, (b)(1) 90 days after an Initial Public Offering or (2) upon the
closing of an Initial Public Offering by the Company but only in respect of
Warrants required to be exercised in order to permit the Holder thereof to sell
shares in such Initial Public Offering as permitted under Section ___ of the
Warrant Agreement, (c) a consolidation, merger or purchase of assets involving
the Company or any of its subsidiaries that results in the Debt Securities,
Preferred Stock or Common Stock becoming subject to registration under the
Exchange Act, (d) an Extraordinary Cash Dividend, or (e) the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; provided, however, that no Warrant shall be exercisable after
-------- -------
_________________.
In the event of a Combination, the Holder hereof will be entitled to
receive upon exercise of the Warrants, such principal amount of Debt Securities
or number of shares of Capital Stock or other securities or other property as
the Holder would have received had the
<PAGE>
3
Holder exercised its Warrants immediately prior to such Combination; provided,
--------
however, that in the event that, in connection with such Combination,
- -------
consideration to holders of Debt Securities, Preferred Stock or Common Stock in
exchange for their Debt Securities, Preferred Stock or Common Stock is payable
solely in cash or in the event of the dissolution, liquidation or winding-up of
the Company, the Holder hereof will be entitled to receive such cash
distributions on an equal basis with the holders of Debt Securities, Preferred
Stock or Common Stock or other securities issuable upon exercise of the
Warrants, as if the Warrants had been exercised immediately prior to such
Combination, less the Exercise Price.
The Company may require payment of a sum sufficient to cover any
taxes, assessments or other governmental charges in connection with the transfer
or exchange of the Warrant Certificates pursuant to Section 2.04 of the Warrant
Agreement but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.
Upon any partial exercise of the Warrants, there shall be
countersigned and issued to the Holder hereof a new Warrant Certificate in
respect of the remaining Warrant Shares which shall not have been exercised.
This Warrant Certificate may be exchanged at the office of the Warrant Agent by
presenting this Warrant Certificate properly endorsed with a request to exchange
this Warrant Certificate for other Warrant Certificates evidencing an equal
number of Warrants. The Company is not required to issue fractional Warrant
Shares upon the exercise of Warrants, but the Company may pay an amount in cash
equal to the Current Market Value for one Warrant Share on the trading day
immediately preceding the date the Warrant is presented for exercise, multiplied
by the fraction of a Warrant Share that would be issuable on the exercise of any
Warrant.
All principal amounts of Debt Securities and all shares of Preferred
Stock and Common Stock issuable by the Company upon the exercise of the Warrants
shall, upon such issue, be duly and validly issued and fully paid and
nonassessable.
Prior to the due presentation for registration of transfer of any
Warrant, the Holder in whose name the Warrant Certificate is registered may be
deemed and treated by the Company and the Warrant Agent as the absolute owner of
the Warrant evidenced by such Warrant Certificate for all purposes whatsoever
and neither the Company nor the Warrant Agent shall be affected by notice to the
contrary.
<PAGE>
4
The Warrants do not entitle any Holder hereof to any of the rights of
a shareholder of the Company.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
CHIREX INC.
by
___________________________
Name:
Title:
Attest:
_______________________
Secretary
DATED:
Countersigned:
_____________________________
as Warrant Agent,
by
___________________________
Authorized Signatory
<PAGE>
EXHIBIT B
FORM OF ELECTION TO PURCHASE
WARRANT DEBT SECURITIES, PREFERRED STOCK OR COMMON STOCK
(to be executed only upon exercise of Warrants)
CHIREX INC.
The undersigned hereby irrevocably elects to exercise ________
Warrants to acquire Debt Securities, shares of Preferred Stock, par value $.01,
or shares of Voting Common Stock, par value $.01, of ChiRex Inc., at an exercise
price for the Debt Securities of $_______, an exercise price per share of
Preferred Stock of $____________, and at an exercise price per share of Common
Stock of $___, and otherwise on the terms and conditions specified in the within
Warrant Certificate and the Warrant Agreement therein referred to, surrenders
this Warrant Certificate and all right, title and interest therein to ChiRex
Inc. and directs that the principal amount of Debt Securities and the shares of
Preferred Stock and Common Stock deliverable upon the exercise of such Warrants
be registered or placed in the name and at the address specified below and
delivered thereto.
Date: ________, ___
__________________________/1/
(Signature of Owner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
_______________________________
___________________________
/1/ The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national bank or
trust company or by a member firm of any national securities exchange.
<PAGE>
2
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
A new Warrant Certificate evidencing any unexercised Warrants evidenced by the
within Warrant Certificate is to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
<PAGE>
<TABLE>
<CAPTION>
(all amounts in dollars)
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
NINE MONTHS
ENDED
1993 1994 1995 1996 1997 SEPTEMBER 30, 1998
<S> <C> <C> <C> <C> <C> <C>
Loss from Continuing Operations
before provision for income taxes (2,389) (3,311) (2,452) (6,442) (985) (1,231)
Add:
Interest on indebtedness and
amortization of debt expenses 0 0 0 755 1,052 4,093
------ ------ ------ ------ ----- ------
Loss, as Adjusted (2,389) (3,311) (2,452) (5,687) 67 2,862
------ ------ ------ ------ ----- ------
Fixed Charges:
Interest on indebtedness and
amortization of debt expense 0 0 0 755 1,052 4,093
Capitalized interest 0 0 0 0 150 1,500
------ ------ ------ ------ ----- ------
Total Fixed Charges 0 0 0 755 1,202 5,593
------ ------ ------ ------ ----- ------
Coverage Deficiency N/A N/A N/A 6,442 1,135 2,731
====== ====== ====== ====== ===== ======
</TABLE>
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
ChiRex America Inc.
