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GLOBAL DEBENTURE
NEITHER THIS DEBENTURE NOR THE SHARES OF COMMON STOCK ISSUABLE ON
CONVERSION OF THIS DEBENTURE (THE "SHARES") HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS DEBENTURE, AGREES FOR
THE BENEFIT OF THE COMPANY THAT THIS DEBENTURE AND THE SHARES MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT AS FOLLOWS.
PRIOR TO THE FIRST ANNIVERSARY OF THE ISSUANCE OF THIS DEBENTURE, THIS
DEBENTURE MAY NOT BE SO TRANSFERRED OTHER THAN (1) TO THE COMPANY, (2) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN
A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S (RULES 901 THROUGH 905)
UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
AFTER THE FIRST ANNIVERSARY AND PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE OF THIS DEBENTURE, THIS DEBENTURE MAY NOT BE SO TRANSFERRED OTHER THAN
(1) TO THE COMPANY, (2) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF
REGULATION S (RULES 901 THROUGH 905) UNDER THE SECURITIES ACT, (3) PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED
BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (4) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.
IF THE HOLDER OF THIS DEBENTURE WAS AN AFFILIATE OF THE COMPANY AT ANY
TIME DURING THE THREE MONTHS PRECEDING THE DATE OF ANY SUCH TRANSFER, THE
FOREGOING CONDITIONS MUST BE COMPLIED WITH REGARDLESS OF WHEN SUCH TRANSFER IS
MADE.
NO HEDGING TRANSACTIONS INVOLVING THIS DEBENTURE OR THE SHARES MAY BE
CONDUCTED, UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE U.S. INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED
IN SECTIONS 165(J) AND 1287(A) OF THE UNITED STATES INTERNAL REVENUE CODE OF
1986, AS AMENDED.
FIBERCHEM, INC.
12% SENIOR CONVERTIBLE DEBENTURES DUE 2002
GLOBAL DEBENTURE
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FiberChem, Inc., a Delaware corporation (hereinafter, the "Issuer,"
which term includes any successor corporation under the Trust Indenture
hereinafter referred to), for value received, hereby promises to pay to bearer
upon presentation and surrender of this Global Debenture (the "Global
Debenture") the principal sum of One Million Three Hundred Fifty Thousand and
No/100 United States Dollars (U.S. $1,350,000) (the "Principal Amount") on July
26, 2002, and, to pay interest thereon from the date hereof, semi-annually in
arrears on December 1 and June 1 in each year, commencing December 1, 2000, at
the rate of 12% per annum, calculated on the basis of a 360-day year consisting
of twelve 30-day months, until the principal hereof is paid or payment thereof
is duly provided for; provided, however, that the Principal Amount payable upon
presentation and surrender may be reduced from time to time in connection with
conversions, redemptions, purchase and cancellations and similar events
described in the Trust Indenture (as defined below), and such reductions shall
be duly noted on Schedule A hereto (which is incorporated herein by this
reference as if set out in full); and provided further that interest accruing
after the date of a reduction in Principal Amount shall be calculated with
reference to the new Principal Amount.
This Global Debenture is one of a duly authorized issue of debentures
designated as the 12% Senior Convertible Debentures Due 2002 (the "Debentures")
of the Issuer issued and to be issued under the Trust Indenture dated as of July
28, 2000 (herein called the "Trust Indenture"), between the Issuer and The Bank
of New York, as Trustee. It is a permanent security and is exchangeable in whole
for definitive Bearer Debentures in bearer form, with interest coupons attached,
upon the events specified in the Trust Indenture.
Until exchanged in full for the definitive Bearer Debentures, this
Global Debenture shall in all respects be ratably entitled to the same benefits
under, and subject to the same Terms and Conditions of, the Trust Indenture as
definitive Bearer Debentures authenticated and delivered thereunder.
This Global Debenture, the definitive bearer Debentures and the Trust
Indenture shall be governed by and construed in accordance with the laws of the
State of New York.
All terms used in this Global Debenture which are defined in the Trust
Indenture shall have the respective meanings assigned to them in the Trust
Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee or on behalf of the Trustee by the Authenticating Agent by manual
signature of one of its authorized signatories, this Global Debenture shall not
be entitled to any benefit under the Trust Indenture and shall not be valid or
obligatory for any purpose.
TERMS AND CONDITIONS OF THE DEBENTURES
1. FORM, DENOMINATION AND TITLE
(A) The Debentures, which will initially be sold only outside the
United States pursuant to Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), will be in the form of a global bearer debenture
without interest coupons (the "Global Debenture"), on deposit
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with The Bank of New York as common depository (the "Common Depository") and
held on behalf of Morgan Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear System ("Euroclear") and Clearstream, societe anonyme
("Clearstream") and credited to accounts designated by the Debentureholders, in
principal amounts of U.S. $1,000 or integral multiples thereof. As provided in
the Trust Indenture, under limited circumstances the Debentures may be issued in
definitive bearer form ("Definitive Bearer Debentures"), serially numbered, in
denominations of U.S. $1,000, $5,000 and $10,000 each with interest coupons
("Coupons") attached on issue.
(B) Title to the Global Debenture will pass by transfer as
described in the Trust Indenture. Title to the Definitive Bearer Debentures and
to the Coupons will pass by delivery. The Company, any Paying Agent and the
Trustee may (to the fullest extent permitted by applicable laws) deem and treat
the holder of any Definitive Bearer Debenture and the holder of any Coupon as
the absolute owner thereof for all purposes (whether or not the Definitive
Bearer Debenture or Coupon shall be overdue and notwithstanding any notice of
ownership or writing on the Definitive Bearer Debenture or Coupon or any notice
of previous loss or theft of the Definitive Bearer Debenture or Coupon).
"Debentureholder" and "Holder" means the bearer of any Definitive Bearer
Debenture or Coupon (as the case may be) or beneficial owner of an interest in
the Global Debenture.
In addition to other legends required by the Securities Act, the
Debentures and any Coupons will bear the following legend: "Any United States
person who holds this obligation will be subject to limitations under the U.S.
income tax laws, including the limitations provided in Sections 165(j) and
1287(a) of the United States Internal Revenue Code of 1986, as amended."
