UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9)
Air & Water Technologies Corporation
------------------------------------
(Name of Issuer)
Class A Common Stock
$.001 par value
---------------
Series A Convertible Exchangeable Preferred Stock
$.01 par value
---------------
(Title of Class of Securities)
009058108
---------
(CUSIP Number)
Compagnie Generale des Eaux
---------------------------
(Name of Persons Filing Statement)
John A. Bick
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Tel. No.: (212) 450-4000
------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
June 14, 1994
-------------
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement
on Schedule 13G to report the acquisition which is the
subject of this Schedule 13D, and is filing this statement
because of Rule 13d-1(b)(3) or (4), check the following: [ ].
Check the following box if a fee is being paid with
this statement: [ ].
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SCHEDULE 13D
______________________________ ________________________________
| | | |
|CUSIP No. 009058108 | | Page __2___ of ______ Pages |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | S. S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | Compagnie Generale des Eaux |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |x| |
| | - |
| | |
| | _ |
| | (b) |_| |
| | |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | WC and 00 |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(E) |_| |
| | |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | France |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | Common Stock: 12,703,475 |
| | | Series A Preferred Stock: 1,200,000 (See |
| | | Item 5) |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | None |
| OWNED BY |____|_______________________________________________|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| REPORTING | | Common Stock: 12,703,475 |
| PERSON | | Series A Preferred Stock: 1,200,000 (See |
| WITH | | Item 5) |
| |____|_______________________________________________|
| | 10 | SHARED DISPOSITIVE POWER |
| | | None |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | Common Stock: 12,703,475 |
| | Series A Preferred Stock: 1,200,000 |
|____|____________________________________________________________________|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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SEC 1746 (9-88) 2 OF
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|----|--------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 47.8% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | CO |
|____|____________________________________________________________________|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 3 of
-4-
Compagnie Generale des Eaux ("Generale des Eaux" or "CGE"),
hereby amends and supplements the report on Schedule 13D,
originally filed on May 23, 1990, as amended (the "Schedule
13D"), with respect to the purchase of shares of Class A
Common Stock, $.001 par value (the "Class A Common Shares"),
and 5 1/2% Series A Convertible Exchangeable Preferred Stock,
$.01 par value (the "Series A Preferred Stock"), of Air &
Water Technologies Corporation (the "Company" or "AWT").
Unless otherwise indicated, each capitalized term
used but not defined herein shall have the meaning assigned
to such term in the Schedule 13D.
Item 1. Security and Company.
The classes of equity securities to which this
statement relates are the Class A Common Shares and the
Series A Preferred Stock of AWT.
Item 2. Identity and Background.
The name of the person filing this statement is
Compagnie Generale des Eaux, which is filing this statement
as a group on behalf of itself and its indirect wholly-owned
subsidiary, Anjou International Company, a Delaware
corporation ("Anjou").
The address of the principal business and office
of Anjou is 1105 North Market Street, Suite 1300, P.O. Box
8985, Wilmington, Delaware 19899. The name, business
address, present principal occupation or employment, and
citizenship of each director and executive officer of Anjou
is set forth on Schedule B hereto.
-5-
Anjou is a holding company for certain interests
of CGE in the United States.
During the last five years, neither Anjou or CGE,
nor any other person controlling Anjou or CGE nor, to the
best of each of Anjou's or CGE's knowledge, any of the
persons listed on Schedule A to the Schedule 13D or on
Schedule B attached hereto, has been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to the Investment Agreement among the
Company, Generale des Eaux and Anjou, dated March 30, 1994
(the "Investment Agreement"), (a) Generale des Eaux
purchased from the Company 1,200,000 shares of the Company's
Series A Preferred Stock for cash consideration of
$60,000,000; and (b) AWT issued to Anjou 6,500,000 shares of
the Class A Common Shares in connection with the acquisition
from Anjou, pursuant to a merger and exchange of shares,
respectively, of its direct, wholly-owned subsidiaries,
Professional Services Group, Inc., a Minnesota corporation
and 2815869 Canada Inc., a Canadian corporation. All cash
-6-
purchases were funded through internally generated funds of
Generale des Eaux.
Item 4. Interest in Securities of the Company.
The response set forth in Item 4 of the Schedule
13D is hereby amended and supplemented by the following
information:
Generale des Eaux intends to review from time to
time the Company's business affairs and financial position,
as well as general economic and industry conditions. Based
on such evaluation and review, Generale des Eaux may
consider from time to time various alternative courses of
action. Subject to the terms of the Investment Agreement
and the requirements of federal securities laws, such
actions may include the acquisition of additional Class A
Common Shares through open market purchases, privately
negotiated transactions, tender offer, exchange offer or
otherwise. Subject to the terms of the Investment Agreement
and the requirements of federal securities laws, Generale
des Eaux may also determine to sell all or a portion of the
Class A Common Shares or the Series A Preferred Stock in the
open market, in privately negotiated transactions, through a
public offering or otherwise. Except as set forth above,
Generale des Eaux has no plan or proposals which relate to
or would result in any of the transactions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Company.
Series A Preferred Stock:
-7-
Pursuant to the terms of the Investment Agreement
and the Certificate of Designation issued by AWT dated as of
June 14, 1994, the Company has issued to CGE 1,200,000
shares of the Series A Preferred Stock, convertible into
4,800,000 shares of Class A Common Shares. The Series A
Preferred Stock is exchangeable for the Company's 5 1/2%
Convertible Subordinated Notes (the "Convertible Debt") with
a maturity of 10 years from the date of issuance of such
notes.
The following is a summary description of certain
conversion, voting, redemption and ranking terms of the
Series A Preferred Stock.
A. CONVERSION
The Series A Preferred Stock and the Convertible
Debt are convertible, in whole or in part, at the option of
the holder, at any time and from time to time, into shares
of Class A Common Shares at a conversion price equal to
$12.50 per share of Class A Common Shares. The ratio at
which the Series A Preferred Stock and Convertible Debt are
convertible into shares of Class A Common Shares is subject
to adjustment (using a weighted average in the case of items
(iii), (iv), (v) and (vi) below so as to preserve the fully
diluted percentage of Class A Common Shares into which the
Series A Preferred Stock and Convertible Debt are
convertible) in the event of: (i) stock dividends, stock
reclassifications or recapitalizations, stock splits,
reverse stock splits and the like; (ii) dividends or other
-8-
distributions of cash or assets or evidence of indebtedness;
(iii) dividends or other distributions of securities or
rights convertible into or exercisable for shares of any
class of common stock of the Company at a price less than
the then conversion price per common share of the Series A
Preferred Stock; (iv) issuance of shares of any class of
common stock of the Company (other than common stock issued
upon conversion of the Series A Preferred Stock, the
Convertible Debt or the Company's 8% Convertible
Subordinated Debentures due May 15, 2015, or pursuant to the
Company's stock option plans or other stock related employee
compensation plans approved by the Board of Directors) at a
price less than the then conversion price per common share
of the Series A Preferred Stock; (v) issuance of securities
or rights convertible into or exercisable for shares of any
class of common stock of the Company at a purchase price
less than the then conversion price per common share of the
Series A Preferred Stock; and (vi) repurchase by the
Company, directly or indirectly, of shares of any class of
common stock at a price in excess of the then conversion
price per common share of the Series A Preferred Stock.
B. REDEMPTION
The Series A Preferred Stock is not redeemable
before June 30, 1997. Between June 30, 1997 and June 30,
2000, the Series A Preferred Stock will be redeemable, in
whole or in part, at the option of the Company on not less
than 30 or more than 60 days' prior written notice. The
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Company may exercise this option during such time period
only if for 20 trading days within any period of 30
consecutive trading days, including the last trading day of
such period, the closing price of the Class A Common Shares
exceeds $18.75, subject to adjustments. After June 30,
2000, the Series A Preferred Stock will be redeemable by the
Company at any time. The same redemption provisions apply
to the Convertible Debt. The redemption price will be
103.85% of the liquidation preference, plus accrued and
unpaid dividends to the date of redemption, after June 30,
1997 and will decrease by .55% each year until it reaches
100% of the liquidation preference, plus accrued and unpaid
dividends to the date of redemption, whereupon it will
remain fixed. The Series A Preferred Stock is a perpetual
preferred stock.
