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EXHIBIT 4.1
FIBERCHEM, INC.
TRUST INDENTURE
July 28, 2000
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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SECTION 1.01 DEFINITIONS............................................................................1
SECTION 1.02 LEGAL HOLIDAYS.........................................................................9
SECTION 1.03 RULES OF CONSTRUCTION.................................................................10
SECTION 1.04 COMPLIANCE CERTIFICATES AND OPINIONS..................................................10
SECTION 1.05 FORM OF DOCUMENTS DELIVERED TO TRUSTEE................................................11
SECTION 1.06 ACTS OF DEBENTUREHOLDERS..............................................................11
SECTION 1.07 NOTICES, ETC., TO TRUSTEE AND COMPANY.................................................11
SECTION 1.08 NOTICE TO DEBENTUREHOLDERS; WAIVER....................................................12
SECTION 1.09 EFFECT OF HEADINGS AND TABLE OF CONTENTS..............................................12
SECTION 1.10 SUCCESSORS AND ASSIGNS................................................................12
SECTION 1.11 SEPARABILITY CLAUSE...................................................................12
SECTION 1.12 BENEFITS OF INDENTURE.................................................................12
SECTION 1.13 GOVERNING LAW.........................................................................13
ARTICLE II FORMS OF THE DEBENTURES
SECTION 2.01 FORMS GENERALLY.......................................................................13
SECTION 2.02 RESTRICTIVE LEGENDS...................................................................14
ARTICLE III THE DEBENTURES
SECTION 3.01 TERMS.................................................................................15
SECTION 3.02 AUTHORIZED DENOMINATION...............................................................16
SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING........................................16
SECTION 3.04 TEMPORARY DEBENTURES..................................................................17
SECTION 3.05 EXCHANGE..............................................................................17
SECTION 3.06 BOOK-ENTRY PROVISIONS FOR THE GLOBAL DEBENTURE........................................17
SECTION 3.07 SPECIAL TRANSFER PROVISIONS...........................................................18
SECTION 3.08 MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES......................................19
SECTION 3.09 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED........................................19
SECTION 3.10 PERSONS DEEMED OWNERS.................................................................20
SECTION 3.11 CANCELLATION..........................................................................20
SECTION 3.12 COMPUTATION OF INTEREST...............................................................20
SECTION 3.13 ISIN, CUSIP OR OTHER IDENTIFYING NUMBERS..............................................20
SECTION 3.14 PRESCRIPTION..........................................................................20
ARTICLE IV SATISFACTION AND DISCHARGE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE...............................................21
SECTION 4.02 APPLICATION OF TRUST MONEY............................................................21
ARTICLE V EVENTS OF DEFAULT AND REMEDIES
SECTION 5.01 EVENTS OF DEFAULT.....................................................................22
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT....................................23
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.......................24
SECTION 5.04 TRUSTEE MAY FILE PROOFS OF CLAIM......................................................24
SECTION 5.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF DEBENTURES...........................25
SECTION 5.06 APPLICATION OF MONEY COLLECTED........................................................25
SECTION 5.07 LIMITATION ON SUITS...................................................................25
SECTION 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST......................26
SECTION 5.09 RESTORATION OF RIGHTS AND REMEDIES....................................................26
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SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE........................................................26
SECTION 5.11 DELAY OR OMISSION NOT WAIVER..........................................................27
SECTION 5.12 CONTROL BY DEBENTUREHOLDERS...........................................................27
SECTION 5.13 WAIVER OF PAST DEFAULTS...............................................................27
SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS......................................................27
SECTION 5.15 UNDERTAKING FOR COSTS.................................................................27
ARTICLE VI THE TRUSTEE
SECTION 6.01 NOTICE OF DEFAULTS....................................................................28
SECTION 6.02 CERTAIN RIGHTS OF TRUSTEE.............................................................28
SECTION 6.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES........................29
SECTION 6.04 WHO MAY HOLD DEBENTURES...............................................................29
SECTION 6.05 MONEY HELD IN TRUST...................................................................29
SECTION 6.06 COMPENSATION AND REIMBURSEMENT........................................................30
SECTION 6.07 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY...............................................30
SECTION 6.08 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.....................................30
SECTION 6.09 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR................................................31
SECTION 6.10 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...........................32
SECTION 6.11 CERTAIN DUTIES AND RESPONSIBILITIES...................................................32
SECTION 6.12 MEETINGS OF DEBENTUREHOLDERS..........................................................33
SECTION 6.13 AUTHENTICATING AGENTS.................................................................34
ARTICLE VII DEBENTUREHOLDERS' LISTS AND REPORTS BY COMPANY
SECTION 7.01 DISCLOSURE OF NAMES AND ADDRESSES OF DEBENTUREHOLDERS.................................35
SECTION 7.02 REPORTS BY COMPANY....................................................................35
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER, OR LEASE
SECTION 8.01 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS..................................35
SECTION 8.02 SUCCESSOR SUBSTITUTED.................................................................36
ARTICLE IX SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF DEBENTUREHOLDERS...........................36
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS..............................37
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES..................................................37
SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURES.....................................................37
SECTION 9.05 REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES....................................38
SECTION 9.06 NOTICE OF SUPPLEMENTAL INDENTURES.....................................................38
ARTICLE X COVENANTS
SECTION 10.01 PAYMENT OF PRINCIPAL AND INTEREST.....................................................38
SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY.......................................................38
SECTION 10.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST................................................38
SECTION 10.04 CORPORATE EXISTENCE...................................................................39
SECTION 10.05 PAYMENT OF TAXES AND OTHER CLAIMS.....................................................39
SECTION 10.06 MAINTENANCE OF PROPERTIES.............................................................40
SECTION 10.07 INSURANCE.............................................................................40
SECTION 10.08 STATEMENT BY OFFICERS AS TO DEFAULT...................................................40
SECTION 10.09 PROVISION OF FINANCIAL STATEMENTS.....................................................41
SECTION 10.10 LIMITATION ON OTHER INDEBTEDNESS......................................................41
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SECTION 10.11 LIMITATION ON LIENS...................................................................41
SECTION 10.12 CHARTER AMENDMENTS....................................................................41
SECTION 10.13 UNITED STATES WITHHOLDING AND REPORTING REQUIREMENTS..................................41
SECTION 10.14 MAINTENANCE OF LISTINGS FOR DEBENTURES AND SHARES.....................................42
SECTION 10.16 WAIVER OF CERTAIN COVENANTS...........................................................42
ARTICLE XI REDEMPTION OF DEBENTURES
SECTION 11.01 RIGHT OF REDEMPTION...................................................................42
SECTION 11.02 APPLICABILITY OF ARTICLE..............................................................42
SECTION 11.03 ELECTION TO REDEEM; NOTICE TO TRUSTEE.................................................42
SECTION 11.04 NOTICE OF REDEMPTION..................................................................43
SECTION 11.05 DEPOSIT OF REDEMPTION PRICE...........................................................43
SECTION 11.06 DEBENTURES PAYABLE ON REDEMPTION DATE.................................................43
SECTION 11.07 SURRENDER OF DEBENTURES...............................................................44
ARTICLE XII CONVERSION
SECTION 12.01 CONVERSION RIGHT AND CONVERSION PRICE.................................................44
SECTION 12.02 EXERCISE OF CONVERSION RIGHT..........................................................44
SECTION 12.03 CALCULATION OF SHARES ISSUED ON CONVERSION AND FRACTIONS OF SHARES....................45
SECTION 12.04 ADJUSTMENT OF MAXIMUM CONVERSION PRICE................................................45
SECTION 12.05 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.............................................49
SECTION 12.06 NOTICE OF CERTAIN CORPORATE ACTION....................................................49
SECTION 12.07 COMPANY TO RESERVE COMMON STOCK.......................................................50
SECTION 12.08 TAXES ON CONVERSIONS..................................................................50
SECTION 12.09 CANCELLATION OF CONVERTED DEBENTURES..................................................50
SECTION 12.10 PROVISIONS IN CASE OF RECLASSIFICATION CONSOLIDATION, MERGER OR SALE OF
ASSETS................................................................................50
SECTION 12.11 MANDATORY CONVERSION..................................................................51
SECTION 12.12 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS...................................51
ARTICLE XIII DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.01 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE..........................52
SECTION 13.02 LEGAL DEFEASANCE AND DISCHARGE........................................................52
SECTION 13.03 COVENANT DEFEASANCE...................................................................52
SECTION 13.04 CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.................................53
SECTION 13.05 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS........................................................53
SECTION 13.06 REINSTATEMENT.........................................................................54
ARTICLE XIV SENIORITY OF DEBENTURES
SECTION 14.01 SENIORITY OF THE DEBENTURES...........................................................54
ARTICLE XV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 15.01 LIABILITY SOLELY CORPORATE............................................................54
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EXHIBITS
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EXHIBIT A Form of Definitive Bearer Debentures, Coupons, and Trustee's Certificate of Authentication
EXHIBIT B Form of Global Debenture
EXHIBIT C Form of Certificate from the Company's Chief Financial Officer Transmitting
Annual Financial Statements
EXHIBIT D Form of Notice from Debentureholder of Exercise of Conversion Rights
EXHIBIT E Designated Indebtedness
EXHIBIT F Permitted Subsidiary Indebtedness
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TRUST INDENTURE dated as of July 28, 2000 ("Indenture"), between
FiberChem, Inc., a corporation duly organized and existing under the laws of the
State of Delaware ("Company"), and The Bank of New York, a banking corporation
duly organized and existing under the laws of the State of New York, as Trustee
("Trustee").
WHEREAS:
The Company has duly authorized the creation of an issue of up to U.S.
$5,000,000 of 12% Senior Convertible Debentures Due 2002, and the Coupons, if
any, thereto appertaining (collectively, the "Debentures").
To provide for the Debentures, the Company has duly authorized the
execution and delivery of this Indenture.
All things necessary have been done to make the Debentures, when duly
issued and executed by the Company and authenticated and delivered hereunder,
the valid obligations of the Company and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms.
The Trustee has agreed to act as trustee under this Indenture on the
terms and conditions set forth herein.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Debentures as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 DEFINITIONS.
"Act" when used with respect to any Debentureholder, has the meaning
specified in Section 1.06.
"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.
"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 and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Agency Agreement" has the meaning set out in Section 10.02.
"Agent" means RP&C International Inc. and RP&C International Limited.
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"Agent Members" has the meaning specified in Section 3.06.
"Alternative Stock Exchange" means other than OTC, any national or
regional stock exchange or quotation service such as NASDAQ National Market
System or any similar quotation service maintained by the National Quotation
Bureau or any successor thereto agreed between the Company and the Agent.
"Authenticating Agent" means the Person authorized pursuant to Section
6.13 to act on behalf of the Trustee to authenticate the Debentures until a
successor Authenticating Agent shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Authenticating Agent" shall mean
such successor Authenticating Agent. Pursuant to the terms hereof, The Bank of
New York will initially act as the Authenticating Agent for the Debentures.
"Authorized Denomination" means the denominations authorized in Section
3.02.
"Authorized Newspapers" means the LUXEMBOURG WORT of Luxembourg and THE
FINANCIAL TIMES (EUROPEAN EDITION) of London, England. If either such newspaper
shall cease to be published, the Company or the Trustee shall substitute for it
another newspaper in Europe, customarily published at least once a day for at
least five (5) days in each calendar week, of general circulation. If, because
of temporary suspension of publication or general circulation of either such
newspaper or for any other reason, it is impossible or, in the opinion of the
Company or the Trustee, impracticable to make any publication of any Notice
required by this Indenture in the manner herein provided, such publication or
other Notice in lieu thereof which is made by the Company or the Trustee in the
exercise of its reasonable discretion shall constitute a sufficient publication
of such Notice.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and be in full force and effect on the date of such
certification, and delivered to the Trustee. Where any provision hereof refers
to an action to be taken pursuant to a Board Resolution (including establishment
of the Debentures and the forms and terms thereof), such action may be taken by
any committee, officer or employee of the Company authorised to take such action
(generally or in any particular respect) by a Board Resolution.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is a day on which banking institutions in Luxembourg, New York, New
York, and London, England are not authorized or obliged by law, regulation or
executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock whether now outstanding or issued on or after the date of
this Indenture, including, without limitation, all Common Stock and Preferred
Stock.
"Capitalized Lease Obligation" means the amount of the liability under
any capital lease that, in accordance with GAAP, is required to be capitalized
and reflected as a liability on the balance sheet of the relevant Person.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Company, as in effect on the date hereof and as amended or restated from
time to time hereafter.
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"Clearstream" means Clearstream Banking, societe anonyme.
"Commencement Date" has the meaning set out in Section 12.04.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted or, if at any time after the execution of this Indenture
such Commission is not existing, then the body performing similar duties at such
time.
"Common Depository"means the common depository appointed by Morgan
Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System, and Clearstream, which shall initially be The Bank of New
York, including the nominees and successors of any Common Depository.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participation and other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, and includes, without limitation, all
series and classes of such common stock.
"Common Stock Equivalent" means equity or debt securities (other than
Common Stock) of the Company which are convertible into or exercisable for
shares of Common Stock (including, without limitation, shares, units of shares,
preferred stock and other convertible securities) which the Board of Directors
has deemed to have the same value or economic rights as shares of Common Stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its Chief Executive Officer,
its President, or a Vice President and by its Chief Financial Officer, its
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Conversion Agent" means any Person (including the Company acting as
Conversion Agent) authorized by the Company to effect conversions of the
Debentures on behalf of the Company. The Company has initially appointed The
Bank of New York to act as the Principal Conversion Agent, and Banque
Internationale A Luxembourg as a Conversion Agent for the Debentures.
"Conversion Date" means the Business Day on which either (i) the
Conversion Right is exercised by delivery to the Conversion Agent of completed
Conversion Notice and, if applicable, the Debenture surrendered for conversion
or (ii) the date of conversion as specified in the Company's notice of mandatory
conversion delivered in accordance with Condition 6(E).
"Conversion Notice" means the notice from a Debentureholder reflecting
its intention to exercise its Conversion Right, the form of which notice for the
Debentures is set forth in Exhibit D hereto.
"Conversion Period" means any time up to the close of business on July
24, 2002 (but in no event thereafter), or, if the Debentures shall have been
called for redemption pursuant to Article XI, on the date up to and including
two (2) Business Days prior to the date fixed for redemption thereof.
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"Conversion Price" means, on the Issue Date the lesser of (i) the
Maximum Conversion Price or (ii) the Adjusted Market Price, and such Conversion
Price will be subject to adjustment in the manner provided in Conditions 6(C)
and 6(F) of the Debenture.
"Conversion Right" means the right of a Holder of any Debenture to
convert such Debenture into Conversion Shares.
"Conversion Shares" means the Shares into which the Debentures are
convertible including the additional Shares a holder of Debentures is entitled
pursuant to Condition 6(G) of the Debentures.
"Corporate Trust Office" means the corporate trust office of the
Trustee, at which at any particular time its corporate trust business shall be
principally administered, which office at the date of execution of this
Indenture is located at 101 Barclay Street 21st Floor West, New York, NY 10286,
except that with respect to presentation of Debentures for payment upon
redemption, for conversion or exchange, such term shall mean the office or
agency of the Trustee at which, at any particular time, its corporate agency
business shall be principally conducted.
"Corporation" includes corporations, limited liability companies,
limited and general partnerships, associations, joint-stock companies and
business trusts.
"Coupon" means bearer interest Coupons relating to the Definitive
Bearer Debentures and any replacement Coupons issued pursuant to Section 3.08.
"Couponholder" means a Person who is the bearer of any Coupon.
"Covenant Defeasance" has the meaning set out in Section 13.03.
"Current Event" has the meaning set out in Section12.04.
"Debentureholder" means a Person who is the bearer of any Debenture.
"Debentures" has the meaning stated in the recitals of this Indenture
and more particularly means any Debentures 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.
"Default Rate" means a rate of interest of 18% per annum.
"Definitive Bearer Debentures" has the meaning set out in Section 2.01.
"Designated Indebtedness " means (i) Indebtedness currently in
existence and more fully described on Exhibit E attached hereto, (ii)
Indebtedness for which the Company or any of its Subsidiaries are the sole
obligors and obligees, (iii) Indebtedness secured by Permitted Liens and (iv)
other indebtedness permitted pursuant to Exhibit E.