2. STATUS
The Debentures and any Coupons are direct, unconditional and unsecured
obligations of the Company and rank and will rank junior to certain Secured
Senior Indebtedness, PARI PASSU, without any preference among themselves and
with any Designated Indebtedness. The Debentures and any Coupons will rank
senior to all other future Indebtedness of the Company, except to the extent of
Permitted Liens securing Indebtedness. The Debentures will not be secured by any
assets or properties of the Company. "Secured Senior Indebtedness" is limited to
Indebtedness incurred pursuant to that certain Accounts Receivable Purchase
Agreement dated July 7, 2000, with Silicon Valley Financial Services, which
Indebtedness may not at any time exceed $1,000,000. "Designated Senior
Indebtedness", "Permitted Subsidiary Indebtedness" and "Permitted Liens" are
defined in the Trust Indenture.
3. COVENANTS
Some, but not all, of the covenants contained in the Trust Indenture
are as follows:
(A) The Company will not merge or consolidate with or sell, convey
or otherwise dispose of all, or substantially all of its assets substantially as
an entirety to any Person, unless: (i) either (a) the Company shall be the
surviving Person or (b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquired
by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety (1) shall be a Person organised and validly
existing under the laws of the United States of America, any state thereof, or
the District of Columbia and (2) shall expressly assume, by a trust indenture
supplemental thereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the Company's obligation for the due and punctual
payment of the principal of and interest
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on all the Debentures and the performance and observance of every covenant of
the Trust Indenture on the part of the Company to be performed or observed; (ii)
immediately after giving effect to such transaction (and treating any
Indebtedness which becomes an obligation of the Company in connection with or as
a result of such transaction as having been incurred at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing; and (iii) the Company or such Person shall have delivered to the
Trustee an Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture complies with Article Nine of the Trust Indenture and that all
conditions precedent therein provided for relating to such transaction have been
complied with.
(B) Upon any consolidation of the Company with or merger of the
Company with or into any other Person or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 8.01 of the Trust Indenture, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Trust Indenture with the same effect as if such successor Person had been
named as the Company herein and therein, and in the event of any such conveyance
or transfer, the Company, except in the case of a lease, shall be discharged of
all obligations and covenants under the Trust Indenture and the Debentures and
the Company may be dissolved and liquidated.
(C) The Company will not create, incur, assume, guarantee or in
any other manner become directly or indirectly liable for the payment of any
Indebtedness that will rank (i) except for Secured Senior Indebtedness, senior
in right of payment to the Debentures and any Coupons or (ii) except for
Designated Indebtedness, PARI PASSU with the Debentures and Coupons, except to
the extent of Permitted Liens securing Indebtedness. The Company will not permit
any of its Subsidiaries to create, incur, assume, guarantee or in any other
manner become directly or indirectly liable for the payment of any Indebtedness
other than Permitted Subsidiary Indebtedness.
(D) Except for Permitted Liens, the Company will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist, any
Lien of any kind upon any properties of the Company or any of its Subsidiaries
securing any Indebtedness (whether by agreement, by operation of law, or
structurally by virtue of the identity of the obligor), unless the Debentures
are equally and ratably secured or rank senior and prior in all respects to the
Indebtedness secured by such Lien.
4. INTEREST
The Debentures bear interest from (and including) the Issue Date, at
the rate of 12% per annum, payable in cash semi-annually in arrears on December
1 and June 1, in each year (each an "Interest Payment Date"), the first such
payment to be made on December 1, 2000, in respect of the period from (and
including) the Issue Date to (but excluding) December 1, 2000. There will be a
short first coupon for the period from (and including) the Issue Date, to (but
excluding) December 1, 2000, which will equal U.S. $42.00 per U.S. $1,000
principal amount of the Debentures. Payments of interest will equal U.S. $60.00
per U.S. $1,000 principal amount of the Debentures for each subsequent Interest
Payment Date. Interest shall accrue on amounts in default at the Default Rate.
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Each Debenture will cease to bear interest (i) from its due date for
redemption, or (ii) where the Conversion Right shall have been exercised by the
Debentureholders or the Company elects to cause a Mandatory Conversion, from the
Conversion Date, unless as to any of the foregoing upon due presentation,
payment of the principal and interest in respect of the Debenture is improperly
withheld or refused, the Conversion Shares are not timely issued or unless
Default is otherwise made in respect of such payment, in which event interest
shall continue to accrue at the Default Rate as provided in the Trust Indenture.
When interest is required to be calculated in respect of a period of
less than a full year, it shall be calculated on the basis of a 360 day year
consisting of twelve (12) months of thirty (30) days each and, in the case of an
incomplete month, the number of days elapsed.
5. PAYMENTS AND PAYING AGENTS
(A) All payments of principal and interest shall be made in U.S.
dollars. Payment of principal in respect of each Debenture will only be made (i)
in the case of the Global Debenture, to the Principal Paying Agent for
distribution to the Debentureholders in accordance with the terms of the Paying
and Conversion Agreement and the practices of Euroclear and Clearstream, or (ii)
in the case of Definitive Bearer Debentures, against presentation and surrender
(or, in the case of part payment only, endorsement), of the relevant Definitive
Bearer Debenture at the specified office of any of the Paying Agents. Payments
of interest due on the Definitive Bearer Debentures on an Interest Payment Date
will be made against presentation and surrender (or, in the case of part payment
only, endorsement) of the relevant Coupons, at the specified office of any of
the Paying Agents or, in the case of the Global Debenture, to the Principal
Paying Agent for distribution to the Debentureholders in accordance with the
terms of the Paying and Conversion Agreement and the practices of Euroclear and
Clearstream. Payments of additional interest will be made upon presentation of a
Definitive Bearer Debenture to a Paying Agent, which Debenture will be stamped
to reflect such payment, or in the case of the Global Debenture, to the
Principal Paying Agent for distribution to the Debentureholders in accordance
with the terms of the Paying and Conversion Agreement and the practices of
Euroclear and Clearstream. In the case of Definitive Bearer Debentures, all such
payments will be made at the specified office of any Paying Agent, at the option
of the holder, by U.S. dollar cheque, or by transfer to a U.S. dollar account
maintained by the payee outside the U.S. and, in the case of the Global
Debenture, by the Principal Paying Agent for distribution to the
Debentureholders in accordance with the terms of the Paying and Conversion
Agreement and the practices of Euroclear and Clearstream, subject in all cases
to any applicable laws and regulations.
(B) Upon redemption of the Global Debenture, payment shall be made
to the Principal Paying Agent for distribution to the Debentureholders in
accordance with the terms of the Paying and Conversion Agreement and the
practices of Euroclear and Clearstream. Each Definitive Bearer Debenture should
be presented for redemption together (if applicable) with all unmatured Coupons
relating to such Debenture, failing which the full amount of any missing
unmatured Coupon (or, in the case of payment not being made in full, that
portion of the full amount of the missing unmatured Coupons which the amount so
paid bears to the total amount due) will be deducted from the amount due for
payment. Each amount so deducted will be paid in the manner described above
against presentation and surrender (or, in the case of part payment only,
endorsement) of such missing Coupons at any time before the expiration of ten
years after the Relevant Date in respect of the Debenture (whether or not such
Coupon would otherwise have become void pursuant to Condition 10
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(Prescription)), or, if later, five years after the date on which such Coupon
would have become due, but not thereafter.