C. VOTING
Holders of Series A Preferred Stock and
Convertible Debt are entitled to vote with the holders of
Class A Common Shares on all matters submitted for vote of
holders of Class A Common Shares, and are entitled to that
number of votes equal to the number of votes to which the
shares of Class A Common Shares issuable upon conversion of
such shares of Series A Preferred Stock and Convertible Debt
would have been entitled if such shares of Class A Common
Shares had been outstanding at the time of the applicable
vote and related record date. In addition, the Series A
Preferred Stock and Convertible Debt will vote separately as
-10-
a class on any amendments to the Restated Certificate of
Incorporation or By-Laws of the Company, whether by merger,
consolidation, combination, reclassification or otherwise,
which would alter or circumvent the voting powers, rights
and preferences of the Series A Preferred Stock or
Convertible Debt. No amendment or alteration of the
dividends payable, liquidation preference or par value of
the Series A Preferred Stock, or interest rate and principal
amount of the Convertible Debt, may be effected without the
consent of each holder of Series A Preferred Stock or
Convertible Debt, respectively.
D. RANKING
The Series A Preferred Stock will, with respect to
dividend rights and rights on liquidation, winding up and
dissolution, rank prior to all classes of the Company's
equity securities, including the Class A Common Shares. The
Convertible Debt will be subordinated to the Company's
senior debt and senior subordinated debt.
_____________________
(a) As a result of the consummation of the
Investment Agreement, Generale des Eaux, directly and
through Anjou, beneficially owns 12,703,475 shares of the
Class A Common Shares and 1,200,000 shares of the Series A
Preferred Stock, which are convertible into 4,800,000 shares
of the Class A Common Shares. The aggregate of the Class A
Common Shares and the shares of the Series A Preferred Stock
upon conversion beneficially owned by Generale des Eaux
-11-
would represent approximately 47.8% of the Class A Common
Shares.
As a result of the consummation of the Investment
Agreement, Anjou beneficially owns 6,500,000 Class A Common
Shares, representing 17.8% of the outstanding Class A Common
Shares.
Except as set forth in this Item 5(a), neither
Generale des Eaux, nor Anjou nor any other person
controlling each of the companies, nor, to the best of their
respective knowledge, any persons named in Schedule A to the
Schedule 13D or Schedule B to this Amendment, owns
beneficially any Class A Common Shares.
(b) By virtue of Anjou being an indirect wholly-
owned subsidiary of Generale des Eaux, Generale des Eaux may
be deemed to have the sole power to vote or to direct the
vote, or to dispose or direct the disposition of 12,703,475
shares of outstanding Class A Common Shares and 4,800,000
votes to which the Series A Preferred Stock is entitled.
(c) See Item 3 above.
(d) Inapplicable
(e) Inapplicable
Item 6. Contracts, Arrangements, Understandings
or Relationships with Respect to Securities
of the Company
The response set forth in Item 6 of the Schedule
13D is hereby amended and supplemented as follows:
On June 14, 1994, the transactions contemplated by
the Investment Agreement were consummated.
-12-
Item 7. Material to Be Filed As Exhibits
Exhibit 99.2: Certificate of Designation for the 5 1/2%
Series A Convertible Exchangeable
Preferred Stock dated as of June 14,
1994 of AWT.
-13-
SIGNATURES
After reasonable inquiry and to the best knowledge
and belief of the undersigned, the undersigned certifies
that the information set forth in this statement is true,
complete and correct.
Dated: June 15, 1994
COMPAGNIE GENERALE DES EAUX
By: /s/ Jacques-Henri David
------------------------
Jacques-Henri David
Directeur General
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Exhibit Index
Exhibit 99.2: Certificate of Designation for the 5 1/2%
Series A Convertible Exchangeable
Preferred Stock dated as of June 14,
1994 of AWT.
-15-
Schedule B
DIRECTORS AND EXECUTIVE OFFICERS OF ANJOU INTERNATIONAL COMPANY
The name, business address, title, present principal
occupation or employment of each of the directors and executive
officers of Anjou International Company are set forth below. If
no business address is given the director's or officer's business
address is Anjou International Company, 1105 North Market Street,
Suite 1300, P.O. Box 8985, Wilmington, Delaware 19899. Unless
otherwise indicated, each occupation set forth opposite an
individual's name refers to Anjou International Company. Unless
otherwise indicated, the persons listed below are citizens of
France.
PRESENT PRINCIPAL OCCUPATION
INCLUDING NAME AND ADDRESS*
NAME AND BUSINESS ADDRESS OF EMPLOYER
- ------------------------- -----------------------------
Directors
Guy Dejouany. . . . . . . . . Chairman of the Board, Anjou
Compagnie Generale des Eaux International Company
52 Rue d'Anjou
75384 Paris, France Chairman of the Board and
Chief Executive Officer,
Compagnie Generale des Eaux
Claudio Elia. . . . . . . . . President & Chief Executive Officer,
Anjou International Company
Nationality: United States
* Same address as director's or officer's business
address except where indicated.
-16-
PRESENT PRINCIPAL OCCUPATION
INCLUDING NAME AND ADDRESS**
NAME AND BUSINESS ADDRESS OF EMPLOYER
- ------------------------- -----------------------------
Bernard Forterre. . . . . . . Directeur General Adjoint, Compagnie
Compagnie Generale des Eaux Generale des Eaux
52 Rue d'Anjou
75384 Paris, France
Jean-Dominique Deschamps. . . Directeur General Adjoint, Compagnie
Compagnie Generale des Eaux Generale des Eaux
52 Rue d'Anjou
75384 Paris, France
Executive Officers (Who Are Not Directors)
John T. Kelly . . . . . . . . Vice President, Secretary and
Treasurer
Nationality - United States
Christian G. Farman . . . . . Vice President, Assistant Secretary,
Assistant Treasurer and Controller
Nationality - United States
** Same address as director's or officer's business
address except where indicated.
-17-
EXHIBIT 99.2
[Conformed Copy]
AIR & WATER TECHNOLOGIES CORPORATION
CERTIFICATE OF DESIGNATION
5 1/2% SERIES A CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
($0.01 par value)
We, the undersigned, William R. Lewis and Douglas
A. Satzger of Air & Water Technologies Corporation, a
Delaware corporation (hereinafter called the "Corporation"),
pursuant to the provisions of Sections 103 and 151 of the
General Corporation Law of the State of Delaware do hereby
make this Certificate of Designation under the corporate
seal of the Corporation and do hereby state and certify that
pursuant to the authority expressly vested in the Board of
Directors of the Corporation by the Certificate of
Incorporation, the Board of Directors duly adopted the
following resolutions:
RESOLVED, that, pursuant to Article Fourth of the
Certificate of Incorporation (which authorizes 2,500,000
shares of Preferred Stock, $0.01 par value, none of which
are presently issued and outstanding), the Board of
Directors hereby fixes the voting powers, designation and
preferences and relative participating, optional and other
special rights, and qualifications, limitations and
restrictions of a class of Preferred Stock.
RESOLVED, that each share of the Convertible
Exchangeable Preferred Stock shall rank equally in all
respects and shall be subject to the following provisions:
(1) Number and Designation. 1,200,000 shares of
the Preferred Stock of the Corporation shall be designated
as 5 1/2% Series A Convertible Exchangeable Preferred Stock
(the "Series A Preferred Stock").
(2) Rank. The Series A Preferred Stock shall,
with respect to dividend rights and rights on liquidation,
winding up and dissolution, rank prior to all classes or
series of equity securities of the Corporation, including
the Common Stock (as defined below).
(3) Dividends. (a) Except as otherwise provided
in paragraph (8) below, the holders of the shares of Series
A Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors, out of funds legally
available for the payment of dividends, cumulative
dividends, at the annual rate of $2.75 per share, payable in
cash quarterly in arrears in equal amounts on March 31, June
30, September 30 and December 31 of each year, commencing
June 30, 1994, unless such day is not a business day, in
which event on the next succeeding business day (each of
such dates being a "Dividend Payment Date"), in preference
to dividends on the Common Stock. Such dividends shall be
paid to the holders of record at the opening of business on
the record date for such Dividend Payment Date.
(b) Dividends shall accrue from the date of
original issue of the Series A Preferred Stock (the "Series
A Initial Issuance Date"). Dividends, other than for a full
quarterly period, shall accrue on the basis of a year of 365
days and the actual number of days elapsed (including the
first day but excluding the last day of such period).
Quarterly dividends which are not paid in full in cash will
cumulate without interest until such accumulated quarterly
dividends shall have been declared and paid in cash by the
Board of Directors of the Corporation. Any such declaration
may be for a portion, or all, of the then accumulated
dividends. Any accumulated dividends which are not paid
will continue to cumulate in the manner described above.
(c)(i) The holders of the shares of the Series A
Preferred Stock shall be entitled to receive in preference
to and in priority over dividends upon any of the Common
Stock all accrued dividends provided for in this paragraph
(3).