"Distribution Compliance Period" means the one year period commencing
after the Issue Date.
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"Effective Date" means the earlier of (a) the first Business Day
following the date upon which the Commission declares to be effective a
registration statement filed by the Company pursuant to the Securities Act
relating to the Conversion Shares and (b) the first Business Day occurring after
the expiration of the Distribution Compliance Period.
"Euroclear" means the Euroclear System.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Time" has the meaning set out in Section 12.04.
"Extraordinary Resolution" means a resolution passed at a meeting of
the Debentureholders duly convened and held in accordance with Section 6.12
hereof.
"Federal Bankruptcy Code" means the Bankruptcy Act or Title 11 of the
United States Code, as amended from time to time.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, as applied from time to
time by the Company and its Subsidiaries in the preparation of its financial
statements.
"Global Debenture" has the meaning specified in Section 2.01.
"Guaranty" means all obligations of any Person (other than endorsements
in the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or in effect guaranteeing any Indebtedness, dividend or
other obligation, of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including without limitation all obligations
incurred through an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any Property or assets constituting
security therefor, or (ii) to advance or supply funds (1) for the purchase or
payment of such Indebtedness or obligation, or (2) to enable the recipient of
such funds to maintain certain financial conditions (e.g. agreed amount of
working capital) under loan or similar documents, or (iii) to lease Property or
to purchase securities or other Property or services primarily for the purpose
of assuring the owner of such Indebtedness or obligation of the ability of the
primary obligor to make payment of the Indebtedness or obligation, or (iv)
otherwise to assure the owner of the Indebtedness or obligation of the primary
obligor against loss in respect thereof. For the purposes of all computations
made under this Indenture, a Guaranty in respect of any Indebtedness shall be
deemed to be Indebtedness equal to the principal amount and accrued interest of
such Indebtedness which has been guaranteed, and a Guaranty in respect of any
other obligation or liability or any dividend shall be deemed to be Indebtedness
equal to the maximum aggregate amount of such obligation, liability or dividend.
"Holder" means a Person who is a bearer of a Debenture or Coupon, as
the case may be.
"Indebtedness" of any Person means and includes all present and future
obligations of such Person, which shall include, without limitation, all
obligations (i) which in accordance with GAAP shall be classified upon a balance
sheet of such Person as liabilities of such Person, (ii) for borrowed money,
(iii) which have
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been incurred in connection with the acquisition of Property (including, without
limitation, all obligations of such Person evidenced by any debenture, bond,
note, commercial paper or other similar security, but excluding, in any case,
obligations arising from the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection), (iv) secured by any Lien
existing on Property owned by such Person, even though such Person has not
assumed or become liable for the payment of such obligations, (v) created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person, notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of such Property, (vi)
which are Capitalized Lease Obligations, (vii) for all Guaranties, whether or
not reflected in the balance sheet of such Person, (viii) that are rental
obligations under leases for personal property or fixtures and (ix) which are
all reimbursement and other payment obligations (whether contingent, matured or
otherwise) of such Person in respect of any acceptance or documentary credit.
Notwithstanding the foregoing, Indebtedness shall not include (i) accounts
payable incurred in the ordinary course of business, and (ii) Indebtedness
represented by rental or lease obligations for personal property or fixtures not
to exceed $1,500,000 in any period of 12 months for any Person and its
Subsidiaries.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an instalment of
interest on the Debentures.
"Issue Date" means July 28, 2000.
"Legal Defeasance" has the meaning set out in Section 13.02.
"Lien" means any mortgage, charge, pledge, lien, security interest or
encumbrance of any kind whatsoever, including any interest in Property securing
an obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or contract,
and including but not limited to the security interest lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purposes of this Indenture, the Company or its
Subsidiary shall be deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement, financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes.
"Luxembourg Paying Agent and Conversion Agent" means any Person
authorised by the Company to act as the Luxembourg paying and conversion agent
for the Debentures until a successor Luxembourg Paying and Conversion Agent
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Luxembourg Paying and Conversion Agent" shall mean such
successor Luxembourg Paying and Conversion Agent. Pursuant to the terms hereof,
the Company has initially appointed Banque Internationale A Luxembourg as the
Luxembourg Paying and Conversion Agent for the Debentures.
"Mandatory Conversion" means conversion of the Debentures at the option
of the Company pursuant to Section 12.11.
"Mandatory Conversion Date" means the date specified in a notice
published by the Company in accordance with Sections 1.07, 1.08 and 12.11, on
which date the Debentureholders are required to surrender
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their Debentures for conversion.
"Market Price" shall be the closing bid price on the OTC for the Shares
on the relevant Stock Exchange Business Day; provided, however, if the Shares
are 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 and provided further, if the Shares are not
quoted on the OTC or an Alternative Stock Exchange, then the Market Price for
any particular day shall be calculated promptly at the Company's expense by a
reputable investment bank selected upon the mutual agreement of the Company and
the Agent.
"Maturity," when used with respect to any Debenture, means the date on
which the principal of such Debenture becomes due and payable as therein or
herein provided, whether at the Stated Maturity or the Redemption Date and
whether by declaration of acceleration, call for redemption or otherwise.
"Maximum Conversion Price" means U.S. $0.30 per Conversion Share.
"Notice" has the meaning specified in Section 1.07.
"Officers' Certificate" means a certificate signed by the Chairman, its
Chief Executive Officer, the President or a Vice President, and by the Chief
Financial Officer, its Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee. Any one
individual holding the requisite titles may sign and deliver an Officers'
Certificate without cosignature of another individual with a requisite title.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an employee of the Company, and who shall be
reasonably acceptable to the Trustee.
"OTC" means the over-the-counter bulletin board as maintained by the
National Association of Securities Dealers, Inc.
"Other Event" has the meaning set out in Section 12.04.
"Outstanding," when used with respect to Debentures, means, as of the
date of determination, all Debentures theretofore authenticated and delivered
under this Indenture, except: (1) Debentures heretofore cancelled by a Paying
and Conversion Agent or delivered to a Paying and Conversion Agent for
cancellation; (2) Debentures, or portions thereof, 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 Debentures; PROVIDED that, if such Debentures 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; (3)
Debentures, except to the extent provided in Sections 13.02 and 13.03, with
respect to which the Company has effected Legal Defeasance and/or Covenant
Defeasance as provided in Article XIII; and (4) Debentures which have been paid
pursuant to Section 3.08 or in exchange for or in lieu of which other Debentures
have been authenticated and delivered pursuant to this Indenture, other than any
such Debentures in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Debentures are held by a bona fide
purchaser in whose hands the Debentures are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Debentures have taken any
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Act or given or made any Extraordinary Resolution or other request, demand,
authorization, direction, consent, Notice or waiver hereunder, Debentures owned
by the Company or any other obligor upon the Debentures or any Affiliate of the
Company (other than persons whose Affiliate relationship arises solely from the
ownership of Conversion Shares) or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, consent, Notice or waiver, only
Debentures which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Debentures 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
Debentures and that the pledgee is not the Company or any other obligor upon the
Debentures or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of or interest on any
Debentures on behalf of the Company. Pursuant to the terms hereof, the Company
has initially appointed The Bank of New York as the Principal Paying Agent, and
Banque International A Luxembourg as the Luxembourg Paying Agent.
"Permitted Liens" means (a) Liens or deposits made to secure payment of
worker's compensation (or to participate in any fund in connection with worker's
compensation), unemployment insurance, pensions, or social security programs,
(b) Liens imposed by mandatory provisions of law such as for materialmen's
mechanics, warehousemen's and other Liens arising in the ordinary course of the
business of the Company or its Subsidiaries, securing Indebtedness on which
payment is not yet due, (c) Liens for taxes imposed upon the Company's or any of
its Subsidiaries' income, profits or property, if the same are not yet due and
payable or if the same are being contested in good faith and as to which
adequate reserves are maintained in accordance with GAAP, (d) Liens in
connection with leases, real estate bids, or contracts (other than contracts
involving the borrowing of money) or to secure (or in lieu of) surety, stay,
appearance or customs bonds and Liens to secure the payment of taxes,
assessments, customs, duties or other similar charges, (e) Liens consisting of
zoning restrictions, easements or other restrictions on the use of real property
PROVIDED THAT such Liens do not impair the use of such property for the uses
intended, and none of which is violated by existing or proposed structure or
land use, (f) any Lien existing on any property of any person at the time it
becomes a Subsidiary or of a successor to or merged with or into the Company so
long as (i) that Lien does not encumber any other property of any Company or any
Subsidiary and (ii) the aggregate amount of Indebtedness secured by that Lien
never exceeds 100% of the fair market value of that property, (g) Liens on any
personal property or fixtures acquired by the Company or any Subsidiary after
the date of this Indenture and created contemporaneously with the date of that
acquisition to secure Indebtedness incurred in connection with the purchase,
rental or lease of such personal property or fixtures, and (h) any Lien
described in clauses (f) and (g) above resulting from renewing, extending, or
refunding outstanding Indebtedness so long as the principal amount of the
Indebtedness so secured is not increased and that Lien is not extended to any
other property.
"Permitted Subsidiary Indebtedness " means as to a Subsidiary of the
Company, Indebtedness currently in existence and more fully described on Exhibit
F attached hereto.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all
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or a portion of the same debt as that evidenced by such particular Debenture;
and, for the purposes of this definition, any Debenture authenticated and
delivered under Section 3.08 in exchange for or in lieu of a mutilated, lost,
destroyed or stolen Debenture shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Debenture.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participation or other equivalents (however designated) of
such Person's preferred or preference stock whether now outstanding or issued on
or after the date of this Indenture, and includes, without limitation, all
classes and series of preferred or preference stock.
"Presentation Date" means the date on which a 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.
"Principal Paying and Conversion Agent" means any Person authorized by
the Company to act as the principal paying and conversion agent for the
Debentures until a successor Principal Paying and Conversion Agent shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Principal Paying and Conversion Agent" shall mean such successor
Principal Paying and Conversion Agent. Pursuant to the terms hereof, the Company
has initially appointed The Bank of New York as the Principal Paying and
Conversion Agent for the Debentures.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Redemption Date," when used with respect to any Debenture to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price," when used with respect to any Debenture and Coupons
to be redeemed, means the price at which they are to be redeemed pursuant to the
terms hereof, plus accrued interest as provided herein and in the Debenture,
expressed in either a number of Conversion Shares into which such Debenture and
Coupons shall be converted in the event the Debentures and Coupons are to be
redeemed for Shares or, in the event of any other redemption, a cash amount.
"Reference Date" has the meaning set out in Section 12.04.
"Registration Rights Agreement" means that certain Registration Rights
Agreement dated July 28, 2000 executed by the Company for the benefit of the
Debentureholders.
"Regulation S" means Regulation S under the Securities Act as in effect
on the date hereof or as such Regulation may hereafter be amended and deemed
applicable to the Debentures.
"Relevant Date" means the date on which the payment first becomes due;
PROVIDED, that if the full amount of the money payable has not been received by
the Principal Paying Agent or the Trustee on or before the due date, it shall
mean the date on which, the full amount of the money having been so received,
Notice to that effect shall have been duly given to the Debentureholders by the
Company in accordance with Section 1.08.
"Replacement Agent" means The Bank of New York or any successor
thereof.
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"Required Filing Dates" has the meaning specified in Section 10.09.
"Responsible Officer," when used with respect to the Trustee, means any
vice president, any assistant vice president, any assistant treasurer, any trust
officer or assistant trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above-designated officers, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Rule 144" means Rule 144, as amended, promulgated by the Commission
pursuant to the Securities Act.
"Secured Senior Indebtedness " means Indebtedness senior in right of
payment to the Debentures, which Indebtedness is limited to Indebtedness
incurred pursuant to that certain Accounts Receivable Purchase Agreement dated
July 7, 2000, or any extension or renewal thereof, with Silicon Valley Financial
Services, which Indebtedness may not at any time exceed $1,000,000.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated from time to time by the Commission pursuant
thereto.
"Shares" means the common stock, par value U.S.$0.0001, of the Company
(and all other (if any) shares or stock resulting from any sub-division,
consolidation or reclassification of such shares).
"Stated Maturity," when used with respect to any Indebtedness or any
instalment of principal thereof or interest thereon, means the date specified in
such Indebtedness as the fixed date on which the principal of such Indebtedness
or such instalment of principal or interest is due and payable.
"Stock Exchange Business Day" means any day (other than a Saturday or
Sunday) on which OTC is providing quotes or the Alternative Stock Exchange is
open for business.
"Subordinated Obligation" means any Indebtedness of the Company
outstanding on such date which is contractually subordinate or junior in right
of payment to the Debentures. Notwithstanding the immediately preceding
sentence, any Indebtedness and shares of Preferred Stock issued by any
Subsidiary shall, for purposes of this definition, be treated as Subordinated
Obligations.
"Subsidiary" of any Person means any Corporation of which at least a
majority of the shares of stock having by the terms thereof ordinary voting
power to elect a majority of the Board of Directors of such Corporation
(irrespective of whether or not at the time stock of any other class or classes
of such Corporation shall have or might have voting power by reason of the
happening of any contingency) is directly or indirectly owned or controlled by
any one of or any combinations of the Company or one or more of its
Subsidiaries.
"Temporary Conversion Price" has the meaning specified in Section
12.04(j).
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unexercised Debenture" means any Debenture with respect to which
Conversion Rights have not been exercised by the Debentureholder.
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"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely 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, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt, PROVIDED THAT (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"U.S. Person" means any Person who is a "U.S. person" as defined in
Regulation S.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 1.02 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Conversion Date,
Redemption Date or Stated Maturity or Maturity of any Debenture or Coupon shall
not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Debentures or Coupons) payment of interest or principal or
any other payment required to be made on such date need not be made on such
date, but shall be made on the immediately following Business Day with the same
force and effect as if made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity or Maturity.
SECTION 1.03 RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) all the terms defined in this Article have the
meanings assigned to them in this Article, and include the plural as
well as the singular;
(b) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP;
(c) all ratios and computations based on GAAP contained
in this Indenture shall be computed in accordance with the definition
of GAAP set forth above;
(d) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision of this
Indenture;
(e) "or" is not exclusive;
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(f) all references to $, U.S.$, dollars or United States
dollars shall refer to the lawful currency of the United States of
America;
(g) provisions apply to successive events and
transactions;
(h) all references to Sections or Articles refer to
Sections or Articles of this Indenture unless otherwise indicated; and
(i) all references to Terms or Conditions refer to the
Terms and Conditions of the Debentures unless otherwise indicated.
SECTION 1.04 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall, furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) 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, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of each such
individual, such individual has made such examination or investigation
as is necessary to enable such individual to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 1.05 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the
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exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.06 ACTS OF DEBENTUREHOLDERS.
(a) Any Extraordinary Resolution, request, demand,
authorization, direction, declaration, Notice, consent, waiver or other
action provided by this Indenture to be given or taken by
Debentureholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such
Debentureholders in person or by agents duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Debentureholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and
conclusive in favour of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved in any manner which the
Trustee deems sufficient.
(c) Any Extraordinary Resolution, request, demand,
authorization, direction, Notice, consent, waiver or other Act of the
Holders of any Debenture shall bind every future Holder of the same
Debenture and the Holder of every Debenture issued upon conversion or
redemption thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee
or the Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
SECTION 1.07 NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, declaration, notice,
consent, waiver, Extraordinary Resolution or Act of Debentureholders or other
document provided or pertained by this Indenture (herein collectively called
"Notice") to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Debentureholder or by the Company
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee and received at
its 101 Barclay Street 21st Floor West, New York, NY 10286; or
(b) the Company by the Trustee or by any Debentureholder
shall be sufficient for every
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purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing to or with the Company addressed
to it at the address of its principal office which shall initially be:
1181 Grier Drive, Suite B, Las Vegas, Nevada 89119.
Any Notice to be given hereunder by any party to another shall be in
writing and in English (by letter, telex or fax) delivered in person or by
courier service requiring acknowledgement of delivery, mailed by first class
mail, postage prepaid, or sent by fax or telex to the addressee (including
telecopier number, if applicable) set forth herein. Notices to the Trustee given
by mail, fax, personal delivery or courier service shall be effective upon
actual receipt. Notice given by telex shall be effective upon receipt by the
sender of the addressee's answer-back at the end of transmission; PROVIDED, THAT
any such Notice or other communication which would otherwise take effect after
4:00 p.m. on any particular day shall not take effect until 10:00 a.m. on the
immediately succeeding Business Day in the place of the addressee. A party may
change any address to which Notice is to be given to it by giving Notice as
provided above of such change of address.