(C) The Company agrees that so long as any of the Debentures are
outstanding, it will maintain (i) a Paying Agent in a western European city for
payments on the Debentures, (ii) so long as the Debentures are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, a Paying
Agent and Conversion Agent in Luxembourg, (iii) Conversion Agents having
specified offices in either London or New York and (iv) Paying Agents having
specified offices in either London or New York. The Company has initially
appointed The Bank of New York as Trustee, Principal Paying Agent, Principal
Conversion Agent, Replacement Agent and Authenticating Agent, and Banque
Internationale A Luxembourg, as Paying Agent and Conversion Agent. Subject to
the foregoing and the terms of the Paying and Conversion Agreement and the Trust
Indenture, the Company shall have the right to terminate any such appointments
and/or to appoint any other agents in such other places as it may deem
appropriate upon notice in accordance with Condition 15 (Notices).
All monies paid by the Company to the Principal Paying Agent for the
payment of principal or interest on any Debenture which remain unclaimed at the
end of two (2) years after the principal on such Debenture will have become due
and payable will be repaid to the Company (and upon such repayment, the
obligations of the Principal Paying Agent shall cease) and the Holder of such
Debenture or any Coupon appertaining thereto will thereafter have only the
rights of a creditor of the Company as described in the Trust Indenture or such
rights as may be otherwise provided by applicable law.
A Holder shall be entitled to present a Definitive Bearer Debenture or
Coupon for payment only on a Presentation Date.
"Presentation Date" means the date on which a Definitive Bearer
Debenture is presented by a Debentureholder for payment of principal or a Coupon
is presented by the Couponholder for payment of interest, as the case may be, or
if such date is not a Business Day, the next date which is a Business Day.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is a day on which banking institutions in Luxembourg, the city of
New York, New York, and London, England are not authorised or obligated by law,
regulation or executive order to close.
When making payments to Debentureholders or Couponholders, fractions of
one cent will be rounded down to the nearest whole cent.
6. CONVERSION
(A) CONVERSION PERIOD, CONVERSION RATIO AND PRICE
(i) Debentureholders have the right, subject as provided herein
and to any applicable laws and regulations, to require the Company to convert
all or any of their Debentures at their principal amount into shares (the
"Conversion Shares") of common stock of the Company, U.S. $.0001 par value per
share ("Common Stock") at any time during the Conversion Period referred to
below. Upon conversion, the right of the converting Debentureholder to repayment
of the principal
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amount of the Debenture to be converted shall be extinguished and released, and
in consideration and in exchange therefor the Company shall allot and issue
Conversion Shares credited as paid up in full as provided in this Condition 6.
Subject to and upon compliance with the provisions of these Conditions, the
Conversion Right attaching to any Debenture may be exercised, at any time after
the Issue Date up to the close of business on the day two Business Days prior to
the Maturity Date (but in no event thereafter) or, if such Debenture shall have
been called for redemption pursuant to Condition 7(A) on the date up to and
including two (2) Business Days prior to the date fixed for redemption thereof
(the "Conversion Period").
The number of Conversion Shares to be issued on conversion of a
Debenture will be determined by dividing the principal amount of the Debenture
to be converted by the Conversion Price (as defined below) in effect on the
Conversion Date, with the result being rounded down to the nearest whole number.
In addition, upon the conversion of any Debentures, a Debentureholder will also
be entitled to receive an additional number of Conversion Shares calculated in
accordance with Condition 6 (G).
(ii) If more than one Debenture is converted at any one time by the
same Holder, the number of Conversion Shares to be issued upon such conversion
will be calculated on the basis of the aggregate principal amount of the
Debentures to be converted. Fractions of Conversion Shares will not be issued on
conversion and no cash adjustments will be made in respect thereof.
(iii) The price at which Conversion Shares will be issued upon
conversion (the "Conversion Price") will initially be the lesser of (i) U.S.
$0.30 per Conversion Share or (ii) the Adjusted Market Price, but such
Conversion Price will be subject to adjustment in the manner provided in
Conditions 6(C) and 6(F). The "Adjusted Market Price" shall equal 92% of the
average of the Market Price of the Common Stock for the 20 consecutive Stock
Exchange Business Days ending two Stock Exchange Business Days prior to the
Conversion Date. "Market Price" shall be the closing bid price on the OTC for
the Common Stock on the relevant Stock Exchange Business Day; provided, however,
if the Common Stock is traded on an Alternative Stock Exchange then the "Market
Price" shall be the closing bid price of the Common Stock on such Alternative
Stock Exchange on any Stock Exchange Business Day. Notice of any adjustment of
the Conversion Price shall be given in accordance with Condition 15 within ten
(10) Business Days of such adjustment.
(iv) Notwithstanding the provisions of paragraph (i) of this
Condition 6(A), if the Company shall default in making payment in full in
respect of any Debenture which shall have been called for redemption prior to
the Maturity Date, then from the Redemption Date, interest shall continue to
accrue on such Debenture at the Default Rate and the Conversion Right attaching
to such Debenture will continue to be exercisable up to, and including the close
of business (at the place where the Debenture is deposited in connection with
the exercise of the Conversion Right) on the date upon which the full amount of
the monies payable in respect of such Debenture has been duly received by the
Trustee or the Principal Paying Agent.
(v) A Conversion Right may only be exercised in respect of an
Authorised Denomination.
(B) PROCEDURE FOR CONVERSION
(i) To exercise the Conversion Right attaching to any Definitive
Bearer Debenture, the
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Holder thereof must complete, execute and deposit at his own expense during
normal business hours at the specified office of the Principal Conversion Agent
or any of the other Conversion Agents, a notice of conversion (a "Conversion
Notice") in the form for the time being currently obtainable from the office of
each Conversion Agent specified in the Agency Agreement, together with the
relevant Definitive Bearer Debenture and any amount to be paid by the
Debentureholder pursuant to this Condition 6(B)(i). The holder of a beneficial
interest in the Global Debenture need only provide a Conversion Notice and
arrange for the delivery to a Conversion Agent of the beneficial interest being
converted as provided in clause (ii) below. Such Conversion Notice shall be in
the form attached to the Indenture and shall be provided by any Conversion Agent
upon request.