(ii) The Corporation shall not declare, pay or
set apart for payment any dividend on any of the Common
Stock or make any distribution in respect thereof, either
directly or indirectly, and whether in cash, obligations or
shares of the Corporation or other property (all such
dividends and distributions hereinafter referred to as a
"Common Stock Distribution"), unless the holders of the
shares of Series A Preferred Stock shall have received all
accrued dividends which such holders are entitled to receive
pursuant to paragraph (3) through and including the
immediately preceding Dividend Payment Date or, if such
Common Stock Distribution is made on a Dividend Payment
Date, through and including such Dividend Payment Date. In
no event may the Corporation retire, redeem, purchase or
otherwise acquire for value (including acquiring, directly
or indirectly, any equity interest in any Person which owns,
legally or beneficially, any Common Stock) any of the Common
Stock or make any payment on account of or set apart for
payment money for a sinking or other similar fund for the
purchase, redemption or other retirement of, any of the
Common Stock, or permit any corporation or other entity
directly or indirectly controlled by the Corporation to
2
purchase or redeem any of the Common Stock unless, prior to
or contemporaneously with such retirement, redemption,
purchase or acquisition, the holders of the shares of Series
A Preferred Stock shall have received all accrued dividends
which such holders are entitled to receive pursuant to
paragraph (3) through and including the immediately
preceding Dividend Payment Date or, if such retirement,
redemption, purchase or acquisition is made on a Dividend
Payment Date, through and including such Dividend Payment
Date.
(d) Subject to the foregoing provisions of this
paragraph (3), paragraph (8) and applicable law, the Board
of Directors may declare and the Corporation may pay or set
apart for payment dividends on any of the Common Stock, may
make any payment on account of or set apart for payment
money for a sinking fund or other similar fund for the
purchase, redemption or other retirement of, any of the
Common Stock, and may make any distribution in respect
thereof, either directly or indirectly, and whether in cash,
obligations or shares of the Corporation or other property,
and may purchase or otherwise redeem any of the Common Stock
and the holders of the shares of the Series A Preferred
Stock shall not be entitled to share therein.
(e) All dividends paid with respect to shares of
the Series A Preferred Stock pursuant to the foregoing
provisions of this paragraph (3) shall be paid pro rata on
each outstanding share of Series A Preferred Stock.
(f) Each fractional share of Series A Preferred
Stock outstanding shall be entitled to a ratably
proportionate amount of all dividends accruing with respect
to each outstanding share of Series A Preferred Stock
pursuant to this paragraph (3), and all such dividends with
respect to such outstanding fractional shares shall be fully
cumulative and shall accrue (whether or not declared)
without interest, and shall be payable in the same manner
and at such times as provided for in the foregoing
provisions of this paragraph (3) with respect to dividends
on each outstanding share of Series A Preferred Stock.
(4) Liquidation Preference. (a) In the event of
any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the holders of
the shares of Series A Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders
an amount in cash equal to $50 for each share outstanding,
plus an amount in cash equal to all accrued but unpaid
dividends thereon to the date fixed for liquidation,
dissolution or winding up (including pro rata dividends for
the period from the last Dividend Payment Date to the date
fixed for liquidation, dissolution or winding up), whether
3
or not declared to the date of such payment, before any
payment shall be made or any assets distributed to the
holders of any of the Common Stock. If the assets of the
Corporation, or the proceeds thereof, are not sufficient to
pay in full the liquidation payments payable on each
outstanding share of Series A Preferred Stock, then each
such share shall share ratably in such distribution of
assets, or the proceeds thereof, in accordance with the
amount which would be payable on such distribution if the
amount to which each outstanding share of Series A Preferred
Stock is entitled was paid in full. Except as provided in
the preceding sentences, the holders of the shares of Series
A Preferred Stock shall not be entitled to any distribution
in the event of liquidation, dissolution or winding up of
the affairs of the Corporation.
(b) For the purposes of this paragraph (4),
neither the voluntary sale, lease, or other transfer of all
or substantially all the property or assets of the
Corporation nor the consolidation or merger of the
Corporation with or into one or more other Persons shall be
deemed to be a liquidation, dissolution or winding up of the
Corporation.
(c) The liquidation payment with respect to each
outstanding fractional share of Series A Preferred Stock
shall be equal to a ratably proportionate amount of the
liquidation payment with respect to each outstanding share
of Series A Preferred Stock.
(5) Redemption. Shares of Series A Preferred
Stock shall be redeemable by the Corporation as provided
below (with all references in this paragraph (5) to a
redemption price per share to be adjusted proportionally in
respect of fractional shares).
(a) The shares of Series A Preferred Stock shall
not be redeemable prior to the Initial Redemption Date. The
"Initial Redemption Date" shall be June 30, 1997.
(b) At the option of the Corporation, shares of
Series A Preferred Stock may be redeemed at any time or from
time to time (subject to the provisions set forth below and
paragraph (8)) on or after the Initial Redemption Date, in
whole or in part, at the price (the "Redemption Price"),
payable in cash, equal to the percentage set forth below of
the liquidation preference per share for redemptions during
the 12-month periods beginning on the Initial Redemption
Date or the annual anniversaries thereof indicated below,
plus, in each case, an amount equal to accrued and unpaid
dividends thereon (whether or not declared and whether or
not there are funds of the Corporation legally available for
4
the payment of dividends), to the date fixed for redemption:
12-month period beginning on Percentage
---------------------------- ----------
Initial Redemption Date 103.85%
First Anniversary thereof 103.30%
Second Anniversary thereof 102.75%
Third Anniversary thereof 102.20%
Fourth Anniversary thereof 101.65%
Fifth Anniversary thereof 101.10%
Sixth Anniversary thereof 100.55%
Seventh Anniversary thereof
and thereafter 100.00%
Notwithstanding the foregoing, the Corporation may elect to
redeem shares of Series A Preferred Stock at any time on or
after the Initial Redemption Date and prior to the fourth
anniversary of the Initial Redemption Date only if for at
least 20 Trading Days during the period consisting of the 30
consecutive Trading Days ending on the date notice of such
redemption is given, including the last Trading Day of such
period, the Closing Price per share of Common Stock exceeds
$18.75, as adjusted pursuant to paragraph (8)(h) (the
"Redemption Threshold").
(c) In the event that fewer than all of the
shares of Series A Preferred Stock are to be redeemed
pursuant to this paragraph (5), the Corporation shall call
for redemption shares of Series A Preferred Stock pro rata
among the holders, based on the number of shares of Series A
Preferred Stock held by each holder, except that the
Corporation may redeem all of the shares of Series A
Preferred Stock held by any holders of fewer than 100 shares
of Series A Preferred Stock (or all the shares of Series A
Preferred Stock held by holders who would hold less than 100
shares of Series A Preferred Stock as a result of such
redemption). Any redemption for which shares are called for
redemption on a pro rata basis (whether or not some of the
shares so called are subsequently converted pursuant to
paragraph (8)) shall comply with this paragraph (5)(c).
(d) In accordance with paragraph (7) hereof, the
Corporation shall mail to the record holders of Series A
Preferred Stock written notice of its intention to redeem
shares of Series A Preferred Stock held by such holders.
(6) Exchange. Subject to paragraph (8) below,
commencing June 30, 1997, the Series A Preferred Stock shall
be exchangeable, in whole and not in part, at the sole
option of the Corporation, at any time, for the
Corporation's 5 1/2% Convertible Subordinated Notes, a form of
5
which is attached hereto as Attachment A (the "Exchange
Notes"). The holders of the outstanding shares or
fractional shares of Series A Preferred Stock will be
entitled to receive in exchange for each share of Series A
Preferred Stock to be exchanged by it Exchange Notes in a
principal amount of $50 plus, with respect to each
outstanding fractional share, a ratably proportionate amount
thereof. An amount equal to all accrued but unpaid
dividends on each such share to the date which coincides
with the date of exchange shall be paid on such date
(including pro rata dividends for the period from the last
Dividend Payment Date to the date of exchange). At the time
of any exchange hereunder, the rights of the holders of the
shares of Series A Preferred Stock as stockholders of the
Corporation shall cease, and the persons entitled to receive
the Exchange Notes issuable upon exchange shall be treated
for all purposes as the registered holders of such Exchange
Notes as of the date which coincides with the date of
exchange. In accordance with paragraph (7) hereof, the
Corporation shall mail to the record holders of Series A
Preferred Stock written notice of its intention to exchange
shares of Series A Preferred Stock held by such holders.
The Corporation will cause the Exchange Notes to be dated
the date which coincides with the date of exchange thereof.