SECTION 1.08 NOTICE TO DEBENTUREHOLDERS; WAIVER.
Where this Indenture provides for Notice of any event to
Debentureholders by the Company or the Trustee, such Notice shall be
sufficiently given (unless otherwise herein expressly provided) if published in
the Authorized Newspapers. Neither the Trustee nor the Company need give any
Notice to the Couponholders and such Couponholders will be deemed to have notice
of the contents of any Notice given to the Debentureholders in accordance with
this Section.
In case by reason of any cause it shall be impracticable to publish
Notice of any event to the Debentureholders when such Notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such Notice as shall be satisfactory to the Trustee shall constitute a
sufficient notification for every purpose hereunder.
SECTION 1.09 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.10 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.11 SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions, to the extent permitted by law, shall not in any way
be affected or impaired thereby.
SECTION 1.12 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Debentures, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Conversion Agent and their respective successors hereunder, and the
Debentureholders any legal or equitable right, remedy or claim under this
Indenture.
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SECTION 1.13 GOVERNING LAW.
THIS INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
ARTICLE II
FORMS OF THE DEBENTURES
SECTION 2.01 FORMS GENERALLY.
The Debentures and the Trustee's certificate of authentication shall be
in substantially the forms set forth in this Article, except as otherwise
provided by or pursuant to one or more indentures supplemental hereto, 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
may be required by applicable law or rules or regulations thereunder or as may,
consistently herewith, be determined by the officer or officers executing such
Debentures, as evidenced by their execution of the Debentures. Any portion of
the text of any Debenture may be set forth on the reverse thereof.
The definitive Debentures shall be typed, printed, lithographed or
engraved on steel-engraved borders or may be produced in any other manner as
determined by the officers of the Company executing such Debentures, as
evidenced by their execution in accordance with Section 3.03 of such Debentures.
The Debentures shall be known as the "12% Senior Convertible Debentures
Due 2002" of the Company, and such Debentures and the Trustee's certificate of
authentication shall be in substantially the form annexed hereto as Exhibit A.
Each such Debenture shall be dated as of the Issue Date.
The terms and provisions contained in the form of the Definitive Bearer
Debentures annexed hereto as Exhibit A, and in the form of the Global Debenture
annexed hereto as Exhibit B, shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
The Debentures shall be issued in the form of a global bearer debenture
substantially in the form set forth in Exhibit B (the "Global Debenture")
deposited with the Common Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Global Debenture may from time to time be decreased by adjustments
made on the records of the Common Depository or its nominee, as hereinafter
provided.
The Debentures offered and sold, other than as described in the
preceding paragraphs, shall be issued in the form of permanent certificated
Debentures in bearer form in substantially the form set forth in Exhibit A
("Definitive Bearer Debentures") and in an aggregate maximum principal amount
equal to the outstanding aggregate principal amount of the Global Debenture
immediately prior to issue.
The Terms and Conditions contained in the form of the Debentures
annexed hereto as Exhibits A and
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B are expressly incorporated by reference herein. To the extent applicable, the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. To the
extent of any conflict between the Terms and Conditions of the Debentures and
the provisions of this Indenture, the Terms and Conditions shall control the
interpretation of the terms of the Debenture and this Indenture.
SECTION 2.02 RESTRICTIVE LEGENDS.
The Global Debentures and each Definitive Bearer Debenture and Coupon
thereto issued prior to the end of the Distribution Compliance Period
shall bear the following legend on the face thereof:
"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 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
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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."
In the event that Regulation S is amended during the period while any Debenture
or Coupon remains outstanding and the Company determines that the foregoing
restrictive legends are required to be amended as a result thereof or additional
or different procedures are required in connection with the trading of such
securities, the Company shall provide the Trustee with notice pursuant to
Section 1.07 and the Debentureholders pursuant to Section 1.08 of the Indenture
setting forth the revised form of restrictive legends and other procedures that
the Company believes are required and shall provide the Trustee with an Opinion
of Counsel to the effect that such restrictive legends are required to be
amended or that such procedures are required to be adopted and observed. The
form of Definitive Bearer Debenture set forth at Exhibit A, the Global Debenture
set forth at Exhibit B and any Debentures issued shall be deemed to be so
amended effective at the date of such notice to the Trustee.
Until such time as the two-year holding period provided by Rule 144(k)
is satisfied as to Conversion Shares and for any Conversion Shares that may be
issued to affiliates of the Company (as defined in Rule 144), any Conversion
Shares issued by the Company shall bear the following legend on the face
thereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE `SHARES') HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
`SECURITIES ACT'), OR THE SECURITIES LAWS OF ANY STATE. THE HOLDER
HEREOF AGREES FOR THE BENEFIT OF THE COMPANY THAT THE SHARES MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT AS FOLLOWS.
PRIOR TO THE FIRST ANNIVERSARY OF THE ISSUANCE OF THE SHARES, (OR
PREDECESSOR SECURITY HERETO), THE SHARES 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 THE SHARES, (OR PREDECESSOR SECURITY), THE SHARES 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
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STATE OF THE UNITED STATES.
IF THE HOLDER OF THE SHARES 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 THE SHARES MAY BE CONDUCTED, UNLESS
IN COMPLIANCE WITH THE SECURITIES ACT."
ARTICLE III
THE DEBENTURES
SECTION 3.01 TERMS.
The aggregate principal amount of Debentures which may be authenticated
and delivered under this Indenture is limited to $1,350,000 except for
Debentures authenticated and delivered in exchange for, or in lieu of, other
Debentures pursuant to the express terms of this Indenture. The Debentures shall
mature on the Maturity Date and they shall have the rights and shall bear
interest at the rate per annum specified therein from the Issue Date, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, payable in arrears, and thereafter as provided in the Debentures
and at said Stated Maturity, until the principal thereof is paid or duly
provided for.
The principal of and interest on the Debentures shall be payable at the
office or agency of the Company maintained for such purpose in The City of
London, or at such other office or agency of the Company as may be maintained
for such purpose.
The Debentures shall be redeemable as provided in Article XI.
The Debentures shall be convertible as provided in Article XII.
The Debentures shall be senior in right of payment to Subordinated
Obligations and junior in right of payment to the Secured Senior Indebtedness
and Permitted Subsidiary Indebtedness as provided in Article XIV.
SECTION 3.02 AUTHORIZED DENOMINATION.
The Debentures shall be issuable only in bearer form and, in the case
of Definitive Bearer Debentures, serially numbered, with Coupons attached
thereto on issue, and shall be issuable only in denominations of U.S.$1,000,
$5,000 or $10,000.
SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Debentures shall be executed on behalf of the Company by its
Chairman, its Chief Executive Officer, its President or a Vice President under a
facsimile of its corporate seal reproduced thereon and attested by its Secretary
or an Assistant Secretary. The signature of any of these officers on the
Debentures may be
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manual or facsimile signatures of the present or any future such authorized
officer and may be imprinted or otherwise reproduced on the Debentures.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Debentures, and the Trustee or the
Authenticating Agent in accordance with such Company Order shall authenticate
and deliver such Debentures. Such Company Order shall specify the amount of
Debentures to be authenticated and the date on which the original issue of
Debentures is to be authenticated. The aggregate principal amount of Debentures
outstanding at any time may not exceed $5,000,000 except for Debentures
authenticated and delivered in exchange for, or in lieu of, other Debentures
pursuant to Section 3.04, 3.05 or 3.08.
Each Debenture shall be dated as of the Issue Date.
No Debenture shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Debenture a
certificate of authentication substantially in the form provided for in Exhibit
A duly executed by the Trustee or the Authenticating Agent by manual or
facsimile signature of an authorized officer, and such certificate upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture.
In case the Company, pursuant to Article VIII, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article VIII, any of the Debentures authenticated
or delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Debentures executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Debentures surrendered for such
exchange and of like principal amount; and the Trustee or an Authenticating
Agent, upon Company Request of the successor Person, shall authenticate and
deliver Debentures as specified in such request for the purpose of such
exchange.
SECTION 3.04 TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures, the Company may
execute, and upon Company Order the Trustee or an Authenticating Agent shall
authenticate and deliver, temporary Debentures which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in the Authorized Denomination,
substantially of the tenor of the definitive Debentures in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Debentures may determine, as
conclusively evidenced by their execution of such Debentures.
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If temporary Debentures are issued, the Company will cause a definitive
Global Debenture to be prepared without unreasonable delay, but in no event
later than thirty (30) days after the Issue Date. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable, subject
to Section 3.05, for definitive Debentures upon surrender of the temporary
Debentures at the office or agency of the Company designated for such purpose
pursuant to Section 10.02, without charge to the Debentureholder. Upon surrender
for cancellation of any one or more temporary Debentures, the Company shall
execute and the Trustee or an Authenticating Agent shall authenticate and
deliver in exchange therefor a like principal amount of definitive Debentures of
the Authorized Denomination. Until so exchanged, the temporary Debentures shall
in all respects be entitled to the same benefits under this Indenture as
definitive Debentures.
SECTION 3.05 EXCHANGE.
Upon surrender for exchange of any Debenture at the office or agency of
the Company designated pursuant to Section 10.02, the Company shall execute, and
the Trustee or the Authenticating Agent shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Debentures of
the same series in the Authorized Denomination of a like aggregate principal
amount.
Furthermore, any Holder of a beneficial interest in the Global
Debenture shall, by acceptance of a beneficial interest in such Global
Debenture, agree that transfers of such beneficial interest may be effected only
through a book-entry system maintained by the holder of such Global Debenture,
or its agents, and that ownership of a beneficial interest in the Global
Debenture shall be required to be reflected in a book entry.
All Debentures issued upon any exchange of Debentures shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Debentures surrendered upon such
exchange.
Every Debenture presented or surrendered for exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Trustee, duly executed by the
Debentureholder thereof or such Debentureholder's attorney duly authorized in
writing.
No service charge shall be made for any exchange, conversion or
redemption of Debentures, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any exchange of Debentures, other than exchanges pursuant to
Sections 3.03, 3.04, 3.05, 3.06, or 9.05.
The Company shall not be required to register the transfer of or
exchange of any Debenture during a period beginning five days before the date of
Maturity and ending on such date of Maturity.
SECTION 3.06 BOOK-ENTRY PROVISIONS FOR THE GLOBAL DEBENTURE.
(a) The Global Debenture initially shall be delivered to
the Common Depository and shall bear the legends set forth in Section
2.02. Members of, or participants in, Euroclear and Clearstream ("Agent
Members") shall have no rights under this Indenture with respect to any
Global Debenture held on their behalf by the Common Depository, or
under the Global Debenture, and the Common Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as
the absolute owner of such Global Debenture for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other
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authorization furnished by the Common Depository or shall impair, as
between the Common Depository and the Agent Members, the operation of
customary practices governing the exercise of the rights of a
Debentureholder.
(b) Transfers of the Global Debenture shall be limited to
transfers of such Global Debenture in whole, but not in part, to the
Common Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Debenture may be
transferred in accordance with the rules and procedures of the Common
Depository and the provisions of this Section 3.06. Definitive Bearer
Debentures shall be transferred to all beneficial owners in exchange
for their beneficial interests in the Global Debenture only if (i) the
Common Depository notifies the Company that it is unwilling or unable
to continue as Common Depository for such Global Debenture and a
successor depository is not appointed by the Company within 90 days of
such notice, (ii) Euroclear or Clearstream is closed for business for a
continuous period of 14 days (other than by reason of legal holidays)
or announces an intention permanently to cease business, or (iii) an
Event of Default has occurred and is continuing and the Trustee has
received a request from the Common Depository to convert the Global
Debenture into Definitive Bearer Debentures.
(c) In connection with the transfer of the entire Global
Debenture to beneficial owners pursuant to subsection (b) of this
Section, the Global Debenture shall be deemed to be surrendered to the
Trustee for cancellation, and the Company shall execute, and the
Trustee or an Authenticating Agent shall authenticate and deliver, to
each beneficial owner identified by the Common Depository in exchange
for its beneficial interest in the Global Debenture, an equal aggregate
principal amount of Definitive Bearer Debentures of Authorized
Denomination.
(d) Prior to end of the Distribution Compliance Period,
any Definitive Bearer Debenture delivered in exchange for an interest
in the Global Debenture pursuant to subsection (b) of this Section
shall bear the applicable legend regarding transfer restrictions
applicable to the Definitive Bearer Debenture set forth in Section
2.02.
(e) The Holder of the Global Debenture may grant proxies
and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which
a Debentureholder is entitled to take under this Indenture or the
Debentures.
(f) Nothing contained herein shall be deemed to authorize
any transfers (by book-entry or otherwise) of the Global Debenture
otherwise than in accordance with Regulation S and the Securities Act.
Unless otherwise required by applicable law, none of the Company or the
Common Depository shall recognize, cause to be recognized or or give
effect to any attempt to transfer (by book entry or otherwise) or
convert any Debenture or any interest therein in violation of either
Regulation S or the Securities Act.
SECTION 3.07 SPECIAL TRANSFER PROVISIONS.
The Debentureholders by acceptance of an interest in the Debentures
hereby covenant and agree that neither the Debentures nor the Conversion Shares
will be offered, sold, transferred, pledged, converted or otherwise disposed of
in the United States or to, or for the account or benefit of, any U.S. Person
unless the Debentures and/or the Conversion Shares have been registered under
the Securities Act and any applicable state securities or blue sky laws or
exemptions from the registration requirements of such laws are available.
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Each Holder of a Debenture agrees to indemnify the Trustee against any
liability that may result from the transfer, exchange or assignment of such
Holder's Debenture in violation of any provision of this Indenture and/or
applicable United States Federal or state securities law.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Debenture (including any transfers between or among Agent Members or
beneficial owners of interests in any Global Debenture) 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 Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION 3.08 MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES.
If (i) any mutilated Debenture or Coupon is surrendered to the Trustee
or the Replacement Agent, or (ii) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Debenture or
Coupon, and there is delivered to the Company and the Trustee such security
and/or indemnity as may be required by them to save each of them harmless, then,
in the absence of Notice to the Company or the Trustee that such Debenture or
Coupon has been acquired by a bona fide purchaser, the Company shall execute and
upon its receipt of a Company Order, the Trustee or a Replacement Agent shall
authenticate and deliver, in exchange for any such mutilated Debenture or Coupon
or in lieu of any such destroyed, lost or stolen Debenture or Coupon, a new
Debenture or Coupon of like tenor and principal amount, bearing a number not
contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture or
Coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debenture or Coupon, pay such Debenture
or Coupon, as the case may be.
Upon the issuance of any new Debenture or Coupon under this Section,
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 (including the fees and expenses of the Trustee and the Replacement
Agent) connected therewith.
Every new Debenture or Coupon issued pursuant to this Section in lieu
of any destroyed, lost or stolen Debenture or Coupon shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Debenture or Coupon shall be at any time enforceable
by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Debentures or Coupons duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures or Coupons.
Any new Debenture issued under this Section 3.08 in lieu of any
destroyed, lost or stolen Debenture shall be issued by the Replacement Agent
with all matured Coupons as of such date of issuance cancelled or voided.
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SECTION 3.09 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Debenture which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date, shall be paid to the bearer
against presentation and surrender (or in the case of part payment only,
endorsement) of the relevant Coupons (if Definitive Bearer Debentures are in
issue), outside of the United States at the corporate trust office or agency of
any Paying Agent maintained for such purpose pursuant to Section 10.02.
Each such payment will be made at the specified office of any Paying
Agent, at the option of the Holder of such Coupon (if Definitive Bearer
Debentures are in issue), by U.S. dollar check drawn on a bank in New York or by
transfer to a U.S. dollar account maintained by the payee with a bank outside of
the United States subject in all cases to any applicable fiscal or other laws
and regulations.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture in exchange for or in lieu of any other Debenture
shall carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Debenture.