The Conversion Date must fall at a time when the Conversion Right
attaching to that Debenture is expressed in these Conditions to be exercisable
and will be deemed to be the date of the surrender of the Definitive Bearer
Debenture (if applicable) and/or the delivery of such Conversion Notice and, if
applicable, any payment to be made or indemnity given under these Conditions in
connection with the exercise of such Conversion Right. A Conversion Notice once
delivered shall be irrevocable.
Upon any conversion of a Debenture into Conversion Shares, the Company
shall pay any taxes and capital, stamp, issue and registration duties arising on
conversion and duties payable in the U.S. or, if applicable, in the place of any
Alternative Stock Exchange, as the case may be, and the Debentureholder
delivering a Debenture for conversion must pay any taxes and capital, stamp,
issue and registration duties arising on conversion and duties payable to an
entity located outside the U.S. or in the place of any Alternative Stock
Exchange outside the U.S. The foregoing shall not apply to taxes in connection
with any transfer of ownership of a Debenture.
"Alternative Stock Exchange" means, other than OTC, any national or
regional stock exchange or quotation service such as the Nasdaq National Market
System or any similar quotation service, as may be agreed between the Company
and the Lead Manager. Any Alternative Stock Exchange selected must be recognised
by the Luxembourg Exchange otherwise the Debentures may be delisted from the
Luxembourg Exchange.
(ii) As soon as practicable, and in any event not later than three
(3) Stock Exchange Business Days after either the Company's receipt of a
completed Conversion Notice or, if conversion is occurring as a result of a
mandatory conversion, the Conversion Date, the Company will cause the person or
persons designated for that purpose in the Conversion Notice or otherwise to be
registered as holder(s) of the relevant number of Conversion Shares, which will
include any Conversion Shares issued in accordance with Condition 6(G), and will
make a certificate or certificates for the relevant Conversion Shares available
for collection at the Company's principal office which is currently in Las
Vegas, Nevada or at the Company's transfer agent in Denver, Colorado, or, if so
requested in the relevant Conversion Notice, will deliver such certificate or
certificates to the person at the place specified in the Conversion Notice, at
the risk of the Debentureholder, together with any other securities, property or
cash required to be delivered upon conversion and such assignments and other
documents (if any) as may be required by law to effect the transfer thereof. If
the Company fails to timely satisfy its obligations as provided in this
Condition 6(B)(ii), then within two Stock Exchange Business Days after the
expiration of such 3 day period, the Company shall pay to the Debentureholder(s)
entitled to Conversion Shares a cash payment equal to 1% of the principal amount
of Debentures being converted. An additional 1% cash payment will be paid for
each additional three (3) day period commencing after the expiration of the
relevant 3 day period during which the
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Company has not complied with its obligations as provided in this condition
6(B)(ii).
(iii) The person or persons specified for that purpose will be
deemed for all purposes to be the holder of record of the number of Conversion
Shares issuable upon conversion with effect from the Conversion Date. The
Conversion Shares issued upon conversion of the Debentures will in all respects
rank pari passu with the issued and outstanding shares of Common Stock issued on
the relevant Conversion Date except for any right excluded by mandatory
provisions of applicable law. A holder of Conversion Shares issued on conversion
of Debentures shall not be entitled to any shareholder rights for any record
date which precedes the relevant Conversion Date.
(iv) Subject to Condition 4, all accrued and unpaid interest due
upon the conversion of the Debentures (whether as a result of an election by the
Debentureholder, or the Company pursuant to its right to cause Mandatory
Conversion) shall be paid to or on behalf of the Debentureholder by the Company
not later than fourteen (14) calendar days after the relevant Conversion Date by
a U.S. dollar cheque, or by transfer to a U.S. dollar account maintained by the
payee in accordance with instructions given by the relevant Debentureholder.
(v) The Conversion Shares shall be traded on the OTC but shall not
be listed on the Luxembourg Stock Exchange.
(C) ADJUSTMENTS IN CONVERSION PRICE
As provided in the Trust Indenture, the Conversion Price is subject to
adjustment upon the occurrence of certain events, including: (i) stock dividends
and certain other distributions; (ii) the subdivision, combination or
reclassification of outstanding shares of Common Stock; (iii) the issuance to
all stockholders of the Company of rights or warrants to acquire shares of
Common Stock at a price less than the Market Price for the Common Stock; (iv)
the issuance of Common Stock at a price less than the Market Price, other than
issuances pursuant to conversion of the Debentures, any issuances pursuant to
the conversion of issued and outstanding preferred stock (including conversions
related to FiberChem's outstanding preferred stock even if the conversion ratio
of such stock is increased from 10 to 1 to 75 to 1), and the conversion or
exercise of all other currently outstanding options, warrants, or outstanding
indebtedness of the Company, or any warrants issued pursuant to the Offering or
in connection with any plan adopted by the Company for the purchase of stock in
connection with any employee compensation or benefit plan of the Company or any
of its Subsidiaries, whether now in effect or hereafter created or amended; and
(v) the distribution to all holders of Common Stock or debt securities of the
Company or of assets or rights or warrants to purchase securities of the Company
(excluding those rights and warrants referred to above and cash dividends or
distributions from current or retained earnings). The Company may at any time or
from time to time reduce the Conversion Price temporarily or permanently as to
all or any Debentures outstanding. The Company shall cause written notice of any
adjustment to the Conversion Price of all the Debentures pursuant to this
Condition 6(C) to be given to the Trustee, the Paying Agents, the Conversion
Agents and the Holders of the Debentures in accordance with Section 1.08 of the
Trust Indenture, and will publish such notice in two (2) Authorised Newspapers,
one of which is required to be a general leading daily newspaper in Luxembourg,
which is expected to be the LUXEMBURGER WORT. The Company will notify the
Luxembourg Stock Exchange upon any adjustment to the Conversion Price of all the
Debentures.
No adjustment will be made where such adjustment would be less than
five percent (5%) of
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the Conversion Price then in effect. Any adjustment not so made will be carried
forward and taken into account in any subsequent adjustment. On any adjustment,
the resultant Conversion Price, if not an integral multiple of one cent shall be
rounded up to the nearest one cent.
The Conversion Price may not be reduced so that, on conversion of
Debentures, Conversion Shares would be issued for an amount less than their
current par value.