(7) Procedure for Redemption or Exchange. (a)
In the event the Corporation shall redeem or exchange shares
of Series A Preferred Stock, notice of such redemption or
exchange shall be given by first class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days
prior to the redemption or exchange date, to the holders of
record of the shares to be redeemed or exchanged at such
holder's address as the same appears on the stock register
of the Corporation. Each such notice shall state: (i) the
redemption or exchange date; (ii) the redemption price or
exchange rate; (iii) the place or places where certificates
for such shares are to be surrendered for payment of the
redemption price or exchange for the Exchange Notes; (iv)
that dividends on the shares to be redeemed or exchanged
will cease to accrue on such redemption date or the date of
exchange; and (v) the number of shares to be redeemed or
exchanged.
(b) Notice having been mailed as aforesaid, from
and after the redemption date or as of the exchange date
(unless, in the case of a redemption, default shall be made
by the Corporation in providing money for the payment of the
redemption price or a Notice of Election to Convert has been
delivered to the Corporation pursuant to paragraph (8)),
dividends on the shares of Series A Preferred Stock shall
cease to accrue, and such shares shall no longer be deemed
to be outstanding and shall be cancelled and shall not be
available for reissue or redesignation, and all rights of
6
the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the
redemption price or the Exchange Notes and any other amounts
payable pursuant to paragraph (5) or paragraph (6)) shall
cease. Upon surrender in accordance with said notice of the
certificates for any shares so redeemed or exchanged
(properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice
shall so state), such shares shall be redeemed or exchanged
by the Corporation at the redemption price or exchange rate
aforesaid.
(c) The Corporation shall pay any and all
issuance and delivery taxes that may be payable in respect
of the issuance or delivery of Exchange Notes in exchange
for shares of Series A Preferred Stock. The Corporation
shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issuance
and delivery of Exchange Notes in a name other than that in
which the shares of Series A Preferred Stock so exchanged
were registered, and no such issuance or delivery shall be
made unless and until the person requesting such issuance
has paid to the Corporation the amount of any such tax or
has established to the satisfaction of the Corporation that
such tax has been paid.
(8) Conversion. (a) Subject to the provisions
of this paragraph (8), the holders of the shares of Series A
Preferred Stock shall have the right, at any time, from time
to time, at such holder's option, to convert any or all
outstanding shares (and fractional shares) of Series A
Preferred Stock, in whole or in part, into fully paid and
non-assessable shares of Common Stock. The number of shares
of Common Stock deliverable upon conversion of a share of
Series A Preferred Stock, adjusted as hereinafter provided,
is referred to herein as the "Conversion Ratio." The
Conversion Ratio as of the Series A Initial Issuance Date
shall be 4.0, subject to adjustment from time to time
pursuant to paragraph (8)(g) hereof. Notwithstanding any
call for redemption pursuant to paragraph (5) or exchange
pursuant to paragraph (6), the right to convert shares so
called for redemption or exchange shall terminate at the
close of business on the date immediately preceding the date
fixed for such redemption or exchange, as the case may be,
unless the Corporation shall default in making payment of
the amount payable upon such redemption or in making the
exchange and payment of any amount payable upon such
exchange.
(b)(i) In order to exercise the conversion
privilege, the holder of the shares of Series A Preferred
Stock to be converted shall surrender the certificate
representing such shares at the office of the Corporation,
7
specifying the number of shares of Series A Preferred Stock
to be converted. Unless the shares issuable on conversion
are to be issued in the same name as the name in which such
shares of Series A Preferred Stock are registered, each
share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or the holder's
duly authorized attorney and an amount sufficient to pay any
transfer or similar tax.
(ii) As promptly as practicable after the
surrender by the holder of the certificates for shares of
Series A Preferred Stock as aforesaid, the Corporation shall
issue and shall deliver to such holder, or on the holder's
written order to the holder's transferee, a certificate or
certificates for the whole number of shares of Common Stock
issuable upon the conversion of such shares in accordance
with the provisions of this paragraph (8).
(iii) Each conversion shall be deemed to have been
effected immediately prior to the close of business on the
date on which the certificates for shares of Series A
Preferred Stock shall have been surrendered and such notice
received by the Corporation as aforesaid, and the person in
whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder of
record of the shares of Common Stock represented thereby at
such time on such date and such conversion shall be into a
number of shares of Common Stock equal to the product of the
number of shares of Series A Preferred Stock surrendered
times the Conversion Ratio in effect at such time on such
date. All shares of Common Stock delivered upon conversion
of the Series A Preferred Stock will upon delivery be duly
and validly issued and fully paid and non-assessable, free
of all liens and charges and not subject to any preemptive
rights. Upon the surrender of certificates representing
shares of Series A Preferred Stock, such shares shall no
longer be deemed to be outstanding and all rights of a
holder with respect to such shares surrendered for
conversion shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant
to this paragraph (8).
(c)(i) Upon delivery to the Corporation by a
holder of shares of Series A Preferred Stock of a notice of
election to convert, the right of the Corporation to redeem
such shares of Series A Preferred Stock shall terminate,
regardless of whether a notice of redemption has been mailed
as aforesaid.
(ii) From the date of delivery by a holder of
shares of Series A Preferred Stock of such conversion
8
notice, in lieu of dividends on such Series A Preferred
Stock pursuant to paragraph (3), such Series A Preferred
Stock shall participate equally and ratably with the holders
of shares of Common Stock in all dividends paid on the
Common Stock as if such shares of Series A Preferred Stock
had been converted to shares of Common Stock at the time of
such delivery.
(iii) If a conversion notice is delivered by a
holder of shares of Series A Preferred Stock to the
Corporation before the delivery by the Corporation to such
holder of a notice of redemption, such holder shall be
entitled to receive all accrued dividends which such holder
is entitled to receive pursuant to paragraph (3). In
addition, such holder at the opening of business on a
Dividend Payment Date shall be entitled to receive the
dividend payable on such shares on such Dividend Payment
Date notwithstanding the Corporation's default in payment of
the dividend due on such Dividend Payment Date. Such
dividends shall be in preference to and in priority over any
dividends on the Common Stock.
(iv) If, after receipt by a holder of shares of
Series A Preferred Stock of a notice of redemption pursuant
to paragraph (5), such holder delivers to the Corporation a
conversion notice, such Series A Preferred Stock shall cease
to accrue dividends pursuant to paragraph (3) but such
shares shall continue to be entitled to receive all accrued
dividends which such holder is entitled to receive pursuant
to paragraph (3) through the date of delivery of such
conversion notice (including pro rata dividends for the
period from the last Dividend Payment Date to the date of
delivery of the conversion notice) in preference to and in
priority over any dividends on the Common Stock. Such
accrued dividends shall be payable to such holder when, as
and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, as provided
in paragraph (3) above.
(v) Except as provided above and in paragraph
(8)(g), the Corporation shall make no payment or adjustment
for accrued and unpaid dividends on shares of Series A
Preferred Stock, whether or not in arrears, on conversion of
such shares or for dividends in cash on the shares of Common
Stock issued upon such conversion.
(d)(i) The Corporation covenants that it will at
all times reserve and keep available, free from preemptive
rights, such number of its authorized but unissued shares of
Common Stock as shall be required for the purpose of
effecting conversions of the Series A Preferred Stock and
Exchange Notes.
9
(ii) Prior to the delivery of any securities
which the Corporation shall be obligated to deliver upon
conversion of the Series A Preferred Stock, the Corporation
shall comply with all applicable federal and state laws and
regulations which require action to be taken by the
Corporation.
(e) The Corporation will pay any and all
documentary stamp or similar issue or transfer taxes payable
in respect of the issue or delivery of shares of Common
Stock on conversion of the Series A Preferred Stock pursuant
hereto; provided, that the Corporation shall not be required
to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of shares of
Common Stock in a name other than that of the holder of the
Series A Preferred Stock to be converted and no such issue
or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the
Corporation the amount of any such tax or has established,
to the satisfaction of the Corporation, that such tax has
been paid.
(f) In connection with the conversion of any
shares of Series A Preferred Stock, no fractions of shares
of Common Stock shall be issued, but in lieu thereof the
Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional
interest multiplied by the Daily Price per share of Common
Stock on the Trading Day on which such shares of Series A
Preferred Stock are deemed to have been converted. If more
than one share of Series A Preferred Stock shall be
surrendered for conversion by the same holder (or Affiliate
of such holder) at the same time, the number of full shares
of Common Stock issuable on conversion thereof shall be
computed on the basis of the total number of shares of
Series A Preferred Stock so surrendered.