SECTION 3.10 PERSONS DEEMED OWNERS.
Subject to the provision of Section 3.14 and except with respect to any
unmatured Coupon, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person who is the bearer of any Debenture or Coupon as the
owner of such Debenture or Coupon for the purpose of receiving payment of
principal of and (subject to Sections 3.05 and 3.09) interest on such Debenture
and for all other purposes whatsoever, whether or not such Debenture be overdue,
and none of the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.11 CANCELLATION.
All Debentures surrendered for payment, conversion, redemption or
exchange shall, if surrendered to any Paying or Conversion Agent other than the
Trustee, shall be promptly delivered to the Trustee and shall be cancelled by
the Trustee once payment, conversion, redemption or exchange has occurred. The
Company may at any time deliver to the Trustee for cancellation any Debentures
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Debentures
previously authenticated hereunder which the Company has not issued and sold,
and all Debentures so delivered shall be promptly cancelled by the Trustee in
accordance with its customary procedures. If the Company shall so acquire any of
the Debentures, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debentures unless and until
the same are surrendered to the Principal Paying and Conversion Agent for
cancellation. No Debentures shall be authenticated in lieu of or in exchange for
any Debentures cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Debentures held by the Principal
Paying and Conversion Agent shall be disposed of by the Principal Paying and
Conversion Agent in accordance with its customary procedures and certification
of their disposal delivered to the Company unless by Company Order the Company
shall direct that cancelled Debentures be returned to it.
SECTION 3.12 COMPUTATION OF INTEREST.
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Interest on the Debentures shall be computed from the date of issuance
on the basis of a 360-day year of twelve 30-day months and, in the case of an
incomplete month, the number of days elapsed.
SECTION 3.13 ISIN, CUSIP OR OTHER IDENTIFYING NUMBERS.
The Company in issuing the Debentures may use "ISIN", "CUSIP" or other
identifying numbers (if then generally in use), and the Trustee shall use ISIN
CUSIP or other identifying numbers in notices of redemption, conversion or
exchange, and any other notice provided for the benefit of the Debentureholders,
as a convenience to Debentureholders; PROVIDED that any such notice shall state
that no representation is made as to the correctness of such numbers either as
printed on the Debentures or as contained in any Notice of redemption,
conversion or exchange or other notice.
SECTION 3.14 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 Section 11.07.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to surviving rights of conversion or redemption of Debentures herein
expressly provided for and the Company's obligations to the Trustee pursuant to
Section 6.06) and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
when:
(a) either:
(i) all Debentures theretofore authenticated and
delivered (other than (1) Debentures which have been
destroyed, lost, mutilated or stolen and which have been
replaced or paid as provided in Section 3.08 and (2)
Debentures for whose payment money has theretofore been
deposited in trust with the Trustee or any Paying Agent or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 10.03) have been delivered to the Trustee
or a Paying or Conversion Agent for cancellation; or
(ii) all such Debentures not theretofore
delivered to the Trustee for cancellation (1) have become due
and payable, or (2) will become due and payable at their
Stated Maturity, within one year, or (3) are to be called for
redemption within one year under arrangements satisfactory to
the Trustee for the giving of Notice of redemption by the
Trustee in the name, and at the expense, of the Company, and
the Company has irrevocably deposited or caused to be
deposited with the Trustee in trust for such purpose an amount
sufficient to pay and discharge the entire indebtedness on
such Debentures not theretofore delivered to the Trustee for
cancellation, for principal and interest to the date of such
deposit (in the case of Debentures which have become due and
payable) or to the Stated Maturity or Redemption
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Date, as the case may be;
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.06 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
SECTION 4.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Debentures and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the Persons entitled
thereto, of the principal and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.01 EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article XIV or be voluntary or
involuntary or be 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) which shall have occurred and is
continuing:
(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, and continuance
of such default for a period of 5 days; 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 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 this
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
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service by the Trustee on the Company or by the Holders of at least 25% of the
aggregate principal amount of Debentures Outstanding on the Trustee and 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 Guaranty or indemnity as
aforesaid shall be due and payable (following any applicable grace period),
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 sole
discretion consent to in writing upon receipt of written Notice from the
Company); 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 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
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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 this 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.
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 5.1(f) or 5.1(g)) occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures may, and the Trustee upon the request of the Holders of
not less than 25% in principal amount of the Outstanding Debentures shall,
declare the principal amount of all the Debentures to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Debentureholders), and upon any such declaration such principal amount
together with accrued interest (as provided herein) shall become immediately due
and payable.
If an Event of Default specified in Section 5.01(f) or 5.01(g) occurs
and is continuing, then the principal amount of all the Debentures shall IPSO
FACTO become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Debentureholder.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Debentures, by written Notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(a) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(i) all overdue interest on all Outstanding
Debentures,
(ii) all unpaid principal of any Outstanding
Debentures which has become due otherwise than by such
declaration of acceleration, and interest on such unpaid
principal at the rate prescribed therefor in the Debentures,
(iii) to the extent that payment of such interest
is legally enforceable, interest on overdue interest at the
rate prescribed therefor in the Debentures and herein, and
(iv) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
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and
(b) all Events of Default, other than the non-payment of
amounts of principal of or interest on Debentures which have become due
solely by such declaration of acceleration, have been cured or waived
as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any instalment of
interest on any Debenture, or any related Coupon, when such interest or
Coupon becomes due and payable and such default continues for a period
of five (5) days, or
(b) default is made in the payment of the principal of
any Debenture at Maturity, upon redemption, by declaration or otherwise
and such default continues for five (5) days,
then in either such case, the Company will, upon demand of the
Trustee, pay to the Trustee for the benefit of the Holders of such
Debentures, the whole amount then due and payable on such Debentures
for principal and interest, and interest on any overdue principal and,
to the extent that payment of such interest shall be legally
enforceable, upon any overdue instalment of interest, at the rate
prescribed therefor in the Debentures and herein, and, in addition
thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Debentures and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Debentures, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Debentureholders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Debentures or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Debentures
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by
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intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Debentures and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
of the Debentureholders allowed in such judicial proceeding; and
(b) to participate as a member, voting or otherwise, of any
official committee of creditors appointed in such matters; and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Debentureholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any Debentureholder thereof, or to authorize the
Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
SECTION 5.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
DEBENTURES.
All rights of action and claims under this Indenture or the Debentures
may be prosecuted and enforced by the Trustee without the possession of any of
the Debentures or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Debentureholders in respect of which such judgment has
been recovered.
SECTION 5.06 APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
upon presentation of the Debentures and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.06;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Debentures in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Debentures for principal and interest, respectively;
and
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THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.07 LIMITATION ON SUITS.
No Debentureholder shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Debentureholder has previously given written
Notice to the Trustee of a continuing Event of Default, with a copy of
such Notice to the Company;
(b) the Holders of not less than 25% in principal amount
of the Outstanding Debentures shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Debentureholder or Debentureholders have offered
to the Trustee indemnity reasonably satisfactory to it against the
costs, expenses and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 60 days after its receipt of such
Notice, request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request
has been given by Extraordinary Resolution to the Trustee during such
60-day period by the Holders of a majority or more in principal amount
of the Outstanding Debentures;
it being understood and intended that no one or more Debentureholders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Debentureholders, or to obtain or to seek to obtain priority or preference over
any other Debentureholders or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of all the
Debentureholders.
SECTION 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Debenture or of any Coupon, as the case may be, shall have the right, which
is absolute and unconditional, to receive payment, as provided herein
(including, if applicable, Article XIII) and in such Debenture, of the principal
of and (subject to Section 3.09) interest on, such Debenture on the respective
Stated Maturity expressed in such Debenture or Coupon (or, in the case of
redemption, on the Redemption Date) or Coupon and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder; PROVIDED, that all monies paid by the Company to the
Paying Agent for the payment of principal or interest on any Debenture which
remain unclaimed at the end of two (2) years after the Stated Maturity or
Redemption Date of such Debenture will be repaid to the Company and the Holder
of any Debenture or Coupon shall thereafter have only the rights of a creditor
of the Company or such rights as may be otherwise provided by applicable law.
SECTION 5.09 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Debentureholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been
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determined adversely to the Trustee or to such Debentureholder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Debentureholders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Debentureholders shall continue as though no
such proceeding had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debentures in the last paragraph of
Section 3.08, no right or remedy herein conferred upon or reserved to the
Trustee or to the Debentureholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Debenture
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Debentureholders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the
Debentureholders, as the case may be.
SECTION 5.12 CONTROL BY DEBENTUREHOLDERS.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Debentures 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, PROVIDED that in each
case:
(a) such direction shall not be in conflict with any rule
of law or with this Indenture,
(b) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might
involve it in personal liability or be unjustly prejudicial to the
Debentureholders not joining in such direction.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
Subject to Section 5.02, the Holders of not less than a majority in
principal amount of the Outstanding Debentures may on behalf of the Holders of
all the Debentures waive any past default hereunder and its consequences, except
a default
(a) in respect of the payment of the principal of or
interest on any Debenture, or
(b) in respect of a covenant or provision hereof which
under Article IX cannot be modified or amended without the consent of
the Holder of each Outstanding Debenture affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom
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shall be deemed to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 5.15 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Debenture
by such Debentureholder's 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, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including 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 shall not be deemed to require any court to
require an undertaking or to make such an assessment in any suit instituted by
the Trustee or by the Company.
ARTICLE VI
THE TRUSTEE
SECTION 6.01 NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default hereunder, the
Trustee shall publish Notice of such Default hereunder known to the Trustee,
unless such Default shall have been cured or waived; PROVIDED, HOWEVER, that,
except in the case of a Default in the payment of the principal of or interest
on any Debenture, the Trustee shall be protected in withholding such Notice if
and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such Notice is in the interest of the
Debentureholders.
SECTION 6.02 CERTAIN RIGHTS OF TRUSTEE.
(a) The Trustee may request and conclusively rely and
shall be protected in acting or refraining from acting upon any
Extraordinary Resolution, Act, Notice or other resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
(b) Any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors
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may be sufficiently evidenced by a Board Resolution.
(c) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, conclusively rely upon an
Officers' Certificate.
(d) The Trustee may consult with counsel of its selection
and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(e) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Debentureholders pursuant to this
Indenture, unless such Debentureholders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses (including reasonable fees of Trustee's counsel), and
liabilities which might be incurred by it in compliance with such
request or direction.
(f) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any Extraordinary
Resolution, Act, Notice or other resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or
investigation.
(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 with due care by it hereunder.
(h) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture.
(i) The permissive right of the Trustee to take or
refrain from taking any actions enumerated in this Indenture shall not
be construed as a duty and the Trustee shall not be answerable in such
actions other than for its own negligence or wilful misconduct.
(j) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event
which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Debentures and this Indenture.
(k) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder and to each agent,
custodian and other Person employed
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to act hereunder.
(l) The Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specific actions
pursuant to this Indenture, which Officers' Certificate may be signed
by any person authorised to sign an Officers' Certificate, including
any person specified as so authorized in any such certificate
previously delivered and not superseded.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 6.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
DEBENTURES.
The recitals contained herein and in the Debentures, except for the
Trustee's certificates of authentication, and in the Coupons, shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures or the Coupons or of the
Conversion Shares, except that the Trustee represents that it is duly authorized
to execute and deliver this Indenture, authenticate the Debentures and perform
its obligations hereunder. The Trustee shall not be accountable for the use or
application by the Company of Debentures or the proceeds thereof.
SECTION 6.04 WHO MAY HOLD DEBENTURES.
The Trustee, the Agent, any Paying Agent, any Conversion Agent, any
Authenticating Agent, any Replacement Agent or any other agent of the Company or
of the Trustee, in its individual or any other capacity, may become the owner or
pledgee of Debentures and the Coupons and may otherwise deal with the Company
with the same rights it would have if it were not Trustee, Agent, Paying Agent,
Conversion Agent, Authenticating Agent, Replacement Agent or such other agent.
SECTION 6.05 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder 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 money received by it hereunder except as
otherwise agreed with the Company.
SECTION 6.06 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Trustee from time to time such
compensation for all services rendered by it hereunder as the Company
and the Trustee shall from time to time agree in writing (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustee upon its
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request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, bad
faith or wilful misconduct; and
(c) to indemnify the Trustee (and any predecessor Trustee
and their agents) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders service in connection with
an Event of Default specified in Section 5.01 (f) or Section 5.01 (g), the
expenses (including the reasonable charges of its counsel) and the compensation
for the services are intended to constitute expenses of the administration under
any applicable federal, state or foreign bankruptcy, insolvency or other similar
law.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a claim prior to the Debentures upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of or interest on particular Debentures.
The provision of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee. Any Paying Agent
or Authenticating Agent appointed hereunder shall be entitled to the benefits of
Section 6.06(c) as if the indemnity set forth therein were specifically afforded
to such Paying Agent or Authenticating Agent.
SECTION 6.07 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee and shall have a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of Federal, State, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
SECTION 6.08 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of Section 6.09.
(b) The Trustee may resign at any time by giving written
Notice thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 6.09 shall not have been
delivered to the Trustee within thirty (30) days after the giving of
such Notice of resignation, the resigning Trustee may at the Company's
expense petition any court of competent jurisdiction for the
appointment of a successor Trustee.
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(c) The Trustee may be removed at any time by Act of the
Holders of not less than a majority in principal amount of the
Outstanding Debentures, delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall cease to be eligible under
Section 6.07 and shall fail to resign after written request
therefor by the Company or by any Debentureholder who has been
a bona fide Holder of a Debenture for at least six (6) months,
or
(ii) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or
(iii) the Trustee shall fail or refuse to timely
carry out and discharge its duties hereunder,
then, in any such case, (i) the Company, by a Board
Resolution, may remove the Trustee, or (ii) any Debentureholder who has
been a bona fide Holder of a Debenture for at least six (6) months may,
on behalf of such Debentureholder and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any reason, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee. If, within one year after such
resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Debentures
delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor
Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Debentureholders and accepted
appointment in the manner hereinafter provided, any Debentureholder who
has been a bona fide Holder of a Debenture for at least six (6) months
may, on behalf of such Debentureholder and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee
to the Debentureholders in the manner provided for in Section 1.08.
Each Notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
SECTION 6.09 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
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execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, whether or not invested. Upon request of any
such successor Trustee, the Company shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.10 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debentures;
and in case at that time any of the Debentures shall not have been
authenticated, any successor Trustee may authenticate such Debentures either in
the name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Debentures or in this Indenture provided that the certificate of
the Trustee shall have; PROVIDED, HOWEVER, that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Debentures in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
SECTION 6.11 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in
this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
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 not to verify the contents
thereof.
(b) In case an Event of Default has occurred and is
continuing of which a Responsible Officer of the Trustee has actual
knowledge, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
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(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligence, or its own
wilful misconduct, except that:
(i) this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any
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;
(iii) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Debentureholders,
given as provided in Section 5.12, 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; and
(iv) no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) 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 6.12 MEETINGS OF DEBENTUREHOLDERS.
(a) The Trustee or the Debentureholders may convene a
meeting at any time and from time to time to consider any matter
affecting the interests of the Trustee or the Holders of the
Debentures, including the modification of the Terms and Conditions or
this Indenture and to make, give or take any request, demand,
authorization, direction, Notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of the
Debentures.
(b) The Trustee may at any time call a meeting of the
Holders of the Debentures for any purpose specified in Section 6.12(a),
to be held at such time and at such place in the Borough of Manhattan,
The City of New York, or in the City of London, England, as the Trustee
shall determine. Notice of every meeting of the Holders of the
Debentures, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be
given in the manner provided in Section 1.08, not less than 21 nor more
than 45 days prior to the date fixed for the meeting.
(c) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 25% in aggregate principal
amount of the Outstanding Debentures shall have requested the Trustee
to call a meeting of the Holder of the Debentures for any purpose other
than specified in Section 6.12(a), by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the Notice of
such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be
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held as provided herein, then the Company or the Holders of the
Debentures in the amount specified, as the case may be, may determine
the time and the place in the Borough of Manhattan, The City of New
York, or in the City of London, England, for such meeting and may call
such meeting for such purposes by giving Notice thereof as provided in
Section 1.08.