Where more than one event which gives or may give rise to an adjustment
to the Conversion Price occurs within such a short period of time that in the
reasonable opinion of the Company's Board of Directors the foregoing provisions
would need to be operated subject to some modification in order to give the
intended result, such modification shall be made to the operation of the
foregoing provisions as may be advised by the Board of Directors to be in their
reasonable opinion appropriate in order to give such intended result.
(D) CONSOLIDATION, AMALGAMATION OR MERGER
In the case of any consolidation, amalgamation or merger of the Company
with any other Person (other than a consolidation, amalgamation or merger in
which the Company is the continuing Person), or in the case of any sale or
transfer of all, or substantially all, of the assets of the Company, the Company
will forthwith notify the Luxembourg Stock Exchange in accordance with its
applicable requirements and the Debentureholders of such event in accordance
with Section 1.08 of the Trust Indenture and (so far as legally possible) cause
the Person resulting from such consolidation, amalgamation or merger or the
Person which shall have acquired such assets, as the case may be, to execute a
trust indenture supplemental to the Trust Indenture to ensure that the Holder of
each outstanding Debenture will have the right (during the period in which such
Debenture shall be convertible) to convert such Debenture into the class and
amount of shares of Common Stock and other securities and property receivable
upon such consolidation, amalgamation, merger, sale or transfer by a Holder of
the number of shares of Common Stock which would have become liable to be issued
upon conversion of such Debenture immediately prior to such consolidation,
amalgamation, merger, sale or transfer. Such supplemental trust indenture will
provide for adjustments which will be as nearly equivalent as may be practicable
to the adjustments provided for in the foregoing provisions of this Condition.
The above provisions of this Condition 6(D) will apply in the same way to any
subsequent consolidations, amalgamations, mergers, sales or transfers.
(E) MANDATORY CONVERSION
At any time after the Company has complied with its registration
obligations as provided for in the Registration Rights Agreement, provided the
average Market Price of the Common Stock during any twenty (20) consecutive
trading day period and on the date the conversion notice is sent is equal to or
greater than $0.42, the Company may at its option elect within thirty (30) days
of having satisfied the foregoing criteria, to cause the Debentures to be
converted, in whole but not in part, into Conversion Shares at the then
applicable Conversion Price. The Debentureholders shall be notified of such
election by being given not less than twenty (20) calendar days' notice to the
Debentureholders in accordance with Section 1.08 of the Trust Indenture (which
notice shall be irrevocable) by publication in two (2) Authorised Newspapers,
one of which is required to be a general leading daily newspaper in Luxembourg,
which is expected to be the LUXEMBURGER WORT. Upon any such mandatory
conversion, payment will be made by the Company for all interest accrued prior
to the Conversion Date. The Company shall notify the Luxembourg Stock Exchange
of any such mandatory conversion and confirm that all such Debentures have been
converted.
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(F) REGISTRATION RIGHTS
(i) Pursuant to the Registration Rights Agreement (the
"Registration Rights Agreement") dated as of July 28, 2000, by and among the
Company and the Trustee for the benefit of the Debentureholders, the Company has
agreed to file a registration statement with the U.S. Securities and Exchange
Commission (the "Commission") in respect of the resale of the Conversion Shares.
In accordance with the terms and conditions of the Registration Rights
Agreement, the Company will (i) use its best efforts to cause the Commission to
declare effective the registration statement contemplated in the foregoing
sentence within three months of the Issue Date and (ii) use its best efforts to
maintain the effectiveness of such registration statement until all Conversion
Shares that may be issued have been issued. In the event that the Commission
does not declare such registration statement effective within four months of the
Issue Date, holders of the Debentures will be entitled to convert their
Debentures at a discount (the "Registration Default Discount") of 2% from the
then applicable Conversion Price and thereafter, commencing on the fifth month
from the Issue Date, an additional 5% discount for each month or portion thereof
that the registration statement is not declared effective. The Registration
Default Discount shall be permanent and shall not be affected by the subsequent
effectiveness of the registration statement. All discounts under this Condition
6(F) will be in addition to, and not in lieu of, any other discounts or
adjustments applicable to the Conversion Price under the terms of the
Debentures.
(ii) In addition, if prior to the date the Company
satisfies its obligations under the Registration Rights Agreement and for a
period of 60 days after it satisfies such obligations, the Company issues any
Common Stock or Common Stock Equivalents at a price or having a conversion price
less than the then applicable Conversion Price, the applicable Conversion Price
shall be adjusted downward only to equal 95% of the price or conversion price
attributable to the Common Stock or Common Stock Equivalents. To the extent any
issuance of securities causes an adjustment under this Condition 6(F)(ii) and
could also provide for an adjustment under Condition 6(C), the only adjustment
resulting from such issuance shall occur solely under this Condition 6(F)(ii).
(G) Upon the conversion of any Debentures, either upon the
election of the Debentureholder or the Company, the Debentureholders will be
entitled to receive, at no additional cost, an additional number of Conversion
Shares equal to the product of (i) the number of Conversion Shares being issued
to such Debentureholder multiplied by (ii) 0.26. The additional shares issued in
accordance with this Condition 6(G) will be part of the total number of
Conversion Shares to be issued and will be included in the certificate delivered
in accordance with Condition 6(B)(ii) above.
(H) As provided in the Debentures, the Conversion Price is subject
to reduction in a number of different circumstances. The Conversion Price to be
used in connection with the conversion of any Debentures will be calculated on
the applicable date as follows. The initial Conversion Price will first be
calculated using the formula set out in Condition 6(A)(iii). Thereafter, the
Conversion Price shall be adjusted downward to give effect to any reductions as
provided for in Conditions 6(C) and 6(F), with each such reduction given full
effect before the next adjustment is applied. At the request of any
Debentureholder or the Lead Manager, the Company shall promptly provide the
requesting party with a calculation of the current applicable Conversion Price.
Such calculation shall be sent to the requesting Debentureholder by means of a
certificate signed by the Company's Chief Financial Officer setting forth the
adjusted Conversion Price and showing in
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<PAGE>
reasonable detail the facts upon which such adjustment is based.
7. REDEMPTION AND PURCHASE
(A) Unless previously redeemed, converted or purchased and
canceled as provided herein, the Company will redeem the Debentures at their
principal amount on July 26, 2002; PROVIDED, HOWEVER, that at any time on giving
notice in accordance with Condition 15 and the procedures set out in the Trust
Indenture, the Company may redeem all of the Debentures outstanding at such time
at their principal amount, together with interest accrued to the Redemption
Date, in the event that prior to the date of such notice, Conversion Rights
shall have been exercised and/or purchases (and corresponding cancellations)
have been effected in respect of eighty-five percent (85%) or more in principal
amount of the Debentures. The Company shall notify the Luxembourg Stock Exchange
upon any such redemption.