(g)(i) In case the Corporation shall at any time
after the Series A Initial Issuance Date (I) declare a
dividend or make a distribution on Common Stock payable in
Common Stock, (II) subdivide or split the outstanding Common
Stock, (III) combine or reclassify the outstanding Common
Stock into a smaller number of shares, (IV) issue any shares
of its capital stock in a reclassification of Common Stock
(including any such reclassification in connection with a
consolidation or merger in which the Corporation is the
continuing corporation), or (V) consolidate with, or merge
with or into, any other Person, the Conversion Ratio in
effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision,
split, combination, consolidation, merger or
reclassification shall be proportionately adjusted so that
the conversion of the Series A Preferred Stock after such
10
time shall entitle the holder to receive the aggregate
number of shares of Common Stock or other securities of the
Corporation (or shares of any security into which such
shares of Common Stock have been combined, consolidated,
merged or reclassified pursuant to clause (III), (IV) or (V)
above) which, if this Series A Preferred Stock had been
converted immediately prior to such time, such holder would
have owned upon such conversion and been entitled to receive
by virtue of such dividend, distribution, subdivision,
split, combination, consolidation, merger or
reclassification, assuming such holder of Common Stock of
the Corporation (x) is not a Person with which the
Corporation consolidated or into which the Corporation
merged or which merged into the Corporation or to which such
recapitalization, sale or transfer was made, as the case may
be ("constituent Person"), or an affiliate of a constituent
Person and (y) failed to exercise any rights of election as
to the kind or amount of securities, cash and other property
receivable upon such reclassification, change,
consolidation, merger, recapitalization, sale or transfer
(provided, that if the kind or amount of securities, cash
and other property receivable upon such reclassification,
change, consolidation, merger, recapitalization, sale or
transfer is not the same for each share of Common Stock of
the Corporation held immediately prior to such
reclassification, change, consolidation, merger,
recapitalization, sale or transfer by other than a
constituent Person or an affiliate thereof and in respect of
which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this
subparagraph (g) the kind and amount of securities, cash and
other property receivable upon such reclassification,
change, consolidation, merger, recapitalization, sale or
transfer by each non-electing share shall be deemed to be
the kind and amount so receivable per share by a plurality
of the non-electing shares). Such adjustment shall be made
successively whenever any event listed above shall occur.
(ii) In case the Corporation shall issue or sell
any Common Stock (other than Common Stock issued (I) upon
conversion of the Series A Preferred Stock, the Exchange
Notes or the 8% Convertible Subordinated Debentures due May
15, 2015, (II) pursuant to the Corporation's Stock Option
Plans or pursuant to any other Common Stock related employee
compensation plan of the Corporation approved by the
Corporation's Board of Directors or (III) upon exercise or
conversion of any security the issuance of which caused an
adjustment under paragraphs (g)(iii) or (g)(iv) hereof)
without consideration or for a consideration per share less
than the then Conversion Price Per Common Share (as defined
in paragraph (g)(vi)), the Conversion Ratio to be in effect
after such issuance or sale shall be determined by
multiplying the Conversion Ratio in effect immediately prior
11
to such issuance or sale by a fraction, (A) the numerator of
which shall be the product of the aggregate number of shares
of Common Stock outstanding immediately after such issuance
or sale and the Current Valuation Per Common Share (as
defined in paragraph (g)(vi)) immediately prior to such
issuance or sale and (B) the denominator of which shall be
the sum of (x) the number of shares of Common Stock
outstanding immediately prior to the time of such issuance
or sale multiplied by the Current Valuation Per Common Share
immediately prior to such issuance or sale and (y) the
aggregate consideration, if any, to be received by the
Corporation upon such issuance or sale. In case any portion
of the consideration to be received by the Corporation shall
be in a form other than cash, the fair market value of such
noncash consideration shall be utilized in the foregoing
computation. Such fair market value shall be determined by
the Board of Directors of the Corporation; provided that if
the holders of 25% of the Series A Preferred Stock shall
object to any such determination, the Board of Directors
shall retain an independent appraiser reasonably
satisfactory to such holders to determine such fair market
value. The holders shall be notified promptly of any
consideration other than cash to be received by the
Corporation and furnished with a description of the
consideration and the fair market value thereof, as
determined by the Board of Directors.
(iii) In case the Corporation shall fix a record
date for the issuance of rights, options or warrants to the
holders of its Common Stock or other securities entitling
such holders to subscribe for or purchase shares of Common
Stock (or securities convertible into shares of Common
Stock) at a price per share of Common Stock (or having a
conversion price per share of Common Stock, if a security
convertible into shares of Common Stock) less than the then
Conversion Price Per Common Share on such record date, the
maximum number of shares of Common Stock issuable upon
exercise of such rights, options or warrants (or conversion
of such convertible securities) shall be deemed to have been
issued and outstanding as of such record date and the
Conversion Ratio shall be adjusted pursuant to paragraph
(g)(ii) hereof, as though such maximum number of shares of
Common Stock had been so issued for an aggregate
consideration payable by the holders of such rights,
options, warrants or convertible securities prior to their
receipt of such shares of Common Stock. In case any portion
of such consideration shall be in a form other than cash,
the fair market value of such noncash consideration shall be
determined as set forth in paragraph (g)(ii) hereof. Such
adjustment shall be made successively whenever such record
date is fixed; and in the event that such rights, options or
warrants are not so issued or expire unexercised, or in the
event of a change in the number of shares of Common Stock to
12
which the holders of such rights, options or warrants are
entitled (other than pursuant to adjustment provisions
therein comparable to those contained in this paragraph
(g)), the Conversion Ratio shall again be adjusted to be the
Conversion Ratio which would then be in effect if such
record date had not been fixed, in the former event, or the
Conversion Ratio which would then be in effect if such
holder had initially been entitled to such changed number of
shares of Common Stock, in the latter event.
(iv) In case the Corporation shall issue rights,
options (other than options issued pursuant to a plan
described in clause II of paragraph (g)(ii)) or warrants
entitling the holders thereof to subscribe for or purchase
Common Stock (or securities convertible into shares of
Common Stock) or shall issue convertible securities, and the
price per share of Common Stock of such rights, options,
warrants or convertible securities (including, in the case
of rights, options or warrants, the price at which they may
be exercised) is less than the then Conversion Price Per
Common Share, the maximum number of shares of Common Stock
issuable upon exercise of such rights, options or warrants
or upon conversion of such convertible securities shall be
deemed to have been issued and outstanding as of the date of
such sale or issuance, and the Conversion Ratio shall be
adjusted pursuant to paragraph (g)(ii) hereof as though such
maximum number of shares of Common Stock had been so issued
for an aggregate consideration equal to the aggregate
consideration paid for such rights, options, warrants or
convertible securities and the aggregate consideration
payable by the holders of such rights, options, warrants or
convertible securities prior to their receipt of such shares
of Common Stock. In case any portion of such consideration
shall be in a form other than cash, the fair market value of
such noncash consideration shall be determined as set forth
in paragraph (g)(ii) hereof. Such adjustment shall be made
successively whenever such rights, options, warrants or
convertible securities are issued; and in the event that
such rights, options or warrants expire unexercised, or in
the event of a change in the number of shares of Common
Stock to which the holders of such rights, options, warrants
or convertible securities are entitled (other than pursuant
to adjustment provisions therein comparable to those
contained in this paragraph (g)), the Conversion Ratio shall
again be adjusted to be the Conversion Ratio which would
then be in effect if such rights, options, warrants or
convertible securities had not been issued, in the former
event, or the Conversion Ratio which would then be in effect
if such holders had initially been entitled to such changed
number of shares of Common Stock, in the latter event. No
adjustment of the Conversion Ratio shall be made pursuant to
this paragraph (g)(iv) to the extent that the Conversion
Ratio shall have been adjusted pursuant to paragraph
13
(g)(iii) upon the setting of any record date relating to
such rights, options, warrants or convertible securities and
such adjustment fully reflects the number of shares of
Common Stock to which the holders of such rights, options,
warrants or convertible securities are entitled and the
price payable therefor.
(v) In case the Corporation shall fix a record
date for the making of a distribution to holders of Common
Stock (including any such distribution made in connection
with a consolidation or merger in which the Corporation is
the continuing corporation) of evidences of indebtedness,
assets or other property (other than dividends payable in
Common Stock or rights, options or warrants referred to in,
and for which an adjustment is made pursuant to, paragraph
(g)(iii) hereof), the Conversion Ratio to be in effect after
such record date shall be determined by multiplying the
Conversion Ratio in effect immediately prior to such record
date by a fraction, (A) the numerator of which shall be the
Current Valuation Per Common Share on such record date, and
(B) the denominator of which shall be the Current Valuation
Per Common Share on such record date, less the fair market
value (determined as set forth in paragraph (g)(ii) hereof)
of the portion of the assets, other property or evidence of
indebtedness so to be distributed which is applicable to one
share of Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in
the event that such distribution is not so made, the
Conversion Ratio shall again be adjusted to be the
Conversion Ratio which would then be in effect if such
record date had not been fixed.