(d) To be entitled to vote at any meeting of Holders of
the Debentures, a Person shall be (i) a Holder of one or more
Outstanding Debentures, or (ii) a Person appointed by an instrument in
writing as proxy for a Holder or Holders of one or more Outstanding
Debentures by such Holder or Holders. The only Persons who shall be
entitled to be present or to speak at any meeting of Debentureholders
shall be the Persons entitled to vote at such meeting and their
counsel, any representatives of the Trustee and the Company, and their
respective counsel.
(e) Except as provided in Section 9.02, the quorum at any
meeting for passing any Extraordinary Resolution will be one or more
Persons present holding or representing 25% or more in principal amount
of the Outstanding Debentures as of the date of the meeting, or at any
adjourned such meeting one or more Persons present whatever the
principal amount of the Debentures held or represented by such Person.
An Extraordinary Resolution passed at any meeting of the Holders of the
Debentures will be binding on all Holders of the Debentures, whether or
not such Debentureholders are present at the meeting, and on the
Holders of all Coupons.
(f) Any action required by this Indenture to be taken at
any meeting pursuant to the provisions of this Section 6.12 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
appropriate percentage in principal amount of the Debentures then
outstanding that would be necessary to authorise or take such action at
a meeting. Notice of the action being taken shall be delivered to the
Debentureholders in accordance with Section 1.08. Written consents
shall be solicited in accordance with the procedures of Clearstream and
Euroclear then in effect. Every written consent shall bear the date of
signature of each Holder who signs the consent and no written consent
shall be effective to take the action referred to therein unless,
within 60 days of the earliest date a consent is delivered, written
consents signed by a sufficient number of Holders to take such action
are received by the Company. The consent of the Holders of the
Debentures is not necessary to approve the particular form of any
proposed amendment. It is sufficient if such consent approves the
substance of the proposed amendment. After an amendment under the
Debentures becomes effective, the Company will provide the Holders of
the Debentures with a notice briefly describing such amendment.
However, the failure to give such notice to all Holders of such
Debentures, or any defect therein, will not impair of affect the
validity of the amendment.
SECTION 6.13 AUTHENTICATING AGENTS.
The Principal Paying and Conversion Agent may authenticate the Global
Debenture, the Temporary Debentures and the Debentures, as the Trustee's
Authenticating Agent. The Trustee may, with the written consent of the Company,
appoint an additional Authenticating Agent acceptable to the Company with
respect to the Debentures which shall be authorized to act on behalf of the
Trustee to authenticate Debentures issued upon exchange or substitution pursuant
to this Indenture.
Debentures authenticated by an Authenticating Agent shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder, and every reference in
this Indenture to the authentication and delivery of Debentures by the Trustee
or the Trustee's certificate of authentication shall be deemed to include
authentication and delivery on behalf of the Trustee by
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an Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. The Debentures shall have endorsed
thereon the certificate of authentication set forth in Exhibits A and B hereto.
Each Authenticating Agent shall be subject to acceptance by the Company and
shall at all times be a corporation organized and doing business under the laws
of the United States of America, any state thereof, the District of Columbia,
Luxembourg, or England and Wales authorised under such laws to act as
Authenticating Agent and subject to supervision or examination by government or
other fiscal authority. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.13, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 6.13.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent; PROVIDED such corporation shall be otherwise eligible
under this Section 6.13, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written Notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written Notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a Notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.13, the Trustee may appoint a successor
Authenticating Agent which shall be subject to acceptance by the Company.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for this service under Section 6.13.
ARTICLE VII
DEBENTUREHOLDERS' LISTS AND REPORTS BY COMPANY
SECTION 7.01 DISCLOSURE OF NAMES AND ADDRESSES OF DEBENTUREHOLDERS.
Every Debentureholder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Debentureholders
regardless of the source from which such information was derived.
SECTION 7.02 REPORTS BY COMPANY.
The Company shall:
(a) file with the Trustee, within 15 days after the
Company is required to file the same with the 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 the Commission may
from time to time by rules and regulations prescribe) which the Company
may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required
to file information, documents or reports pursuant to either of said
Sections, then, on the 120th day following
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the initial issuance of the Debentures and annually thereafter, it
shall file with the Trustee, in accordance with rules and regulations
prescribed from time to time by the 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; and
(b) file with the Trustee, in accordance with rules and
regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations.
(c) delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information
contained therein, including the Company's compliance with any of its
covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER, OR LEASE
SECTION 8.01 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company will not merge or consolidate with or sell, convey,
transfer or lease or otherwise dispose of all or substantially all of its
properties or assets substantially as an entirety to any Person, unless:
(a) either (i) the Company shall be the surviving Person
or (ii) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety (1) shall be a
Person organized and validly existing under the laws of the United
States of America, any state thereof or the District of Colombia and
(2) shall expressly assume, by a trust indenture supplemental hereto,
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 on all the Debentures and the performance
and observance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(b) 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
(c) the Company or such Person shall have delivered to
the Trustee an Officers' 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 IX and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 8.02 SUCCESSOR SUBSTITUTED.
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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, 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 this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and in the event of any such conveyance or transfer, the Company (which term
shall for this purpose mean the Person named as the "Company" in the first
paragraph of this Indenture or any successor Person which shall theretofore
become such in the manner described in Section 8.01), except in the case of a
lease, shall be discharged of all obligations and covenants under this Indenture
and the Debentures and may be dissolved and liquidated.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
DEBENTUREHOLDERS.
Without the consent of any Debentureholders, the Company may, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company contained herein and in the Debentures; or
(b) to add to the covenants of the Company for the
benefit of the Debentureholders or to surrender any right or power
herein conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee pursuant to the
requirements of Section 6.09; or
(e) to cure any ambiguity or defect in or to correct or
supplement any provision herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions with
respect to matters or questions arising under this Indenture; PROVIDED
THAT such other provisions shall not adversely affect the interests of
the Debentureholders in any material respect; or
(f) to add a Guaranty or to secure the Debentures.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS.
With the consent of the Debentureholders of not less than a majority in
principal amount of the Outstanding Debentures, by Act of said Debentureholders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Debentureholders under this
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Indenture; PROVIDED, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Debenture affected thereby:
(a) change the Stated Maturity of the principal of, or
any instalment of principal of or interest on, any Debenture, or reduce
the principal amount thereof or the rate of interest thereon, or change
the coin or currency in which any Debenture or the interest thereon is
payable, or impair the right to institute suit for the enforcement of
any such payment after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(b) reduce the percentage in principal amount of the
Outstanding Debentures, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture, or
(c) modify any of the provisions of this Section or
Sections 5.13 or 6.12, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Debenture affected thereby; PROVIDED, that this clause
shall not be deemed to require the consent of any Debentureholder with
respect to changes in the references to "the Trustee" and concomitant
changes in this Section and elsewhere, or the deletion of this proviso,
in accordance with the requirements of Section 6.09 and 9.01(d), or
(d) modify any of the provisions of Section 10.10 or any
of the provisions of this Indenture relating to the subordination of
the Debenture in a manner adverse to the Holders thereof or allow the
Company to incur additional Senior Secured Indebtedness or other
Indebtedness that is senior in right of payment to the Debentures, or
(e) amend the terms of the Debentures or this Indenture
in a way that would result in the loss of an exemption from any of the
withholding taxes described under Condition 8 of the Debenture.
It shall not be necessary for any Act of Debentureholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.11) shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but 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.
SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debentures theretofore or thereafter authenticated and delivered hereunder
shall be bound
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thereby.
SECTION 9.05 REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debentures so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Debentures.
SECTION 9.06 NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 9.02, the Company
shall give Notice thereof to the Holders of each Outstanding Debenture affected,
in the manner provided for in Section 1.08, setting forth in general terms the
substance of such supplemental indenture.
ARTICLE X
COVENANTS
SECTION 10.01 PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of the
Debentureholders and the Couponholders that it will duly and punctually pay the
principal of and interest on the Debentures in accordance with the terms of the
Debentures and this Indenture.
SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in Luxembourg and in either New York or in
another European city an office or agency where Debentures may be presented or
surrendered for payment, where Debentures may be surrendered for conversion or
exchange and where Notices and demands to or upon the Company in respect of the
Debentures and this Indenture may be served. The office of the Luxembourg Paying
Agent at 69, route d'Esch, L-1470, Luxembourg and the corporate trust office of
the Principal Paying Agent at 101 Barclay Street 21st Floor West, New York, NY
10286 shall be such offices or agencies of the Company for the purposes of the
Debentures unless the Company shall designate and maintain some other offices or
agencies for one or more of such purposes pursuant to the terms of that certain
Paying and Conversion Agency Agreement of even date herewith (the "Agency
Agreement"). The Company will give prompt written Notice to the Trustee of any
change in the location of any such offices or agencies. If at any time the
Company shall fail to maintain any such required offices or agencies 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, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, Notices and demands in such
event.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of Europe) where the Debentures may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; PROVIDED, that no such designation or rescission
shall in
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any manner relieve the Company of its obligation to maintain an office or agency
in Europe for such purposes. The Company will give prompt written Notice to the
Trustee of any such designation or rescission and any change in the location of
any such other office or agency.
SECTION 10.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of or interest on any of the
Debentures, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for the
Debentures, it will, on or before 3:00 p.m. (London time) on the Business Day
immediately preceding each due date of the principal of or interest on any
Debentures, deposit with a Paying Agent a sum sufficient to pay the principal or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal or interest, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of such action or any
failure so to act.
Pursuant to the terms of the Agency Agreement, each Paying Agent shall
agree with the Trustee, subject to the provisions of this Section, that such
Paying Agent will:
(a) hold all sums held by it for the payment of the
principal of or interest on Debentures for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee Notice of any Default by the Company
in the making of any payment of principal or interest; and
(c) at any time during the continuance of any such
Default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Debenture and remaining unclaimed for two (2) years after such principal or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Debenture shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
Authorized Newspapers, Notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money
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then remaining will be repaid to the Company.
SECTION 10.04 CORPORATE EXISTENCE.
Provided that nothing contained in this Section 10.04 shall prohibit
any transaction permitted by Article VIII, the Company will at all times
maintain, preserve and keep in full force and effect its corporate existence,
rights (charter and statutory) and franchises and the Company will carry on and
conduct or will cause to be carried on and conducted its business and the
business of its Subsidiaries in a proper and efficient manner and will keep or
cause to be kept proper books of account and make or cause to be made therein
true and accurate entries of all its dealings and transactions in relation to
its business and the business of its Subsidiaries, as the case may be, all in
accordance with GAAP, and at all reasonable times it will furnish or cause to be
furnished to the Trustee or its duly authorized agent or attorney such
information relating to its business and that of its Subsidiaries as the Trustee
may reasonably require and such books of account shall at all reasonable times
be open for inspection by the Trustee or such agent or attorney.
SECTION 10.05 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) 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 Subsidiary and (b)
all lawful claims for labour, 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 10.06 MAINTENANCE OF PROPERTIES.
The Company will cause all properties owned by the Company or any
Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) 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 conducted at all times; PROVIDED, HOWEVER, that nothing in this
Section shall prevent the Company from discontinuing the 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 Debentureholders, and
PROVIDED, FURTHER, that nothing contained in this Section 10.06 shall prohibit
any transaction permitted by Article XIII.
SECTION 10.07 INSURANCE.
The Company will at all times keep all of the Company's and its
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by Corporations
similarly situated and owning like properties in similar geographic areas in
which the Company or such Subsidiary operates; PROVIDED that such insurance is
generally available at commercially reasonable rates, and PROVIDED FURTHER that
the Company or such Subsidiary may self-insure directly or through captive
insurers or insurance cooperatives, to the extent that the Company determines
that such practice is consistent with prudent business practices. Such insurance
shall be in such amount, on such terms, in such forms and for such periods as
are
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customary for similarly situated Persons in the Company's industry or in
insurance markets available to the Company.
SECTION 10.08 STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee at its Corporate Trust Office,
within 120 days after the end of each fiscal year (which on the date hereof is
September 30), a brief Officers' Certificate including a statement by the
officer executing such certificate that in the course of performing his or her
duties as an officer of the Company such officer would normally obtain knowledge
of (i) whether or not any Default or Event of Default exists in the performance
and observation of any terms, provisions and conditions of this Indenture and
(ii) whether or not the Company has otherwise kept, observed, performed and
fulfilled its obligations under this Indenture in all material respects. Such
Officers' Certificate shall further state, as to the officer signing such
certificate, to the knowledge of such officer, as of the date of such Officers'
Certificate, (i) whether or not any Default or Event of Default exists, (ii)
whether or not the Company during the preceding fiscal year kept, observed,
performed and fulfilled in all material respects each and every covenant and
obligation of the Company under this Indenture and (c) whether or not there was
any Default or Event of Default in the performance and observance of any of the
terms, provisions or conditions of this Indenture during such preceding fiscal
year. If the officer signing the Officers' Certificate knows of such a Default
or Event of Default, whether then existing or occurring during such preceding
fiscal year, the Officers' Certificate shall describe such Default or Event of
Default and its status with particularity. The First Officer's Certificate
delivered pursuant to this Section 10.08 must be delivered no later than 120
days after the first anniversary of the Closing. The Company shall also promptly
notify the Trustee if the Company's fiscal year is changed so that the end
thereof is on any date other than the then current fiscal year end date. For
purposes of this Section 10.08, such compliance shall be determined without
regard to any period of grace granted by the Trustee or requirement of Notice
under this Indenture. The Company will deliver to the Trustee, forthwith upon
becoming aware of any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or any Event of Default, an
Officers' Certificate specifying with particularity such Default or Event of
Default and further stating what action the Company has taken or is taking or
proposes to take with respect thereto. In connection with the delivery of the
Company's annual report, the Company will deliver to the Trustee a properly
completed Certificate substantially in the form of the Certificate attached
hereto as Exhibit C.
SECTION 10.09 PROVISION OF FINANCIAL STATEMENTS.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, the Company will, to the extent permitted under the Exchange Act,
file with the Trustee the annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to such Sections 13(a) or 15(d) if the Company were so subject, such documents
to be delivered to the Trustee within 15 days of the respective dates (the
"Required Filing Dates") by which the Company would have been required so to
file such documents if the Company were so subject. The Company will also in any
event (x) within 15 days of each Required Filing Date file with the Trustee
copies of the annual reports, quarterly reports and other documents which the
Company has filed with the Commission or would have been required to file with
the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if the
Company were subject to such Sections and (y) if filing such documents by the
Company with the Commission is not permitted under the Exchange Act, the Company
will promptly upon written request, supply copies of such documents to any
prospective Debentureholder at the Company's cost. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not
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constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 10.10 LIMITATION ON OTHER INDEBTEDNESS.
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.
SECTION 10.11 LIMITATION ON LIENS.
Except for Liens securing Designated Senior Indebtedness and 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 prior to the Indebtedness secured by such Lien.
SECTION 10.12 CHARTER AMENDMENTS.
On or before December 1, 2000 , the Company shall increase the
authorised capital stock of the Company to provide for a total of 500,000,000
Shares. Except as to the foregoing, the Company will not amend its Certificate
of Incorporation or Bylaws except as required by law or except to the extent
that such amendment would not have a material adverse effect on (a) the ability
of the Company to perform its obligations under this Indenture or the Debentures
or (b) the rights of the Debentureholders, except that neither (i) increases in
the number of Shares and issuance thereof with related securities, nor (ii)
designations of Preferred Stock of the Company, modifications of the terms of
such designations and issuance thereof with related securities, nor (iii)
modification or expansion of the indemnity provisions provided by the Company to
its directors and officers, nor (iv) change of the Company's registered agent
shall be deemed an amendment hereunder.
SECTION 10.13 UNITED STATES WITHHOLDING AND REPORTING REQUIREMENTS.
To the extent permitted by law, the Company will provide to the
Trustee, the Paying Agents or to any Debentureholder such statements,
certificates or other documentation concerning the organization or operations of
the Company as may be reasonably necessary to establish any exceptions or
exemptions from United States Federal income tax withholding and reporting
requirements.
SECTION 10.14 MAINTENANCE OF LISTINGS FOR DEBENTURES AND SHARES.