(B) Subject to applicable law, the Company or any of its
Subsidiaries may at any time purchase Debentures together, in the case of
Definitive Bearer Debentures, with unmatured Coupons in any manner and at any
price in the open market or by private treaty. If purchases are made by tender,
tenders must be available to all Debentureholders alike. Debentures purchased by
the Company or any of its Subsidiaries will forthwith be surrendered for
cancellation and shall no longer be deemed Outstanding.
(C) All Debentures that are redeemed by the Company will forthwith
be canceled (together with all related unmatured Coupons attached to or
surrendered with the Debentures) and may not be reissued or resold.
8. TAXATION
All payments in respect of the Debentures by the Company shall be made
without withholding or deduction for, or on account of, any present or future
taxes, duties, assessments or governmental charges of whatever nature ("Taxes")
imposed or levied by or on behalf of the U.S. or any political sub-division of,
or any authority in, or of, the U.S. having power to tax, unless the withholding
or deduction of the Taxes is required by law. In that event, the Company will
pay such additional amounts as may be necessary in order that the net amounts
received by the Debentureholders and Couponholders after the withholding or
deduction shall equal the respective amounts which would have been receivable in
respect of the Debentures or, as the case may be, Coupons in the absence of the
withholding or deduction; except that no additional amounts shall be payable in
relation to any payment in respect of any Debenture or Coupon:
(A) to, or to a third party on behalf of, a Holder who is liable
for the Taxes in respect of the Debenture or Coupon by reason of such Holder
having some connection with the U.S. other than the mere holding of the
Debenture or Coupon or the receipt of payments made in connection therewith; or
(B) presented for payment more than thirty (30) calendar days
after the Relevant Date except to the extent that a Holder would have been
entitled to additional amounts on presenting the same for payment on the last
day of such period of thirty (30) calendar days.
Any reference in these Terms and Conditions to any amounts in respect
of the Debentures
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<PAGE>
shall be deemed also to refer to any additional amounts which may be payable
under this Condition or under any undertakings given in addition to, or in
substitution for, this Condition pursuant to the Trust Indenture.
9. ADDITIONAL COVENANTS
While any Conversion Right remains exercisable, the Company will, save
with the consent of the Holders as contemplated pursuant to Condition 16 or with
the approval of the Trustee where, in its opinion, it is not materially
prejudicial to the interests of the Debentureholders to give such approval:
(A) at all times keep available for issuance free from any
pre-emptive rights out of its authorised but unissued capital such number of
Conversion Shares as would enable the Conversion Rights, the rights for
additional shares as set forth in Condition 6(G), and all other rights of
subscription and exchange for and conversion into Conversion Shares to be
satisfied in full;
(B) maintain a quotation for all the issued Conversion Shares on
OTC, it being understood that if the Company is unable to obtain or maintain
such quotation of Conversion Shares, to obtain and maintain a listing or
quotation for all the Conversion Shares issued on the exercise of the Conversion
Rights on such Alternative Stock Exchange as the Company may from time to time
with the written consent of the Lead Manager determine and will forthwith give
notice to the Debentureholders in accordance with Section 1.08 of the Trust
Indenture of the listing, de-listing or quotation or lack of quotation of the
Conversion Shares (as a class) by any such Alternative Stock Exchange;
(C) use all reasonable efforts to maintain a listing of the
Debentures on the Luxembourg Stock Exchange or an Alternative Stock Exchange;
and
(D) not adopt any amendment to its Certificate of Incorporation
that would modify the rights attaching to the Common Stock.
10. PRESCRIPTION
Debentures and Coupons will become void unless presented for payment
within periods of ten (10) years (in the case of principal) and five (5) years
(in the case of interest) from the Relevant Date in respect of the Debentures or
the Coupons, as the case may be, subject to the provisions of Condition 5.
11. EVENTS OF DEFAULT
The Trustee at its discretion may, and if so requested in writing by
the Holders of at least one-quarter in principal amount of the Debentures then
outstanding or if so directed by an Extraordinary Resolution of the
Debentureholders shall give notice to the Company that the Debentures are, and
they shall accordingly thereby forthwith become, immediately due and payable at
their principal amount together with accrued interest (as provided in the Trust
Indenture) if any of the following events (each an "Event of Default") shall
have occurred (unless (i) such events are expressly permitted or contemplated by
the Trust Indenture or (ii) such Event of Default has been remedied to the
satisfaction of the Trustee):
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<PAGE>
(A) if the Company defaults in the payment of the principal of (or
premium, if any, on) any Debenture as and when it shall become due and payable
at its Maturity, upon redemption, by declaration or otherwise; or
(B) if the Company defaults in the payment of any interest upon
any Debenture, or any related Coupon, when such interest or Coupon becomes due
and payable, and the continuance of such default for a period of 5 days; or
(C) if the Company fails to perform or observe any of its other
obligations, covenants, conditions or provisions under the Debentures or the
Trust Indenture and (except where the Trustee shall have certified to the
Company in writing that it considers such failure to be incapable of remedy in
which case no such notice or continuation as is hereinafter mentioned will be
required) such failure continues for the period of thirty (30) calendar days (or
such longer period as the Trustee may in its absolute discretion permit) next
following the service by the Trustee on the Company of notice requiring the same
to be remedied; or
(D) if (i) any other Indebtedness of the Company or any Subsidiary
becomes due and payable prior to its Stated Maturity by reason of an event of
default (howsoever described) or (ii) any such Indebtedness of the Company or
any Subsidiary is not paid when due or, as the case may be, within any
applicable grace period or (iii) the Company or any Subsidiary fails to pay when
due (or, as the case may be, within any applicable grace period) any amount
payable by it under any present or future guarantee for, or indemnity in respect
of, any Indebtedness of any Person or (iv) any security given by the Company or
any Subsidiary for any Indebtedness of any Person or any guaranty or indemnity
of Indebtedness of any Person by the Company or any Subsidiary becomes
enforceable by reason of default in relation thereto and steps are taken to
enforce such security save in any such case where there is a bona fide dispute
as to whether the relevant Indebtedness or any such guarantee or indemnity as
aforesaid shall be due and payable, provided that in each such case the
Indebtedness exceeds in the aggregate U.S. $250,000 and in each case such event
continues unremedied for a period of thirty (30) calendar days (or such longer
period as the Trustee may in its absolute discretion permit); or
(E) if the Company or any Subsidiary shall generally fail to pay
its debts as such debts become due (except debts which the Company or such
Subsidiary, as the case may be, may contest in good faith generally) or shall be
declared or adjudicated by a competent court to be insolvent or bankrupt,
consents to the entry of an order of relief against it in an involuntary
bankruptcy case, shall enter into any assignment or other similar arrangement