ChiRex (Holdings) Ltd.
ChiRex (Dudley) Ltd.
ChiRex (Annan) Ltd.
ChiRex Technology Center Inc.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of ChiRex Inc. on Form S-3 to register
$100,000,000 worth of securities of our report dated February 4, 1998 included
in ChiRex Inc.'s Form 10-K for the year ended December 31, 1997 and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
December 10, 1998
Boston, Massachusetts
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
ChiRex Inc. on Form S-3 to register up to $100,000,000 worth of securities of
ChiRex Inc. of our report dated February 9, 1996, on our audit of the
consolidated statements of operations, shareholders' equity and cash flows for
the year ended December 31, 1995, of ChiRex Inc. (formerly SepraChem Inc.),
which report is included in ChiRex Inc.'s 1997 Annual Report on Form 10-K.
We also consent to the reference to our firm in this Form S-3 under the caption
"Experts".
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 10, 1998
<PAGE>
EXHIBIT 25
FORM T-1
==============================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
==================
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) _______
=================
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
NEW YORK 13-3818954
(Jurisdiction of incorporation (I.R.S. employer
if not a U.S. national bank) identification No.)
114 WEST 47TH STREET 10036-1532
NEW YORK, NY (Zip Code)
(Address of principal
executive offices)
==================
CHIREX INC.
(Exact name of obligor as specified in its charter)
DELAWARE 04-3296309
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
300 ATLANTIC STREET, SUITE 402
Stamford, Connecticut 06901
(Address of principal executive offices) (Zip Code)
__________________
DEBT SECURITIES
(Title of the indenture securities)
==============================================
<PAGE>
- 2 -
GENERAL
1. GENERAL INFORMATION
-------------------
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Federal Reserve Bank of New York (2nd District), New York, New York
(Board of Governors of the Federal Reserve System)
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH THE OBLIGOR
-----------------------------
If the obligor is an affiliate of the trustee, describe each such affiliation.
None
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15:
ChiRex Inc. currently is not in default under any of its outstanding
securities for which United States Trust Company of New York is Trustee.
Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15
of Form T-1 are not required under General Instruction B.
16. LIST OF EXHIBITS
----------------
T-1.1 -- Organization Certificate, as amended, issued by the State of
New York Banking Department to transact business as a Trust
Company, is incorporated by reference to Exhibit T-1.1 to Form
T-1 filed on September 15, 1995 with the Commission pursuant
to the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No. 33-97056).
T-1.2 -- Included in Exhibit T-1.1.
T-1.3 -- Included in Exhibit T-1.1.
<PAGE>
- 3 -
16. LIST OF EXHIBITS
----------------
(cont'd)
T-1.4 -- The By-Laws of United States Trust Company of New York, as
amended, is incorporated by reference to Exhibit T-1.4 to Form
T-1 filed on September 15, 1995 with the Commission pursuant
to the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No. 33-97056).
T-1.6 -- The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939, as amended by the Trust Indenture
Reform Act of 1990.
T-1.7 -- A copy of the latest report of condition of the trustee
pursuant to law or the requirements of its supervising or
examining authority.
NOTE
====
As of September 30, 1998, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U.S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States
Trust Company of New York and its parent company, U. S. Trust Corporation.
In answering Item 2 in this statement of eligibility as to matters peculiarly
within the knowledge of the obligor or its directors, the trustee has relied
upon information furnished to it by the obligor and will rely on information to
be furnished by the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.
__________________
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
United States Trust Company of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York, and State of New York, on the 1st day
of December, 1998.
UNITED STATES TRUST COMPANY
OF NEW YORK, Trustee
By: /s/ Gerard F. Ganey
----------------------------
Gerard F. Ganey
Senior Vice President
<PAGE>
Exhibit T-1.6
-------------
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
September 1, 1995
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
---------------------------
By: S/Gerard F. Ganey
Senior Vice President
<PAGE>
EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
September 30, 1998
------------------
($ IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
- ------
<S> <C>
Cash and Due from Banks $ 339,287
Short-Term Investments 161,493
Securities, Available for Sale 563,176
Loans 1,954,456
Less: Allowance for Credit Losses 16,860
----------
Net Loans 1,937,596
Premises and Equipment 58,809
Other Assets 120,308
----------
Total Assets $3,180,669
==========
LIABILITIES
- -----------
Deposits:
Non-Interest Bearing $ 646,593
Interest Bearing 1,838108
----------
Total Deposits 2,484,701
Short-Term Credit Facilities 375,849
Accounts Payable and Accrued Liabilities 142,513
----------
Total Liabilities $3,003,063
==========
STOCKHOLDER'S EQUITY
- --------------------
Common Stock 14,995
Capital Surplus 49,541
Retained Earnings 109,648
Unrealized Gains (Losses) on Securities
Available for Sale (Net of Taxes) 3,422
----------
TOTAL STOCKHOLDER'S EQUITY 177,606
----------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $3,180,669
==========
</TABLE>
I, Richard E. Brinkmann, Managing & Comptroller of the named bank do hereby
declare that this Statement of Condition has been prepared in conformance with
the instructions issued by the appropriate regulatory authority and is true to
the best of my knowledge and belief.
Richard E. Brinkmann, Managing Director & Comptroller
November 2, 1998