During the term of the Debentures, the Company will maintain a listing
of the Debentures on the Luxembourg Stock Exchange and a quotation for all the
issued Shares on OTC, it being understood that if the Company is unable to
obtain or maintain such listing of Debentures or Shares, it shall obtain and
maintain a
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listing of all the Debentures or all the 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 Agent) determine and will
forthwith give notice to the Debentureholders in accordance with Section 1.08 of
the listing, de-listing or quotation or lack of quotation of the Debentures or
Shares (as a class) by any such Alternative Stock Exchange.
SECTION 10.15 REGISTRATION OF CONVERSION SHARES
The Company shall timely comply with the terms of the Registration
Rights Agreement.
SECTION 10.16 WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 10.05 through 10.07 or 10.09,
if before or after the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Debentures, by Act of such
Debentureholders, waive such compliance in such instance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
ARTICLE XI
REDEMPTION OF DEBENTURES
SECTION 11.01 RIGHT OF REDEMPTION.
(a) On giving notice pursuant to Section 11.04, the
Company may redeem all of the Debentures for the time being outstanding
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 85% or
more in principal amount of the Debentures.
(b) Redemption shall be subject to the conditions
specified in the form of Debenture and at a Redemption Price equal to
100% of the principal amount thereof, together with accrued and unpaid
interest to the Redemption Date, but only to the extent that all
unmatured Coupons are attached to such Debentures.
SECTION 11.02 APPLICABILITY OF ARTICLE.
Redemption of Debentures at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 11.03 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The action of the Company to redeem any Debentures pursuant to Section
11.01 shall be evidenced by a Board Resolution. In case of any redemption
pursuant to Section 11.01, the Company shall, at least 45 days and not more than
60 days prior to the Redemption Date fixed by the Company (unless a shorter
Notice shall
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be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Debentures to be redeemed.
SECTION 11.04 NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided for in
Section 1.08 not less than 30 days nor more than 60 days prior to the Redemption
Date, to each Holder of Debentures to be redeemed.
All Notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) that on the Redemption Date the Redemption Price
(together with accrued and unpaid interest, if any, to the Redemption
Date payable as provided in Section 11.06, but only with respect to
Debentures with all unmatured Coupons attached) will become due and
payable upon each such Debenture, or the portion thereof, to be
redeemed, and that interest thereon will cease to accrue on and after
said date;
(d) the place or places where such Debentures are to be
surrendered for payment of the Redemption Price;
(e) pursuant to Section 3.13, any ISIN or other
identifying numbers relating to the Debentures; and
(f) a statement reflecting that Debentureholders have the
right to convert their Debentures up to the date that is two Business
Days prior to the date set by the Company for redemption.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.05 DEPOSIT OF REDEMPTION PRICE.
Not less than one Business Day prior to any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) an amount of money sufficient to pay the Redemption
Price of, and accrued and unpaid interest on, all the Debentures which are to be
redeemed on that date.
SECTION 11.06 DEBENTURES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Debentures so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued and unpaid interest,
if any, to the Redemption Date, subject to the delivery of all unmatured and
matured but unpaid Coupons), and from and after such date (unless the Company
shall default in the payment of the Redemption Price) such Debentures shall
cease to bear interest. Upon surrender of any such Debenture for redemption in
accordance with said Notice, such Debenture shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date, to the extent that all matured and unpaid
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and unmatured Coupons, if any, are attached; PROVIDED, HOWEVER, that instalments
of interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Debentures, or one or more Predecessor
Debentures, according to their terms.
If any Debenture called for redemption shall not be so paid upon
surrender by the Debentureholder as prescribed hereunder thereof for redemption,
the principal shall, until paid, bear interest from the Redemption Date at the
rate prescribed therefor in the Debentures. In the event that the Company shall
default in making payment in full in respect of any Debenture which shall have
been called for redemption prior to the Stated Maturity Date of the Debenture,
on the Redemption Dates the Conversion Right attaching to such Debenture will
continue to be exercisable (unless previously exercised by the Company) 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.
SECTION 11.07 SURRENDER OF DEBENTURES.
Each Debenture shall be presented for redemption together 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 proportion 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 mentioned
above against presentation and surrender (or, in the case of part payment only,
endorsement) of such missing Coupon at any time before the expiry of five (5)
years after the Relevant Date in respect of the relevant Debenture.
ARTICLE XII
CONVERSION
SECTION 12.01 CONVERSION RIGHT AND CONVERSION PRICE.
(a) Subject to and upon compliance with the provisions of
this Article, any Debenture may be converted at the option of the
Debentureholder during the Conversion Period at the principal amount
thereof into fully paid and non-assessable Conversion Shares at the
applicable Conversion Price.
(b) The Conversion Price shall be adjusted in certain
instances as provided in Section 12.04.
(c) Except as otherwise provided in this Indenture, a
holder of shares of Common Stock issued on conversion of Debentures
shall not be entitled to any rights for any record date which precedes
the relevant Conversion Date or Mandatory Conversion Date, as the case
may be.
SECTION 12.02 EXERCISE OF CONVERSION RIGHT.
(a) In order to exercise the Conversion Right, the
Debentureholder shall provide notice to the Conversion Agent that it
intends to exercise its Conversion Right and if the Definitive Bearer
Debentures have been issued, the Debentureholder shall surrender such
Definitive Bearer Debenture or Debentures and (if applicable) all
unmatured Coupons, including the one for the next due interest
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payment, to the Conversion Agent at its corporate trust offices, or
such other office of any Conversion Agent as published in the
Authorized Newspapers from time to time, accompanied by a Conversion
Notice. A Conversion Notice once delivered shall be irrevocable.
(b) Debentures shall be deemed to have been converted on
the Conversion Date, and at such time, except as provided in this
Section 12.02 below, the rights of the Debentureholders as
Debentureholders shall cease, and the Person or Persons entitled to
receive the Common Stock issuable upon conversion shall be treated for
all purposes as the record holder or holders of such Common Stock at
such time. Upon a conversion of the Debentures, the Company will cause
the person or persons designated for the purpose in the Conversion
Notice to be registered as holder(s) of the relevant number of Shares
in compliance with the terms set out in Condition 6(B)(ii) of the
Debentures.
(c) All accrued and unpaid interest due upon the
conversion of the Debentures as a result of an election by the
Debentureholder or 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 check drawn on, or by transfer to a
U.S. dollar account maintained by the payee in accordance with
instructions given by the relevant Debentureholder.
SECTION 12.03 CALCULATION OF SHARES ISSUED ON CONVERSION AND FRACTIONS
OF SHARES.
The number of 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 in effect on the Conversion Date,
with the result being rounded down to the nearest whole number. No cash
in lieu of or fractional shares of Common Stock shall be issued upon
conversion of Debentures. If more than one Debenture shall be
surrendered for conversion at one time by the same Debentureholder, the
number of full Shares which shall be issuable upon conversion thereof
shall be computed on the basis of the aggregate principal amount of the
Debentures (or specified portions thereof) so surrendered.
SECTION 12.04 ADJUSTMENT OF MAXIMUM CONVERSION PRICE. In addition to
the adjustments to the Conversion Price as provided for in Condition 6 of the
Debenture, the Maximum Conversion Price shall be subject to further adjustments
as follows:
(a) In case the Company shall pay or make a dividend or
other distribution on its Common Stock exclusively in Common Stock or
shall pay or make a dividend or other distribution on any other class
of capital stock of the Company which dividend or distribution includes
Common Stock, the Maximum Conversion Price in effect at the opening of
business on the day next following the date fixed for the determination
of stockholders entitled to receive such dividend or other distribution
shall be reduced by multiplying such Maximum Conversion Price by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately
after the opening of business on the day next following the date fixed
for such determination. For the purposes of this Section 12.04(a), the
number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company.
(b) In case the Company shall pay or make a dividend or
other distribution on its
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Common Stock consisting exclusively of, or shall otherwise issue to all
holders of its Common Stock, rights, warrants or options entitling the
holders thereof to subscribe for or purchase shares of Common Stock at
a price per share less than the Market Price per share (determined as
provided in Section 12.04(g)) of the Common Stock on the date fixed for
the determination of stockholders entitled to receive such rights,
warrants or options, the Maximum Conversion Price in effect at the
opening of business on the day following the date fixed for such
determination shall be reduced by multiplying such Maximum Conversion
Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares
of Common Stock so offered for subscription or purchase would purchase
at such Market Price and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, outstanding at the close of
business on the date fixed for such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (b),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company. The Company shall
not issue any rights, warrants or options in respect of shares of
Common Stock held in the treasury of the Company.
(c) In case the Company shall, by dividend or otherwise,
make a distribution to all holders of its Common Stock exclusively in
cash in an aggregate amount that, together with (i) the aggregate
amount of any other distributions to all holders of its Common Stock
made exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no Conversion
Price adjustment pursuant to this Section 12.04(c) has been made and
(ii) the aggregate of any cash plus the fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Company's
Board of Directors), as of the expiration of the tender or exchange
offer referred to below, of consideration payable in respect of any
tender or exchange offer by the Company or a Subsidiary for all or any
portion of the Common Stock concluded within the 12 months preceding
the date of payment of such distribution and in respect of which no
Conversion Price adjustment pursuant to paragraph (f) of this Section
12.04 has been made, exceeds five percent (5%) of the product of the
Market Price per share (determined as provided in Section 12.04(g)) of
the Common Stock on the date fixed for stockholders entitled to receive
such distribution times the number of shares of Common Stock
outstanding on such date, the Maximum Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the
Maximum Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this
paragraph (c) by a fraction of which the numerator shall be the Market
Price per share (determined as provided Section 12.04(g)) of the Common
Stock on the date of such effectiveness less the amount of cash so
distributed applicable to one share of Common Stock and the denominator
shall be such Market Price per share of the Common Stock, such
reduction to become effective immediately prior to the opening of
business on the day following the date fixed for the payment of such
distribution.
(d) Subject to the last sentence of this paragraph (d),
in case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of
any class of capital stock, securities, cash or property (excluding any
rights, warrants or options referred to in Section 12.04(b), any
dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in Section 12.04(a)), the Maximum Conversion
Price shall be reduced so that the same shall equal the price
determined by multiplying the Maximum Conversion
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Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this paragraph (d) by a
fraction of which the numerator shall be the Market Price per share
(determined as provided in paragraph (g) of this Section) of the Common
Stock on the date of such effectiveness less the fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Company's
Board of Directors and shall, in the case of securities being
distributed for which prior thereto there is an actual or when issued
trading market, be no less than the value determined by reference to
the average of the Market Price over the period specified in the
succeeding sentence), on the date of such effectiveness, of the portion
of the evidences of indebtedness, shares of capital stock, securities,
cash and property so distributed applicable to one share of Common
Stock and the denominator shall be such Market Price per share of the
Common Stock, such reduction to become effective immediately prior to
the opening of business on the day next following the date fixed for
the payment of such distribution (such date to being referred to as the
"Reference Date"). If the Board of Directors determines the fair market
value of any distribution for purposes of this paragraph (d) by
reference to the actual or when issued trading market for any
securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the
Market Price per share pursuant to paragraph (g) of this Section. For
purposes of this paragraph (d), any dividend or distribution that
includes shares of Common Stock or rights, warrants or options to
subscribe for or purchase shares of Common Stock shall be deemed
instead to be (i) a dividend or distribution of the evidences of
indebtedness, cash, property, shares of capital stock or securities
other than such shares of Common Stock or such rights, warrants or
options (making any Conversion Price reduction required by this
paragraph (d)) immediately followed by (ii) a dividend or distribution
of such shares of Common Stock or such rights, warrants or options
(making any further Conversion Price reduction required by Section
12.04(a) or (b)), except (i) the Reference Date of such dividend or
distribution as defined in this Section 12.04(d) shall be substituted
as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights, warrants
or options" and "the date fixed for such determination" within the
meaning of Section 12.04(a) and (b) and (ii) any shares of Common Stock
included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 12.04(a)).
(e) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Maximum
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and, conversely, in case outstanding shares
of Common Stock shall each be combined into a smaller number of shares
of Common Stock, the Maximum Conversion Price in effect at the opening
of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(f) In case a tender or exchange offer made by the
Company or any Subsidiary for all or any portion of the Common Stock
shall expire and such tender or exchange offer shall involve an
aggregate consideration having a fair market value (as determined in
good faith by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Company's Board of
Directors) at the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it
may be amended) that, together with (i) the aggregate of the cash plus
the fair market value (as determined in good faith by the Board of
Directors, whose
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determination shall be conclusive and described in a resolution of the
Company's Board of Directors), as of the expiration of the other tender
or exchange offer referred to below, of consideration payable in
respect of any other tender or exchange offer by the Company or a
Subsidiary for all or any portion of the Common Stock concluded within
the preceding 12 months and in respect of which no Conversion Price
adjustment pursuant to this paragraph (f) has been made and (ii) the
aggregate amount of any distributions to all holders of the Common
Stock made exclusively in cash within the preceding 12 months and in
respect of which no Conversion Price adjustment pursuant to Section
12.04(e) has been made, exceeds five percent (5%) of the product of the
Market Price per share (determined as provided in Section 12.04(g)) of
the Common Stock on the Expiration Time times the number of shares of
Common Stock outstanding (including any tendered shares) on the
Expiration Time, the Maximum Conversion Price shall be reduced (but not
increased) so that the same shall equal the price determined by
multiplying the Maximum Conversion Price in effect immediately prior to
the Expiration Time by a fraction of which the numerator shall be (i)
the product of the Market Price per share (determined as provided in
Section 12.04(g)) of the Common Stock at the Expiration Time times the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Expiration Time minus (ii) the fair market
value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as
the "Purchased Shares") and the denominator shall be the product of (i)
such Market Price per share at the Expiration Time times (ii) such
number of outstanding shares at the Expiration Time less the number of
Purchased Shares, such reduction to become effective immediately prior
to the opening of business on the day following the Expiration Time.
(g) For the purpose of any computation of the Market
Price under this paragraph (g) and Section 12.04(b), (d) and (e), (i)
if the "ex" date (as hereinafter defined) for any event (other than the
issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to paragraph (a), (b), (c),
(d), (e) or (f) above ("Other Event") occurs on or after the tenth
Stock Exchange Business Day prior to the date in question and prior to
the "ex" date for the issuance or distribution requiring such
computation (the "Current Event"), the closing price for each Stock
Exchange Business Day prior to the "ex" date for such Other Event shall
be adjusted by multiplying such closing price by the same fraction by
which the Conversion Price is so required to be adjusted as a result of
such Other Event, (ii) if the "ex" date for any Other Event occurs
after the "ex" date for the Current Event and on or prior to the date
in question, the closing price for each Stock Exchange Business Day on
and after the "ex" date for such Other Event shall be adjusted by
multiplying such closing price by the reciprocal of the fraction by
which the Conversion Price is so required to be adjusted as a result of
such Other Event, (iii) if the "ex" date for any Other Event occurs on
the "ex" date for the Current Event, one of those events shall be
deemed for purposes of clauses (i) and (ii) of this proviso to have an
"ex" date occurring prior to the "ex" date for the other event, and
(iv) if the "ex" date for the Current Event is on or prior to the date
in question, after taking into account any adjustment required pursuant
to clause (ii) of this proviso, the closing price for each Stock
Exchange Business Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value on the
date in question (as determined in good faith by the Board of Directors
in a manner consistent with any determination of such value for
purposes of this Section 12.04(c) or (d), whose determination shall be
conclusive and described in a resolution of the Company's Board of
Directors) of the portion of the rights, warrants, options, evidences
of indebtedness, shares of capital stock, securities, cash or property
being distributed applicable to one share of Common Stock. For the
purpose of any computation under Section 12.04(f), the Market
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Price per share of Common Stock on any date in question shall be deemed
to be the Market Price on the date selected by the Company commencing
on or after the latest (the "Commencement Date") of (i) the date 20
Stock Exchange Business Days before the date in question, (ii) the date
of commencement of the tender or exchange offer requiring such
computation and (iii) the date of the last amendment, if any, of such
tender or exchange offer involving a change in the maximum number of
shares for which tenders are sought or a change in the consideration
offered, and ending not later than the date of the Expiration Time of
such tender or exchange offer (or, if such Expiration Time occurs
before the close of trading on a Stock Exchange Business Day, not later
than the Stock Exchange Business Day immediately preceding the date of
such Expiration Time); PROVIDED, HOWEVER, that if the "ex" date for any
Other Event (other than the tender or exchange offer requiring such
computation) occurs on or after the Commencement Date and on or prior
to the date of the Expiration Time for the tender or exchange offer
requiring such computation, the closing price for each Stock Exchange
Business Day prior to the "ex" date for such Other Event shall be
adjusted by multiplying such closing price by the same fraction by
which the Conversion Price is so required to be adjusted as a result of
such other event. For purposes of this paragraph, the term "ex" date,
(i) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the closing price was
obtained without the right to receive such issuance or distribution,
(ii) when used with respect to any subdivision or combination of shares
of Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective, and (iii) when used
with respect to any tender or exchange offer means the first date on
which the Common Stock trades regular way on such exchange or in such
market after the Expiration Time of such tender or exchange offer.