for the benefit of its creditors or consents to the appointment of a custodian
(including, without limitation, a receiver, liquidator or trustee); or
(F) if a receiver, administrative receiver, administrator or other
similar official shall be appointed in relation to the Company or any Subsidiary
or in relation to the whole or a substantial part of the undertaking or assets
of any of them or a distress, execution or other process shall be levied or
enforced upon or sued out against, or an encumbrancer shall take possession of,
the whole or a substantial part of the assets of any of them and in any of the
foregoing cases is not paid out or discharged within ninety (90) calendar days
(or such longer period as the Trustee may in its absolute discretion consent to
in writing upon receipt of written notice from the Company); or
(G) if the Company or any Subsidiary institutes proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or
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<PAGE>
answer or consent seeking reorganisation under the laws of the Federal
Bankruptcy Code or any similar applicable U.S. federal, state or foreign law, or
shall consent to the filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee (or other similar
official) in bankruptcy or insolvency of it or its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they come due; or
(H) if a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company or any Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition seeking the
reorganisation of the Company or any Subsidiary under the Federal Bankruptcy
Code or any other similar applicable U.S. federal, state or foreign law, and
such decree or order shall have continued undischarged or unstayed for a period
of ninety (90) calendar days; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver or liquidator or
trustee or assignee (or other similar official) in bankruptcy or insolvency of
the Company or any Subsidiary or of all or substantially all of its property, or
for the winding up or liquidation of its affairs, shall have been entered, and
such decree or order shall have continued undischarged and unstayed for a period
of ninety (90) calendar days; or
(I) if a warranty, representation or other statement made by or on
behalf of the Company contained in the Trust Indenture, the Debentures or any
certificate or other agreement furnished in compliance with such documents is
false in any material respect when made and (except where the Trustee shall have
certified to the Company that it considers such falsity to be incapable of
remedy; in which case no such notice or continuation as is hereinafter mentioned
will be required) such falsity continues for a period of thirty (30) calendar
days (or such longer period as the Trustee may in its absolute discretion
permit) next following the service by the Trustee on the Company of notice
requiring the same to be remedied; or
(J) if there is any final judgment or judgments for the payment of
money exceeding in the aggregate U.S.$250,000 outstanding against the Company or
any Subsidiary which has been outstanding for more than sixty (60) calendar days
from the date of its entry and shall not have otherwise been discharged in full
or stayed by appeal, bond or otherwise.
12. ENFORCEMENT
The Trustee may at any time, at its discretion and with prior written
notice to the Company take such proceedings against the Company as it may think
fit to enforce the provisions of the Trust Indenture, the Debentures and the
Coupons but it shall not be bound to take any proceedings or any other action in
relation to the Trust Indenture, the Debentures or the Coupons unless (a) it
shall have been so directed by an Extraordinary Resolution of the
Debentureholders or so requested in writing by the Holders of at least
one-quarter in principal amount of the outstanding Debentures, and (b) it shall
have been indemnified to its satisfaction. No Debentureholder or Couponholder
shall be entitled to proceed directly against the Company unless the Trustee,
having become bound so to proceed, fails so to do within a reasonable period and
such failure shall be continuing.
13. SUBSTITUTION
The Trustee may, without the consent of the Debentureholders or
Couponholders, agree with the Company to the substitution in place of the
Company (or of any previous substitute under this Condition) as the principal
debtor under the Debentures, the Coupons and the Trust Indenture of any
Subsidiary or holding company (being a corporation holding (directly or
indirectly) at least a majority
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<PAGE>
of Conversion Shares having by the terms thereof ordinary voting power to elect
a majority of the Board of Directors (irrespective of whether or not at the time
stock of any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency)) of the Company or
any Subsidiary of such holding company, subject to (a) the Trustee being
satisfied that the interests of the Debentureholders will not be materially
prejudiced by the substitution and (b) certain other conditions set out in the
Trust Indenture being complied with.
14. REPLACEMENT OF DEBENTURES AND COUPONS
Should any Debenture or Coupon be lost, stolen, mutilated, defaced or
destroyed, it may be replaced at the specified office of the Replacement Agent,
upon payment by the claimant of the expenses incurred in connection with the
replacement and on such terms as to evidence indemnity and security as the
Company and the Trustee may reasonably require. Mutilated or defaced Debentures
or Coupons must be surrendered before replacements will be issued.
15. NOTICES
(A) Notices to all the Debentureholders will be valid if published
in two (2) Authorised Newspapers as provided in Section 1.08 of the Trust
Indenture, one of which must be a newspaper of general circulation in Luxembourg
, for so long as the Debentures are listed on the Luxembourg Stock Exchange
(which is expected to be the LUXEMBURGER WORT) and the other is expected to be
the FINANCIAL TIMES EUROPEAN EDITION. Any notice shall be deemed to have been
given on the date of publication or, if so published more than once, on the date
of the first publication. If publication as provided above is not practicable,
notice will be given in such other manner, and shall be deemed to have been
given on such date, as the Trustee may approve.
(B) Couponholders will be deemed for all purposes to have notice
of the contents of any notice given to the Debentureholders in accordance with
this Condition.
16. MEETINGS OF DEBENTUREHOLDERS, MODIFICATION, WAIVER AND AUTHORISATION
(A) The Trust Indenture contains provisions for convening meetings
of the Debentureholders to consider any matter affecting their interests,
including the modification by Extraordinary Resolution of these Terms and
Conditions or the provisions of the Trust Indenture. The quorum at any meeting,
or at any adjourned such meeting, for passing an Extraordinary Resolution will
be one or more Persons present holding or representing 25% in principal amount
of the Outstanding Debentures, except that for certain of the provisions of the
Terms and Conditions of the Debentures (including Condition 8) and certain of
the provisions of the Trust Indenture, the necessary quorum and vote required
for passing an Extraordinary Resolution will be one or more Persons present
holding or representing not less than the percentage set out in the Trust
Indenture. An Extraordinary Resolution passed at any meeting of the
Debentureholders will be binding on all Debentureholders, whether or not they
are present at the meeting, and on all Couponholders.
(B) As provided in the Trust Indenture, any action required by the
Trust Indenture to be taken at any meeting may be taken without a meeting, if a
consent or consents in writing setting forth the action so taken shall be signed
by the Holders of the required percentage of the principal amount of the
Outstanding Debentures that would be necessary to authorise or take such action
at such meeting.