(vi) For the purpose of any computation under
paragraph (f) or paragraphs (g)(ii), (iii), (iv) or (v)
hereof, on any determination date, (I) the "Current
Valuation Per Common Share" shall be the greater of the
Current Market Price Per Common Share and the Conversion
Price Per Common Share (each as defined below), (II) the
"Current Market Price Per Common Share" shall be deemed to
be the average (weighted by daily trading volume) of the
Daily Prices (as defined below) per share of the applicable
class of Common Stock for the 20 consecutive trading days
immediately prior to such date, (III) the "Conversion Price
Per Common Share" shall be deemed to be the amount in
dollars which is equal to $50 divided by the Conversion
Ratio immediately prior to such adjustment, and (IV) "Daily
Price" means (1) if the shares of such class of Common Stock
then are listed and traded on the American Stock Exchange,
Inc. ("AMEX"), the closing price on such day as reported on
the AMEX Composite Transactions Tape; (2) if the shares of
such class of Common Stock then are not listed and traded on
the AMEX, the closing price on such day as reported by the
principal national securities exchange on which the shares
14
are listed and traded; (3) if the shares of such class of
Common Stock then are not listed and traded on any such
securities exchange, the last reported sale price on such
day on the National Market of the National Association of
Securities Dealers, Inc. Automated Quotation System
("NASDAQ"); or (4) if the shares of such class of Common
Stock then are not traded on the NASDAQ National Market, the
average of the highest reported bid and lowest reported
asked price on such day as reported by NASDAQ. For purposes
of any computation under this paragraph (g), the number of
shares of Common Stock outstanding at any given time shall
not include shares owned or held by or for the account of
the Corporation.
(vii) No adjustment to the Conversion Ratio
pursuant to paragraphs (g)(ii), (iii), (iv) and (v) above
shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Conversion Ratio;
provided however, that any adjustments which by reason of
this paragraph (g)(vii) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations under this paragraph (g) shall
be made to the nearest four decimal points.
(viii) In the event that, at any time as a result
of the provisions of this paragraph (g), the holder of this
Series A Preferred Stock upon subsequent conversion shall
become entitled to receive any shares of capital stock of
the Corporation other than Common Stock, the number of such
other shares so receivable upon conversion of this Series A
Preferred Stock shall thereafter be subject to adjustment
from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained
herein.
(h) Whenever an adjustment is made to the
Conversion Ratio pursuant to paragraph (8)(g), the
Redemption Threshold shall be adjusted by multiplying the
Redemption Threshold by the Conversion Ratio in effect
immediately prior to such adjustment and dividing such
product by the Conversion Ratio in effect immediately after
such adjustment. All adjustments pursuant to this paragraph
(8) shall be notified to the holders of this Series A
Preferred Stock and such notice shall be accompanied by a
Schedule of Computations of the adjustments.
(9) Voting Rights. (a) Except as otherwise
provided by applicable law, the holders of the shares of
Series A Preferred Stock (i) shall be entitled to vote with
the holders of the Common Stock on all matters submitted for
a vote of holders of Common Stock, (ii) shall be entitled to
a number of votes equal to the number of votes to which the
shares of Common Stock issuable upon conversion of such
15
shares of Series A Preferred Stock would have been entitled
if such shares of Common Stock had been outstanding at the
time of the applicable vote and related record date and
(iii) shall be entitled to notice of any stockholders'
meeting in accordance with the certificate of incorporation
and by-laws of the Corporation.
(b) So long as any shares of Series A Preferred
Stock are outstanding, the Corporation shall not, without
the written consent or affirmative vote at a meeting called
for that purpose of the holders of a majority of the shares
of Series A Preferred Stock then outstanding, amend, alter
or repeal, whether by merger, consolidation, combination,
reclassification or otherwise, the Certificate of
Incorporation or By-laws of the Corporation or of any
provision thereof (including the adoption of a new provision
thereof) which would result in an alteration or
circumvention of the voting powers, designation and
preferences and relative participating, optional and other
special rights, and qualifications, limitations and
restrictions of the Series A Preferred Stock; provided,
however that any such amendment or alteration that changes
the dividend payable on, or the liquidation preference or
the par value of, the Series A Preferred Stock shall require
the affirmative vote at a meeting of holders of Series A
Preferred Stock duly called for such purpose, or the written
consent, of the holder of each share of Series A Preferred
Stock.
(c) The consent or votes required in paragraph
(b) above shall be in addition to any approval of
stockholders of the Corporation which may be required by law
or pursuant to any provision of the Corporation's
Certificate of Incorporation or By-Laws, which approval
shall be obtained by vote of the stockholders of the
Corporation in the manner provided in paragraph (a) above.
(10) Issuance and Amendment. (a) The Corporation
will not issue more than 1,200,000 shares of Series A
Preferred Stock and the number of shares designated as
shares of Series A Preferred Stock may not be increased or
decreased without the consent of the holders of a majority
of the shares of Series A Preferred Stock outstanding.
(b) Shares of Series A Preferred Stock which have
been issued and reacquired in any manner, including shares
purchased, redeemed, converted or exchanged, shall (upon
compliance with any applicable provisions of the laws of the
State of Delaware) be cancelled and shall not be available
for reissue or redesignation.
(c) Upon any such reacquisition by the
Corporation, a certificate identifying the shares
16
reacquired, stating that reissuance of such shares is
prohibited and reciting the retirement of such shares shall
be executed, acknowledged and filed in accordance with
provisions of the laws of the State of Delaware.
(11) Definitions. The following terms, as used
herein, have the following meanings:
"By-Laws", with respect to a corporation, shall
mean the by-laws, articles of association, or similar
corporate organizational document.
"Certificate of Incorporation", with respect to a
corporation, shall mean the charter, certificate of
incorporation, or similar corporate organizational document.
"Common Stock" shall mean the Class A Common
Stock, par value $0.001 per share, of the Corporation.
"Common Stock Distribution" shall have the meaning
set forth in paragraph (3)(d)(ii).
"Series A Preferred Stock" shall have the meaning
set forth in paragraph (1).
"Dividend Payment Date" shall have the meaning set
forth in paragraph (3)(a).
"Exchange Notes" shall have the meaning set forth
in paragraph (6)
"Stock Option Plans" shall mean the 1989 Long-Term
Incentive Compensation Plan and the Employee Stock Purchase
Plan of the Corporation.
"outstanding", when used with reference to shares
of stock, shall mean issued shares, excluding shares held by
the Corporation or a subsidiary.
"Person" shall mean any corporation, partnership,
trust, organization, association, group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended), other entity or individual.
"Required Approvals" shall mean any approvals or
consents (including regulatory approvals) or the expiration
of any waiting periods required for conversion of the
outstanding shares of Series A Preferred Stock.
"Trading Day" shall mean a day on which the
principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of Common
17
Stock are not listed or admitted to trading on any national
securities exchange, a day on which NASDAQ or other similar
system as may be then in use is open for the reporting of
bid and asked prices in the over-the-counter market, or, if
bid and asked prices for the shares of Common Stock are not
so reported by any such system, a Business Day.
(12) General Provisions. (a) The headings of the
paragraphs, subparagraphs, clauses and subclauses of this
Certificate of Designation are for convenience of reference
only and shall not define, limit or affect any of the
provisions hereof.
(b) The holder of Series A Preferred Stock or
Exchange Notes, by acceptance thereof, acknowledges and
agrees that payments of dividends, interest, premium and
principal on, and exchange, redemption and repurchase of,
such securities by the Corporation are subject to
restrictions contained in certain credit and financing
agreements on the Corporation.
IN WITNESS WHEREOF, Air & Water Technologies
Corporation has caused this Certificate of Designation to be
signed and attested by the undersigned this 14th day of June,
1994.
AIR & WATER TECHNOLOGIES
CORPORATION
By /s/ William R. Lewis
-------------------------------
Name: William R. Lewis
Title: Chief Financial Officer
By /s/ Douglas Satzger
-------------------------------
Name: Douglas Satzger
Title: Senior Vice President
ATTEST:
/s/ Joseph M. Morena
- ---------------------------
Name: Joseph M. Morena
Title: Assistant Secretary
18
Attachment A
to
Certificate of Designation
AIR & WATER TECHNOLOGIES CORPORATION
5 1/2% CONVERTIBLE SUBORDINATED NOTES
FOR VALUE RECEIVED, Air & Water Technologies
Corporation, a Delaware corporation (the "Company"), hereby
promises to pay to _____________ or registered assigns, the
principal amount of ____________ ($___________), on the
Maturity Date pursuant to Section 2.01 and promises to pay
interest on the unpaid principal amount of this Note on the
dates and at the rate provided for in Section 2.02.