(h) The Company may make such reductions in the
Conversion Price, in addition to those required by Section 12.04 (a),
(b), (c), (d), (e) and (f), as it considers to be advisable in order
that any event treated for Federal income tax purposes as a dividend of
stock or stock rights shall not be taxable to the recipients.
(i) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease
of at least five percent (5%) in the Conversion Price; PROVIDED,
HOWEVER, that any adjustments which by reason of this paragraph (i) are
not required to be made shall be carried forward and taken into account
in any subsequent adjustment.
(j) In addition to the foregoing, in the event the
Company at any time issues shares of Common Stock or Common Stock
Equivalents at a price less than the then effective Maximum Conversion
Price, the Maximum Conversion Price shall be deemed adjusted to the
price at which such shares of Common Stock or Common Stock Equivalents
were issued and the Debentureholders shall have the right and option to
convert their Debentures at such price (the "Temporary Conversion
Price") into shares of Common Stock for a period of sixty (60) calendar
days following notice by the Company of any such Temporary Conversion
Price; provided, however, that the foregoing shall not apply to any
issuances (i) pursuant to the conversion or exercise of currently
issued and outstanding shares of Common Stock or Common Stock
Equivalents (including the conversion of the Company's Series A
Preferred Stock even if the conversion ratio for such stock is
increased from 10 to 1 to 75 to 1); (ii) pursuant to the Debentures;
(iii) pursuant to conversion of any currently outstanding securities of
the Company (including any warrants) or any Warrants issued pursuant to
the Offering; (iv) pursuant to 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
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effect or hereafter created or amended, including, but not limited to,
the Company's 1995 Stock Plan, 1994 Stock Option Plan, 1995 Director
Option Plan and 1995 Employee Stock Purchase Plan; and (v) pursuant to
any compensation arrangement approved by the Board of Directors of the
Company with any director, officer or employee or proposed director,
officer, or employee of the Company or any Subsidiary. Prior to the
Effective Date, the Company will not issue shares of Common Stock or
Common Stock Equivalents at less than the Conversion Price, except as
provided under (i) through (vii) above. Notice of any such issuance
shall be given by the Company to the Trustee and in accordance with
Section 1.07 and 1.08 of this Indenture (which notice shall be
irrevocable) by publication in two (2) Authorized Newspapers, one of
which is required to be a general leading newspaper in Luxembourg,
which is expected to be the LUXEMBOURG WORT. Upon any such conversion
of any Debenture by a Debentureholder pursuant to the foregoing,
payment will be made for interest accrued during the period from the
most recent Interest Payment Date to the Conversion Date. Immediately
after expiration of such sixty (60) day period, the Conversion Price
shall be deemed reset to the Conversion Price as in effect immediately
prior to such issuance of Common Stock or Common Stock Equivalents,
subject to any adjustments that would otherwise have been made in such
Conversion Price pursuant to this Article 12 during the effectiveness
of such Temporary Conversion Price.
SECTION 12.05 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Maximum Conversion Price is adjusted as provided in this
Article XII or pursuant to Condition 6(F) of the Debenture the Company shall
compute the adjusted Maximum Conversion Price in accordance with Section 12.04
and shall prepare a certificate signed by the Chief Financial Officer of the
Company setting forth the adjusted Conversion Price and showing in reasonable
detail the facts upon which such adjustment is based, and such certificate shall
forthwith be delivered to the Trustee, the Paying Agent and the Conversion
Agent, and the Company shall cause Notice thereof to be published in accordance
with Section 1.08 within ten (10) Business Days of the effective date of such
adjustment.
SECTION 12.06 NOTICE OF CERTAIN CORPORATE ACTION.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that would
require a Conversion Price adjustment pursuant to Section 12.04(c); or
(b) the Company shall authorize the granting to the
holders of its Common Stock of rights, warrants or options to subscribe
for or purchase any shares of capital stock of any class or of any
other rights (excluding employee stock options); or
(c) of any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding
shares of Common Stock), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company is required, or of the sale or transfer of all or substantially
all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company or any Subsidiary of the Company shall
commence a tender or
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exchange offer for all or a portion of the Company's outstanding shares
of Common Stock (or shall amend any such tender or exchange offer);
then the Company shall cause to be mailed to the Trustee, the Paying Agent and
the Conversion Agent and to be published in the manner provided under Section
1.08 hereof within ten (10) Business Days after the date on which Notice is sent
to the holders of the Company's Common Stock, a Notice stating (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
granting of rights, warrants or options, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights, warrants or options are to be determined, or
(ii) the date on which such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such re-classification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up,
or (iii) the date on which such tender offer commenced, the date on which such
tender offer is scheduled to expire unless extended, the consideration offered
and the other material terms thereof (or the material terms of any amendment
thereto).
SECTION 12.07 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times reserve and keep available, free from
pre-emptive or similar rights, out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of Debentures, the whole
number of Shares then issuable upon the conversion in full of all Outstanding
Debentures including any additional Conversion Shares that may be granted
pursuant to Condition 6(G). The Company covenants with the Trustee and the
Holders of the Debentures that all Conversion Shares issued shall be duly and
validly issued as fully-paid and non-assessable stock.
SECTION 12.08 TAXES ON CONVERSIONS.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of Shares on conversion of Debentures pursuant hereto.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of Shares in a
name other than that of the Holder of the Debentures to be converted, and no
such issue or delivery shall be made unless and until the Person requesting such
issue has paid to the Company the amount of any such tax, or has established to
the satisfaction of the Company that such tax has been paid.
SECTION 12.09 CANCELLATION OF CONVERTED DEBENTURES.
All Debentures delivered for conversion to the Conversion Agent shall
be canceled by the Company, and shall not under any circumstances be reissued.
SECTION 12.10 PROVISIONS IN CASE OF RECLASSIFICATION CONSOLIDATION,
MERGER OR SALE OF ASSETS.
In the event that the Company shall be a party to any transaction,
including without limitation any (i) recapitalization or reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation of the Company with, or
merger of the Company into, any other person, any merger of another person into
the Company (other than a merger which does not result in a reclassification,
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conversion, exchange or cancellation of all of the outstanding shares of Common
Stock of the Company), (iii) any sale or transfer of all or substantially all of
the assets of the Company, or (iv) any compulsory share exchange pursuant to
which the Common Stock is converted into the right to receive other securities,
cash or other property, then lawful provision shall be made as part of the terms
of such transaction whereby the Holder of each Debenture then outstanding shall
have the right thereafter to convert such Debenture only into the kind of common
stock receivable upon such transaction by a holder of Common Stock (at an
adjusted Conversion Price equal to (a) the Conversion Price determined pursuant
to Section 12.04 as though all such securities, cash or property (other than
common stock) had been distributed in a dividend covered by Section 12.04(d)
with an "ex" date on the date of such transaction divided by (b) the number of
shares (or fraction thereof) of common stock receivable upon such transaction in
respect of each share of Common Stock). The Person formed by such consolidation
or resulting from such merger or which acquired such assets or which acquired
the Company's Shares, as the case may be, shall execute and deliver to the
Trustee on behalf of each of the Debentureholders an amendment to this Indenture
as provided for under Article IX. Such amendment shall provide for adjustments
which, for events subsequent to the effective date of such amendment, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article and shall provide for the assumption by such other Person, if any,
of the Company's obligations under this Indenture and the Debentures. The above
provisions of this Section 12.10 shall similarly apply to successive
transactions of the foregoing type.
The Trustee shall not have any duty to determine when any adjustment
provided for in this Article should be made, the manner in which any such
adjustment should be made or what any such adjustment should be.
SECTION 12.11 MANDATORY CONVERSION.
Each Debentureholder acknowledges and agrees that the Company may, at
its own cost, elect to exercise the Conversion Right on behalf of each and every
Debentureholder in respect of all of the Debentures Outstanding at the
Conversion Price applicable as of the date fixed by the Company for such
conversion (the "Mandatory Conversion Date"), provided that (i) the Company has
caused a Registration Statement to have been declared effective by the
Commission in satisfaction of its obligations under the Registration Rights
Agreement and such Registration Statement is currently in effect and remains
effective as of the Mandatory Conversion Date and (ii)the average Market Price
of the Shares during any 20 consecutive Stock Exchange Business Days falling on
or after the date the Company has satisfied its obligations in clause (i) above
and on the date the notice is sent, is equal to or greater than $0.42. The
Company's election to exercise its conversion rights as set out herein shall not
modify the Company's obligations under the Registration Rights Agreement. The
Company is required to give notice to the Agent and the Trustee and in the
manner set out in Section 1.08 of the Indenture that the criteria for Mandatory
Conversion under this Section 12.11 has been met within 20 days of having met
such criteria.
The Company may give written notice of its election to convert the
Debentures within 30 days of having satisfied the criteria set out in clauses
(i) and (ii) in the preceding paragraph provided such criteria are also
satisfied on the date such notice is sent. The Company shall cause such written
notice of the Mandatory Conversion Date to be given to the Trustee, the Paying
Agents, the Conversion Agents and the Debentureholders, not less than 20
calendar days prior to the Mandatory Conversion Date, which notice shall be
irrevocable and given to the Trustee and in accordance with Section 1.08 of the
Indenture by publication in two (2) Authorized Newspapers, one of which is
required to be a general leading newspaper in Luxembourg, which is expected to
be the LUXEMBOURG WORT. Following such notice the Company shall comply with the
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procedures for Conversion as set out in Section 6 of the Terms and Conditions
and each of the Debentureholders will be required on or before the Mandatory
Conversion Date to deliver or procure delivery of its Debentures with all
unmatured Coupons relating to such Debentures together with a duly completed
Conversion Notice to the specified office of any Conversion Agent, during its
usual business hours for such purposes and perform together with the Company,
the obligations applicable to it on conversion specified in this Section 12.11.
If any Debentureholder with respect to whose Debentures Mandatory
Conversion (pursuant to this Section 12.11) is to take place shall fail to
perform its obligations specified in this Section 12.11 or shall have a
registered address in any territory where, in the absence of any registration
statement or other special formalities or legal requirements, the issue,
allotment, transfer or delivery of the Shares arising on Mandatory Conversion is
or could be unlawful or impracticable, subject to applicable law, the Company or
such Debentureholder shall make arrangements for the sale of such Shares to a
third party at the best consideration reasonably obtainable and arrange for the
Principal Paying and Conversion Agent to pay to such Debentureholder the
consideration received by the by the Company or such Debentureholder in respect
of such Shares (after any deduction required to reimburse any reasonable and
proper expenses incurred in arranging any such sale or any taxes payable in
connection therewith arising solely as a result of the Debentureholder's failure
to perform its obligations under this Section 12.11).
Provided the Company complies with all of its obligations hereunder,
from and after the Mandatory Conversion Date the Debentures shall only be deemed
to represent the right to receive Shares.
SECTION 12.12 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.
Neither the Trustee nor any Conversion Agent shall at any time be under
any duty or responsibility to any Debentureholder to determine whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or extent of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. Neither the Trustee nor any Conversion Agent shall
be accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock or of any securities or Property or cash which may at
any time be issued or delivered upon the conversion of any Debenture; and
neither the Trustee nor any Conversion Agent make any representation with
respect thereto. Neither the Trustee nor the Conversion Agent shall be
responsible for any failure of the Company to make any cash payment or to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property upon the surrender of any Debenture for the purpose of
conversion, or, subject to Section 6.11, to comply with any of the covenants of
the Company contained in this Article Twelve.
ARTICLE XIII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.01 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at its option by Board Resolution, at any time, with
respect to the Debentures, elect to have either Section 13.02 or Section 13.03
be applied to all Outstanding Debentures upon compliance with the conditions set
forth below in this Article. The Company shall promptly give Notice of such
election to the Trustee. Further, the Company shall notify Debentureholders of
its election at least 45 days prior to
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satisfying the conditions set out in Section 13.04 and the Debentureholders
shall retain the right to convert their Debentures at any time prior to the
satisfaction of the conditions set out in Section 13.04.
SECTION 13.02 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 13.01 of the option
applicable to this Section 13.02, the Company shall be deemed to have been
discharged from its obligations with respect to all Outstanding Debentures on
the date the conditions set forth in Section 13.04 are satisfied ("Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
Outstanding Debentures, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 13.05 and the other Sections of this Indenture
referred to in (A) and (B) below, and to have satisfied all its obligations
under such Debentures, including the obligation to pay interest on the
Debentures, and this Indenture insofar as such Debentures are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same at the Company's request), except for the following which
shall survive until otherwise terminated or discharged hereunder: (A) the rights
of Holders of Outstanding Debentures to receive, solely from the trust fund
described in Section 13.04 and as more fully set forth in such Section, payments
in respect of the principal of and interest on such Debentures when such
payments are due, (B) the Company's obligations with respect to such Debentures
under Sections 3.04, 3.05, 3.08, 10.02 and 10.03 and with respect to the Trustee
under Section 6.06, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article. Subject to compliance with this Article,
the Company may exercise its option under this Section 13.02 notwithstanding the
prior exercise of its option under Section 13.03 with respect to the Debentures.
SECTION 13.03 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 13.01 of the option
applicable to this Section 13.03, the Company shall be released from its
obligations under any covenant contained in Sections 10.04 through 10.14 with
respect to the Outstanding Debentures on and after the date the conditions set
forth in Section 13.04 are satisfied ("Covenant Defeasance"), and the Debentures
shall thereafter be deemed not to be "Outstanding" for the purposes of any
request, demand, authorization, direction, declaration, Notice, consent, waiver
or Act of Debentureholders (and the consequences of any thereof) in connection
with such covenants, but shall continue to be deemed "Outstanding" for all other
purposes hereunder. For this purpose, such Covenant Defeasance means that, with
respect to the Outstanding Debentures, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 5.01(d), but, except as specified above, the remainder of this
Indenture and such Debentures shall be unaffected thereby.
SECTION 13.04 CONDITIONS TO LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
The following shall be the conditions to application of either Section
13.02 or Section 13.03 to the Outstanding Debentures:
(a) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 6.07 who shall agree to comply with the
provisions of this Article applicable to it) as trust funds in trust
for the purpose of making the following payments, specifically pledged
as security for, and dedicated solely to, the benefit of the
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Holders of such Debentures, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, the
principal of and interest on the Outstanding Debentures on the Stated
Maturity (or Redemption Date, if applicable) of such principal or
instalment of interest; PROVIDED that the Trustee shall have been
irrevocably instructed in writing to apply such money or the proceeds
of such U.S. Government Obligations to said payments with respect to
the Debentures; and PROVIDED FURTHER that, upon the effectiveness of
this Section 13.04, the money or U.S. Government Obligations deposited
shall not be subject to the rights of the Debentureholders pursuant to
the provisions of this Article. Before or after such a deposit, the
Company may give to the Trustee, in accordance with Section 11.03
hereof, a Notice of its election to redeem all of the Outstanding
Debentures at a future date in accordance with Article XI hereof, which
Notice shall be irrevocable. Such irrevocable redemption Notice, if
given, shall be given effect in applying the foregoing.
(b) No Default or Event of Default with respect to the
Debentures shall have occurred and be continuing on the date of such
deposit or, insofar as paragraphs (f) and (g) of Section 5.01 hereof
are concerned, at any time during the period ending on the 91st day
after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
(c) No event or condition shall exist that pursuant to
the provisions of Section 13.02 or 13.03 would prevent the Company from
making payments of the principal of or interest on the Debentures on
the date of such deposit or at any time during the period ending on the
91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period).