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(C) The Trust Indenture provides that, without the consent of each
holder of an outstanding Debenture affected thereby, no amendment may, among
other things, (i) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debenture, (ii) reduce the
principal amount or the rate of interest on any Debenture, (iii) impair the
right of any Holder of the Debentures to receive payment of principal of and
interest on such Holder's Debentures on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect to such
Holder's Debentures, (iv) make any change in the amendment provisions that
require each Holder's consent or in the waiver provisions, (v) make any change
in the provisions restricting the ability of the Company to incur Indebtedness
that is senior in right of payment to the Debentures, (vi) make any Debenture
payable in money other than that stated in such Debenture, or (vii) make any
change that adversely affects the rights of any Debentureholder or amends the
terms of the Debentures or the Trust Indenture in a way that would result in the
loss of an exemption from any of the Taxes described under Condition 8 above.
(D) The Trust Indenture also provides that, without the consent of
any Holder of the Debentures, the Company and the Trustee may amend the Trust
Indenture to cure any ambiguity, omission, defect or inconsistency, to provide
for the assumption by a successor corporation of the obligations of the Company
under the Trust Indenture, to add guarantees with respect to the Debentures, to
secure the Debentures, to add to the covenants of the Company for the benefit of
the Holders of the Debentures or to surrender any right or power conferred upon
the Company.
(E) The consent of the Holders of the Debentures is not necessary
to approve the particular form of any proposed amendment, modification or
Supplemental Indenture. It is sufficient if such consent approves the substance
of the proposed amendment, modification or Supplemental Indenture.
(F) After any amendment or Supplemental Indenture to the Trust
Indenture or Debentures becomes effective, the Company will provide the Holders
of the Debentures with a notice describing such amendment or Supplemental
Indenture. A copy of any such amendment or Supplemental Indenture shall also be
delivered to the Luxembourg Stock Exchange. The failure to give such notice to
all Holders of such Debentures, or any defect therein, will not impair or affect
the validity of the amendment or Supplemental Indenture.
(G) Any modification, waiver or authorisation shall be binding on
the Debentureholders and the Couponholders and, unless the Trustee agrees
otherwise, any modification shall be notified by the Company to the
Debentureholders as soon as practicable thereafter in accordance with Condition
15 and Section 1.08 of the Trust Indenture.
17. DEFEASANCE
The Company has the right to cause a legal defeasance or a covenant
defeasance with respect to the Debentures, all as more fully set out in the
Trust Indenture.
18. INDEMNIFICATION OF THE TRUSTEE
The Trust Indenture contains provisions for the indemnification of the
Trustee and for its
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relief from responsibility, including provisions relieving it from taking action
unless indemnified to its satisfaction.
19. GOVERNING LAW
The Trust Indenture, the Agency Agreement, the Debentures and the
Coupons are governed by, and will be construed in accordance with, the laws of
the State of New York.
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IN WITNESS WHEREOF, the Issuer has caused this Global Debenture to be
duly executed in its corporate name by the manual or facsimile signatures of the
undersigned duly authorized officers of the Issuer.
Dated as of July 28, 2000.
FIBERCHEM, INC.
By: __________________
Name: _____________________
Title _____________________
[Corporate Seal]
ATTEST:
By: ___________________
__________ Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Global Debenture is one of the Debentures referred to in the
within mentioned Trust Indenture.
The Bank of New York
as Trustee
By: ____________________________
Authorised Signatory
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<PAGE>
SCHEDULE A
PRINCIPAL AMOUNT OF THIS GLOBAL DEBENTURE
The aggregate principal amount of this Global Debenture is as shown by the
latest entry made by or on behalf of the Principal Paying Agent in the fourth
column below. Reductions in the outstanding principal amount of this Global
Debenture following redemption, conversion into shares of Common Stock, or the
purchase and cancellation of Debentures are entered in the second and third
columns below.
<TABLE>
<CAPTION>
_________________ _________________________ _________________ ____________________________ _________________________________________
NOTATION MADE BY OR
REASON FOR OUTSTANDING ON BEHALF OF THE PRINCIPAL
CHANGE IN THE PRINCIPAL AMOUNT OF PAYING AGENT (OTHER THAN
OUTSTANDING AMOUNT THE GLOBAL IN RESPECT OF THE INITIAL
DATE PRINCIPAL AMOUNT OF SUCH DEBENTURE FOLLOWING PRINCIPAL AMOUNT
OF THIS GLOBAL CHANGE SUCH CHANGE
DEBENTURE(1)
_________________ _________________________ _________________ ____________________________ _________________________________________
<S> <C> <C> <C> <C>
July 28, Not applicable Not $1,350,000 Not applicable
2000 applicable
_________________ _________________________ _________________ ____________________________ _________________________________________
_________________ _________________________ _________________ ____________________________ _________________________________________
_________________ _________________________ _________________ ____________________________ _________________________________________
_________________ _________________________ _________________ ____________________________ _________________________________________
_________________ _________________________ _________________ ____________________________ _________________________________________
_________________ _________________________ _________________ ____________________________ _________________________________________
_________________ _________________________ _________________ ____________________________ _________________________________________
_________________ _________________________ _________________ ____________________________ _________________________________________
</TABLE>
_______________
(1) State whether the reduction or adjustment results from (1)
conversion of interests in the Debenture into shares of Common Stock, (2)
partial redemption of the Debenture, or (3) the purchase and cancellation of
interests in the Debenture.
<PAGE>
SCHEDULE B
INTEREST PAYMENTS IN RESPECT OF THIS GLOBAL DEBENTURE
The following payments of interest in respect of this Global Debenture have
been made:
<TABLE>
<CAPTION>
________________________ ___________________________ ____________________________________ ____________________________________
AMOUNT OF NOTATION MADE BY OR ON
DATE MADE INTEREST DUE AMOUNT OF INTEREST PAID BEHALF OF THE PRINCIPAL
AND PAYABLE PAYING AGENT
________________________ ___________________________ ____________________________________ ____________________________________
<S> <C> <C> <C>
________________________ ___________________________ ____________________________________ ____________________________________
________________________ ___________________________ ____________________________________ ____________________________________
________________________ ___________________________ ____________________________________ ____________________________________
________________________ ___________________________ ____________________________________ ____________________________________
________________________ ___________________________ ____________________________________ ____________________________________
________________________ ___________________________ ____________________________________ ____________________________________
________________________ ___________________________ ____________________________________ ____________________________________
</TABLE>