This Note is one of the series designated 5 1/2%
Convertible Subordinated Notes, limited in aggregate
principal amount to $60,000,000 (the "Notes").
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms,
as used herein, have the following meanings:
"Affiliate" of any Person means any other Person
(other than, in the case of the Company, a Subsidiary and,
in the case of a Subsidiary, the Company) directly or
indirectly controlling, controlled by or under common
control with such Person. As used in this definition of
"Affiliate", the term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person,
whether through ownership of voting securities, by contract
or otherwise.
"Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York
City are authorized by law to close.
"By-Laws", with respect to a corporation, shall
mean the by-laws, articles of association, or similar
corporate organizational document.
"Capitalized Lease" means, as applied to any
Person, any lease of any property (whether real, personal or
mixed) the obligations of such Person as lessee under which,
in conformity with generally accepted accounting principles,
are required to be capitalized on the balance sheet of that
Person.
"Capitalized Lease Obligation" means, as applied
to any Person, the obligation of such Person under any
Capitalized Lease to the extent required to be capitalized
in accordance with generally accepted accounting principles.
"Certicate of Incorporation", with respect to a
corporation, shall mean the charter, certificate of
incorporation, or similar corporate organizational document.
"Common Stock" shall mean the Class A Common
Stock, par value $0.001 per share, of the Company.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all
obligations of such Person to purchase securities (or other
property) for its own account which arise out of or in
connection with the sale of the same or substantially
similar securities or properties, (v) all obligations of
such Person in respect of letters of credit or bankers'
acceptances or other similar instruments (or reimbursement
obligations with respect thereto), (vi) all obligations of
such Person as lessee under Capitalized Leases, (vii) all
Debt of others Guaranteed by such Person, (viii) all Debt of
others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person and (ix)
all renewals, extensions, refundings, deferrals, amendments
or modifications of Debt described in clauses (i), (ii),
(iii), (iv), (v), (vii) and (viii) and all renewals and
extensions of Capital Leases described in clauses (vi),
(vii) and (viii).
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Event of Default" has the meaning set forth in
Article VII.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt of any other Person and,
without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply
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funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such
Debt of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has
a corresponding meaning.
"Interest Payment Date" means the last Business
Day of each March, June, September and December.
"Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, the Company or any Subsidiary
shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, Capitalized
Lease or other title retention agreement relating to such
asset.
"Maturity Date" means the earlier of (i) the tenth
anniversary of the date of issue of this Note and (ii) any
date fixed for redemption in accordance with Article V.
"Noteholder" means each Person which is a holder
of any of the Notes, and their respective successors.
"Notice of Election to Convert" shall mean the
Notice of Election to Convert set forth in Schedule A to
this Note.
"Notice of Intention to Convert" shall mean a
notice stating that the Noteholder intends to convert this
Note pursuant to Article IV upon receipt of the Required
Approvals.
"outstanding", when used with reference to shares
of stock, shall mean issued shares, excluding shares held by
the Company or a Subsidiary.
"Person" shall mean any corporation, partnership,
trust, organization, association, group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended), other entity or individual.
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"Required Approvals" shall mean any approvals or
consents (including regulatory approvals) or the expiration
of any waiting periods required for conversion of this Note.
"Series A Preferred Stock" shall mean the 5 1/2%
Series A Convertible Exchangeable Preferred Stock of the
Company.
"Stock Option Plans" shall mean the 1989 Long-Term
Incentive Compensation Plan and the Employee Stock Purchase
Plan of the Corporation.
"Subsidiary" means any corporation or other entity
of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are
at the time directly or indirectly owned by the Company.
"Trading Day" shall mean a day on which the
principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national
securities exchange, a day on which NASDAQ or other similar
system as may be then in use is open for the reporting of
bid and asked prices in the over-the-counter market, or, if
bid and asked prices for the shares of Common Stock are not
so reported by any such system, a Business Day.
ARTICLE II
PAYMENT OF PRINCIPAL AND INTEREST
SECTION 2.01. Mandatory Redemption. On the
Maturity Date (the "Principal Repayment Date") the principal
amount of this Note together with all accrued and unpaid
interest to the Maturity Date shall be due and payable, and
the Company shall repay such amount on the Maturity Date to
the Noteholder.
SECTION 2.02. Interest Rate. (a) Except as
provided in Article IV, this Note shall bear interest on the
outstanding principal amount thereof, for each day from the
date of this Note until it becomes due, at a rate per annum
equal to 5 1/2%. Such interest shall be payable in four equal
quarterly payments in arrears on each Interest Payment Date
and on the Maturity Date.
(b) Any overdue principal of or interest on the
Loan shall bear interest, payable on demand, for each day
from and including the date payment thereof was due to but
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excluding the date of actual payment, at a rate per annum
equal to 6 1/2%.
SECTION 2.03. Computation of Interest. Interest,
other than interest for a quarterly period, shall be
computed on the basis of a year of 365 days and paid for the
actual number of days elapsed (including the first day but
excluding the last day).
ARTICLE III
SUBORDINATION
SECTION 3.01. Definitions. The following term, as
used in this Article, shall have the following meaning:
"Superior Indebtedness" means all Debt of the Company
(including, without limitation, any interest which accrues
after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of the
Company) other than the Notes.
SECTION 3.02. Subordination to Superior Indebtedness.
The Company and the Noteholders agree for the benefit of the
holders of the Superior Indebtedness that the Notes shall, in
the manner hereinafter set forth, be subordinate and junior in
right of payment to all Superior Indebtedness of the Company.
SECTION 3.03. Limitations on Payments and
Acceleration. (a) Upon the maturity of all or any part of the
Superior Indebtedness by lapse of time, acceleration or
otherwise, such Superior Indebtedness shall first be paid in
full, or such payment shall be duly provided for in cash or in
a manner satisfactory to the holders of the Superior
Indebtedness, before any payment by the Company is made on
account of the principal of or interest on the Notes or to
acquire the Notes.
(b) In the event and during the continuation of any
default in the payment of any principal of or interest on any
Superior Indebtedness when due and payable (each a "Payment
Default"), whether at maturity, upon any redemption, by
declaration or otherwise, no payment shall be made by the
Company on or with respect to the principal of, or interest on,
the Notes or to acquire the Notes unless and until such Payment
Default shall have been remedied. In any such event, no holder
of the Notes shall accept or receive any payment of or on
account of the Notes, notwithstanding the terms of the Notes.
(c) In the event that any event or condition shall
occur and be continuing which would permit, or which with
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notice or lapse of time or both would permit, the holder or
holders of any Superior Indebtedness (or a trustee acting on
behalf of the holders thereof) to declare such Superior
Indebtedness due and payable prior to the date on which it
would otherwise have become due and payable (each such event or
condition being referred to in this Note as a "Non-Payment
Default"), no payment shall be made by the Company on or with
respect to the principal of, or interest on, the Notes or to
acquire the Notes during any period commencing on the date
written notice of such Non-Payment Default (a "Blockage
Notice") shall have been given to the Company and the holders
of the Notes by the holders of a majority in principal amount
of the Superior Indebtedness then outstanding with respect to
which such Non-Payment Default shall have occurred (or their
authorized agent) and ending on the earliest to occur of the
date (the "Blockage Expiration Date") (i) 180 days after the
date of the Blockage Notice, (ii) such Non-Payment Default
shall have been remedied or effectively waived or shall have
ceased to exist and (iii) the Superior Indebtedness in respect
of which such Non-Payment Default shall have occurred shall
have been paid in full, provided that the foregoing provisions
do not limit the number of Blockage Notices which may be given
during any 360-day period, provided further that the number of
days on which payment on the Notes may be prohibited under this
subdivision (c) during any 360-day period shall not exceed 180
days. At the Blockage Expiration Date, the Company shall,
subject to Section 3.03(b), promptly pay the holder or holders
of the Notes all sums not paid as a result of this Section
3.03(c). In any such event, no holder of the Notes shall
accept or receive during any such period any payment of or an
account of the Notes, notwithstanding the terms of the Notes.