(d) Such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under
any material agreement or instrument to which the Company is a party or
by which it is bound.
(e) In the case of an election under Section 13.02, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that the Holders of the Outstanding Debentures will not
recognize income, gain or loss for Federal income tax purposes as a
result of such defeasance and will be subject to 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.
(f) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the Legal
Defeasance under Section 13.02 or the Covenant Defeasance under Section
13.03 (as the case may be) have been complied with.
SECTION 13.05 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO
BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 10.03, all
money and U.S. Government
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Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee) (collectively for purposes of this Section 13.05, the
"Trustee") pursuant to Section 13.04 in respect of the Outstanding Debentures
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Debentures and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Debentures of
all sums due and to become due thereon in respect of principal and interest, but
such money and U.S. Government Obligations need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 13.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Debentures.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 13.04
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance, as
applicable, in accordance with this Article.
SECTION 13.06 REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 13.05 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 13.02 or 13.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 13.05; PROVIDED,
HOWEVER, that no action taken in good faith by the Company after a deposit of
money or U.S. Government Obligations or both pursuant to Section 13.05 and prior
to the revival and reinstatement of obligations under this Indenture and the
Debentures pursuant to this Section 13.06 shall constitute the basis for the
assertion of an Event of Default pursuant to Section 5.01; and PROVIDED,
FURTHER, that if the Company makes any payment of principal of or interest on
any Debenture following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Debentures to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE XIV
SENIORITY OF DEBENTURES
SECTION 14.01 SENIORITY OF THE DEBENTURES.
As set forth above, the Company's obligations under the Debentures and
the Coupons and hereunder do and will rank at all times junior to the Secured
Senior Indebtedness and the Permitted Subsidiary Indebtedness.
ARTICLE XV
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IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 15.01 LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal of or
interest on any Debentures or any part thereof, or for any claim based thereon
or otherwise in respect thereof, or of the indebtedness represented thereby, or
upon any obligation, covenant or agreement of this Indenture, against any
incorporator, or against any stockholder, officer or director, as such, past,
present or future, of the Company, or of any predecessor or successor Person,
either directly or through the Company or any such predecessor or successor
Person, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, it being expressly agreed
and understood that this Indenture and all the Debentures are solely corporate
obligations, and that no personal liability whatsoever shall attach to, or be
insured by, any such incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any predecessor or successor
Person, either directly or through the Company or any such predecessor or
successor Person, because of the indebtedness hereby authorized or under or by
reason of any of the obligations, covenants, promises or agreements contained in
this Indenture or in any of the Debentures or to be implied herefrom or
therefrom; and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of this Indenture and the issue of the Debentures; PROVIDED, HOWEVER, that
nothing herein or in the Debentures contained shall be taken to prevent recourse
to and the enforcement of the liability, if any, of any stockholder or
subscriber to capital stock of the Company upon or in respect of shares of
capital stock not fully paid up.
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
FiberChem, Inc.
By: /s/ Melvin W. Pelley
Name: Melvin W. Pelley
Title: Secretary & CFO
The Bank of New York,
as Trustee
By: /s/ Luis Perez
------------------------------
Name: Luiz Perez
----------------------------
Title: Assistant Vice President
--------------------------
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EXHIBIT A(1)
DEFINITIVE BEARER DEBENTURE
U.S.$__________(2)
FIBERCHEM, INC.
U.S.$______________
12% Senior Convertible Debentures Due 2002
THIS IS TO CERTIFY that ______________, a corporation organized under
the laws of the State of Delaware (the "Company"), will pay to the bearer of
this Debenture on July 26, 2002 (or on such earlier date as the principal sum
hereinafter mentioned may become repayable in accordance with the Terms and
Conditions endorsed hereon) the principal sum of
U.S.$_________(3) (____ THOUSAND UNITED STATES DOLLARS)
together with interest on the said principal sum at the rate of 12% per annum
from and including [_________](4), payable semi-annually in arrears on
December 1 and June 1 in each year, and such additional amounts (if any) as may
be payable under the said Terms and Conditions, all subject to and in
accordance with the said Terms and Conditions.
This Debenture forms one of a series of Debentures in the aggregate
principal amount of U.S.$1,350,000 (the "Debentures") and are constituted by a
Trust Indenture (the "Trust Indenture") dated as of July 28, 2000, made between
the Company and The Bank of New York, as Trustee. The Debentures are issued
subject to and with benefit of the provisions of such Trust Indenture.
This Debenture is convertible into shares of common stock of the
Company in accordance with and subject to the said Terms and
Conditions.
This Debenture and the coupons appertaining hereto shall not be valid
or become binding for any purpose unless and until this Debenture is
authenticated by or on behalf of the Trustee (as defined in the Trust
Indenture). All terms used in this Debenture which are defined in the Trust
Indenture shall have the respective meanings assigned to them in the Trust
Indenture.
IN WITNESS WHEREOF the Company has caused this Debenture and the
coupons appertaining hereto to be duly executed.
CERTIFICATE OF AUTHENTICATION
This Definitive Bearer Debenture is one of the Debentures referred to
in the within mentioned Trust Indenture.
FIBERCHEM, INC. The Bank of New York
as Trustee
By: _______________________________ By: ________________________
Name: __________________________ Authorised Signatory
Title: _______________________________
By: _______________________________
____________ Secretary
------------------------------
(1) This is the form that the Definitive Bearer Debentures will take if
ever issued. The Debentures will be printed in the appropriate commercial form
by a commercial printer that is in the business of printing Debentures issued in
the public markets.
(2) Denomination amount to be inserted of $1,000, $5,000 or $10,000
(3) Denomination amount to be inserted of $1,000, $5,000 or $10,000
(4) Insert here the date of the last interest period through which
interest has been paid and if no interest has yet been paid insert date of
issuance of the Global Debenture.
<PAGE>
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
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FULL SIZE TEXT OF THE TERMS AND CONDITIONS
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 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
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<PAGE>
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 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.
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
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<PAGE>
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
(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
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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 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
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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 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.
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"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 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
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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 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
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<PAGE>
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.
(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
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<PAGE>
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 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 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.
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<PAGE>
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):
(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
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<PAGE>
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 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
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<PAGE>
(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 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
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<PAGE>
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.
(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,
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<PAGE>
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 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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<PAGE>
Form of Coupon
The form of Bearer Debenture printed will include interest coupons attached
thereto for all remaining Interest Periods. Each coupon will be in the following
form:
<TABLE>
__________________________________________________________________________ _______________________________ _________________________
<S> <C> <C>
This Coupon is payable to bearer (subject to the Terms and Conditions FIBERCHEM, INC. [1]
endorsed on the Debenture to which this Coupon appertains, which shall
be binding upon the Holder of this Coupon whether or not this Coupon is Coupon for
for the time being attached to such Debenture) at the specified offices of U.S.$_____5
the Paying Agents set out on the reverse hereof (or any other or further By:
Paying Agents or specified offices as may from time to time be notified ......................... due on _________6
to the Debentureholders). If the Debenture to which this Coupon ....
appertains shall have become due and payable before the maturity date
of this Coupon, this Coupon shall become void and no payment shall be
made in respect of it. By:
.........................
....
__________________________________________________________________________ _______________________________ _________________________
</TABLE>
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
________________________________________________________________________________
---------------------------------
(5)Blank will be completed setting out the interest payment that will
due on the specified interest payment date.
(6) The first coupon will set out the next occurring Interest Payment
Date and additional coupons shall be prepared for all remaining interest
periods.
<PAGE>
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
<PAGE>
GLOBAL DEBENTURE
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 [_______________] United States Dollars (U.S.
$[_____________]) (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 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
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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 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
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<PAGE>
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.
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
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<PAGE>
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
(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
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<PAGE>
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 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
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<PAGE>
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 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
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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 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
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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 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
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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.
(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
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<PAGE>
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 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
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<PAGE>
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 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
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<PAGE>
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):
(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
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<PAGE>
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 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.
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<PAGE>
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 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.
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<PAGE>
(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.
(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
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<PAGE>
The Trust Indenture contains provisions for the indemnification of the
Trustee and for its 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.
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 __, 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 ON
REASON FOR OUTSTANDING BEHALF OF THE PRINCIPAL
CHANGE IN THE PRINCIPAL AMOUNT OF THE PAYING AGENT (OTHER THAN IN
OUTSTANDING AMOUNT GLOBAL DEBENTURE RESPECT OF THE INITIAL
DATE PRINCIPAL AMOUNT OF SUCH FOLLOWING SUCH CHANGE PRINCIPAL AMOUNT
OF THIS GLOBAL CHANGE
DEBENTURE(7)
__________________ _______________________ _________________ ______________________________ ________________________________________
<S> <C> <C> <C> <C>
[_______, Not applicable Not [$_________] Not applicable
2000] applicable
__________________ _______________________ _________________ ______________________________ ________________________________________
__________________ _______________________ _________________ ______________________________ ________________________________________
__________________ _______________________ _________________ ______________________________ ________________________________________
__________________ _______________________ _________________ ______________________________ ________________________________________
__________________ _______________________ _________________ ______________________________ ________________________________________
__________________ _______________________ _________________ ______________________________ ________________________________________
__________________ _______________________ _________________ ______________________________ ________________________________________
</TABLE>
----------------------
(7) 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 AND AMOUNT OF INTEREST PAID BEHALF OF THE PRINCIPAL PAYING
PAYABLE AGENT
_______________________ __________________________ __________________________________ ___________________________________________
<S> <C> <C> <C>
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
_______________________ __________________________ __________________________________ ___________________________________________
</TABLE>
<PAGE>
EXHIBIT C
ANNUAL REPORTING CERTIFICATE
To: [Trustee]
THAT, the undersigned duly elected and authorized Chief Financial Officer
of FiberChem, Inc. a Delaware corporation (the "Company"), in compliance with
the Trust Indenture dated as of [____________] (the "Indenture") does hereby
certify that:
(a) attached hereto is a copy of the Annual Report on
Form 10-K for the fiscal year ending September 30,___________.
(b) to the knowledge of the Company, no Default or Event
of Default with respect to any of the Debentures has occurred and is continuing
as of the date of this Certificate.
(c) As of the date hereof, the Company is in compliance
with the requirements of the Indenture and the Debentures.
All terms used and not otherwise defined herein shall have their
respective meanings as set forth in the Indenture.
DATE: _______________
__________________
Chief Financial Officer
<PAGE>
EXHIBIT D
DEBENTUREHOLDER'S CONVERSION NOTICE
[___________________]
DEBENTURES
To: [Conversion Agent]
The undersigned Holder of the12% Senior Debentures (the
"Debentures") in the aggregate principal amount of U.S.$________________
tendered herewith hereby irrevocably exercises the option to convert such
Debenture(s) into shares of Common Stock (this and other capitalised terms
used but not defined herein have the meanings ascribed to such terms in the
Trust Indenture dated as of [_____________], 2000 (the "Indenture")) in
accordance with the terms of the Indenture and directs that the Conversion
Shares issuable and deliverable upon such conversion be issued and delivered
to the undersigned in the name and at the address set forth below.
Provided the Conversion Shares are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act of 1933, as amended (the
"Securities Act"), the undersigned Holder (and any Person to which the
Conversion Shares are to be issued other than the undersigned Holder) hereby
certifies to the Company that it:
(1) either (i) is not a "U.S. person" (as defined in Regulation S
under the United States Securities Act of 1933, as amended (the "Securities
Act")), and is not acquiring the Conversion Shares for the account or benefit of
any U.S. person or (ii) is acquiring the Conversion Shares in a transaction
exempt from the registration requirements of the Securities Act provided by Rule
144 under the Securities Act if applicable;
(2) acknowledges that the Conversion Shares have not been
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the benefit of, U.S. persons except as permitted
below;
(3) understands and agrees that within two years after the date of
original issuance of the Debentures or within three months after it ceases to be
an affiliate (within the meaning of Rule 144 under the Securities Act) of the
Company, the Conversion Shares may be resold, pledged or transferred only (i) to
the Company, (ii) pursuant to offers and sales to non-U.S. persons that occur
outside the United States in a transaction meeting the requirements of Rules 901
through 905 of Regulation S under the Securities Act, (iii) pursuant to an
exemption from the registration requirements of the Securities Act provided by
Rule 144 (if applicable) under the Securities Act, or (iv) 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;
(4) understands and agrees that hedging transactions in the
Conversion Shares are prohibited by Regulation S, unless permitted by the
Securities Act; and
(5) understands that the certificates representing the Conversion
Shares will bear a restrictive legend describing the foregoing restrictions,
unless otherwise agreed by the Company.
<PAGE>
If the Conversion Shares are to be issued in the name of a Person other
than the undersigned, the undersigned Holder will pay all transfer taxes payable
with respect thereto and is delivering herewith a certificate in proper form
certifying that the applicable restrictions on transfer have been complied with.
All terms used and not otherwise defined herein shall have the
respective meanings set forth in the Indenture.
DATE: _______________
___________________________
Name of Holder
___________________________
Signature(s) of Holder
Name(s) for Registration
of Share Certificates (if
different than Holder): ___________________________
___________________________
Signature(s) of such Person
Address for Delivery
of Share Certificates ___________________________
___________________________
___________________________
___________________________
<PAGE>
EXHIBIT E
DESIGNATED INDEBTEDNESS
1. 8% Senior Notes due February 15, 2002; $172,000 outstanding as of June
30 and July 27, 2000
2. Secured Senior Indebtedness as described in this Indenture; no balance
outstanding as of June 30 and July 27, 2000.
3. Loans from Officers, Directors and Affiliates:
Privatbank Vermag AG; five 8% Notes, $50,000 each; due July 15, 2002,
extended to September 29, 2000
Walter Haemmerli; 9% Convertible Note due July 26, 2000; $50,000
G & G Diagnostics, LP II; 9% Convertible Note due July 26, 2002;
$25,000
G & G Diagnostics, LP II; 9% Convertible Note due July 26, 2002;
$25,000
Melvin W. Pelley; 9% Convertible Note due July 27, 2002; $25,000
Melvin W. Pelley; 9% Convertible Note due September 28, 2002; $40,000
Melvin W. Pelley; 12% Convertible Note due January 11, 2003; $200,000
4. Entrenet Group, LLC; 10% subordinated convertible note due April 11,
2001; $126,500; effective upon consummation of the Arrangement
Agreement, July 27, 2000
5. Indebtedness incurred in connection with the issuance of the
Convertible Preferred Stock of the Company, which Preferred Stock is
more fully described in the Placing Agreement of even date herewith by
and between the Company and the Agent.
6. $650,000 of Indebtedness reflected by that certain 12% Senior
Convertible Note issued by the Company and dated on or about July 28,
2000.
7. Additional Indebtedness, which in the aggregate and when included with
the Indebtedness represented by the Debentures, and the Indebtedness
represented by the instruments referenced in paragraphs 5 and 6 above
does not exceed $5 million, provided such additional Indebtedness has
on the whole terms no more favorable to the holders of such
Indebtedness as the terms of the Debentures or the Senior Convertible
Note referenced in paragraph 6 above. Through August [14], such
additional Indebtedness may only be placed using the assistance of the
Agent or a Person approved in writing by Agent.
<PAGE>
EXHIBIT F
PERMITTED SUBSIDIARY INDEBTEDNESS
FCI ENVIRONMENTAL, INC.:
Indebtedness under Accounts Receivable Purchase Agreement dated July 7,
1998, (Silicon Valley Bank) and any extension or renewal thereof. No balance
outstanding as of June 30 and July 27, 2000. This Indebtedness is also
referenced on Exhibit E as the Senior Secured Indebtedness
Deutsche Financial Services; Financing lease agreement; telephone
equipment at Carrollton, Texas; 48 monthly payments of $1,245.80 beginning May
2000
INTREX DATA COMMUNICATIONS CORP:
Advances to and expenses paid on behalf of Intrex by Intrex officers,
directors and affiliates; $360,985 at December 31, 1999.
Harvard Property (Metrocrest) LP; Commercial lease agreement for
facilities Carrollton, Texas; 24 monthly rental payments of $5,812.12 beginning
April 2000