SECTION 3.04. Note Subordinated to Prior Payment of
all Superior Indebtedness on Dissolution, Liquidation or
Reorganization of Company. In the event of any insolvency or
bankruptcy proceedings, and any receivership, liquidation,
reorganization or other similar proceedings in connection
therewith, relative to the Company or to its creditors, in
their capacity as creditors of the Company, or to substantially
all of its property, and in the event of any proceedings for
voluntary liquidation, dissolution or other winding up of the
Company, whether or not involving insolvency or bankruptcy,
then
(a) the holders of all Superior Indebtedness shall
first be entitled to receive payment in full of the
principal thereof, interest and all other amounts payable
thereon (accruing before and after the commencement of the
proceedings) before any holder of the Notes is entitled to
receive any payment on account of the principal of or
interest on the Notes; and
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(b) any payment or distribution of assets of the
Company of any kind or character, whether in cash, property
or securities to which any holder of the Notes would be
entitled, but for the provisions of this Article III, shall
be paid or distributed by the liquidating trustee or agent
or other person making such payment or distribution, whether
a trustee in bankruptcy, a receiver or liquidating trustee
or other trustee or agent, directly to the holders of the
Superior Indebtedness or any other representative on behalf
of the holders of Superior Indebtedness, to the extent
necessary to make payment in full of all principal, interest
and all other amounts payable on all Superior Indebtedness
remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of the Superior
Indebtedness.
SECTION 3.05. Rights of Holders of Superior
Indebtedness; Subrogation. (a) Should any payment or
distribution or security or the proceeds of any thereof be
collected or received by any holder of the Notes in respect of
the Notes, and such collection or receipt is prohibited
hereunder prior to the payment in full of the Superior
Indebtedness, such holder will forthwith deliver the same to
the holders of the Superior Indebtedness for the equal and
ratable benefit of the holders of the Superior Indebtedness in
precisely the form received (except for the endorsement or the
assignment of or by such holder where necessary) for
application to payment of all Superior Indebtedness in full,
after giving effect to any concurrent payment or distribution
to the holders of Superior Indebtedness and, until so
delivered, the same shall be held in trust by such holder as
the property of the holders of the Superior Indebtedness.
(b) All payments and distributions received by the
holders of the Superior Indebtedness in respect of the Notes,
to the extent received in or converted into cash, may be
applied by the holders of the Superior Indebtedness first to
the payment of any and all reasonable out-of-pocket expenses
(including attorney's fees and legal expenses) paid or incurred
by the holders of the Superior Indebtedness or such
representative in enforcing the provisions hereof or in
endeavoring to collect or realize upon the Notes or any
security therefor, and any balance thereof shall, solely as
between any holder of the Notes, on the one hand, and the
holders of the Superior Indebtedness, on the other hand, be
applied by the holders of the Superior Indebtedness in such
order of application as the holders of the Superior
Indebtedness may from time to time select, toward the payment
of the Superior Indebtedness remaining unpaid.
(c) No holder of the Notes shall be subrogated to the
rights of the holders of the Superior Indebtedness to receive
payments or distributions of assets of the Company until all
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amounts payable with respect to the Superior Indebtedness shall
be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Superior
Indebtedness of any cash, property or securities to which any
holder of the Notes would be entitled except for these
provisions shall, as between the Company, its creditors other
than the holders of the Superior Indebtedness, and such holders
of the Notes, be deemed to be a payment by the Company to or on
account of the Superior Indebtedness.
(d) Subject to the payment in full of all Superior
Indebtedness, the holders of the Notes shall be subrogated
(equally and ratably with the holders of all subordinated
indebtedness of the Company which, by its terms, is not
superior in right of payment to the Notes, and ranks on a
parity with the Notes) to the rights of the holders of Superior
Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the
Superior Indebtedness until all amounts owing on the Notes
shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Notes of cash,
property, securities or other assets by virtue of the
subrogation herein provided which otherwise would have been
made to the holders of the Superior Indebtedness shall, as
between the Company, its creditors other than the holders of
Superior Indebtedness and the holders of the Notes, be deemed
to be a payment to or on account of the Notes. The holders of
the Notes agree that, in the event that all or any part of any
payment made on account of the Superior Indebtedness is
recovered from the holders of Superior Indebtedness as a
preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law, any payment or
distribution received by the holders of the Notes on account of
the Notes at any time after the date of the payment so
recovered, whether pursuant to the right of subrogation
provided for in this Section 3.05 or otherwise, shall be deemed
to have been received by such holders of the Notes in trust as
the property of the holders of the Superior Indebtedness and
such holders shall forthwith deliver the same to the holders of
the Superior Indebtedness for the equal and ratable benefit of
the holders of the Superior Indebtedness for application to
payment of all Superior Indebtedness until paid in full.
SECTION 3.06. Renewals, Extensions and Increases of
Superior Indebtedness. Each holder of the Notes by his
acceptance thereof thereby waives any and all notice of
renewal, extension, accrual or (consistent with the definition
of Superior Indebtedness) increase in the amount of any of the
Superior Indebtedness, present or future, and agrees and
consents that without notice to or assent by any holder or
holders of the Notes:
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(i) the obligation and liabilities of the Company or
any other party or parties for or upon the Superior
Indebtedness (or any promissory note, security document or
guaranty evidencing or securing the same) may, from time to
time, in whole or in part, be renewed, extended, increased
(consistent with the definition of Superior Indebtedness),
modified, amended, accelerated, compromised, supplemented,
terminated, sold, exchanged, waived or released;
(ii) the holders of the Superior Indebtedness or any
other representative acting on behalf of the holders of the
Superior Indebtedness and the holders of the Superior
Indebtedness may exercise or refrain from exercising any
right, remedy or power granted by or in connection with any
agreements relating to the Superior Indebtedness; and
(iii) any balance or balances of funds with any
holders of the Superior Indebtedness at any time standing to
the credit of the Company may, from time to time, in whole
or in part, be surrendered or released;
all as the holders of the Superior Indebtedness or any other
representative or representatives acting on behalf of the
holders of the Superior Indebtedness and the holders of the
Superior Indebtedness may deem advisable and all without
impairing, abridging, diminishing, releasing or affecting the
subordination of the Notes to the Superior Indebtedness
provided for herein.
SECTION 3.07. Obligation of Company Unconditional.
Nothing contained in this Article III or in the Notes is
intended to or shall impair, as between the Company, its
creditors other than the holders of the Superior Indebtedness,
and the holders of the Notes, the obligation of the Company,
which is absolute and unconditional, to pay to the holders of
the Notes the principal of, and interest on the Notes, as and
when the same shall become due and payable, by lapse of time,
acceleration or otherwise, in accordance with their terms, or
is intended to or shall affect the relative rights of the
holders of the Notes and other creditors of the Company other
than the holders of the Superior Indebtedness, nor shall
anything herein or therein prevent the holder of the Notes
(i) from taking all appropriate actions to preserve their
rights under the Notes not inconsistent with the rights of the
holders of the Superior Indebtedness under this Article III, or
(ii) from exercising all remedies, including without limitation
equitable remedies, otherwise permitted by applicable law upon
default under the Notes, subject to the rights, if any, under
this Article III of the holders of the Superior Indebtedness in
respect of cash, property or securities of the Company
otherwise payable or delivered to such holders upon the
exercise of any such remedy. The provisions of this Article
III are and are intended solely for the purpose of defining the
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relative rights of holders of the Notes, on the one hand, and
the holders of the Superior Indebtedness, on the other hand.
SECTION 3.08. Miscellaneous. (a) Each holder of the
Notes by its acceptance thereof thereby acknowledges and agrees
that the holders of the Superior Indebtedness have relied upon
and will continue to rely upon the subordination provided for
in this Article III in entering into the agreements relating to
Superior Indebtedness and in extending credit to the Company
pursuant thereto.
(b) No present or future holder of Superior
Indebtedness shall be prejudiced in his right to enforce the
subordination contained herein in accordance with the terms
hereof by any act or failure to act on the part of the Company
or any holder of the Notes. The subordination provisions
contained in this Article III are for the benefit of the
holders of the Superior Indebtedness from time to time and, so
long as Superior Indebtedness is outstanding under any
agreement, may not be rescinded, cancelled or modified in any
way without the prior written consent thereto of holders of at
least 75% in aggregate principal amount of the Superior
Indebtedness at the time outstanding.
(c) The subordination provisions contained in this
Article III shall be binding upon any holder of the Notes and
upon the heirs, legal representatives, successors and assigns
of any holder of the Notes; and, to the extent that any holder
of the Notes is either a partnership or a corporation, all
references herein to any holder of the Notes shall be deemed to
include any successor or successors, whether immediate or
remote, to such partnership or corporation.
ARTICLE IV
CONVERSION
SECTION 4.01. Conversion. (a) Subject to the
provisions of this Article IV, the Noteholder shall have the
right, at any time, at such Noteholder's option, to convert any
or all of the principal amount of this Note, in whole or in
part, into fully paid and non-assessable shares of Common
Stock. The number of shares of Common Stock deliverable upon
conversion of each $50 of principal amount of this Note,
adjusted as hereinafter provided, is referred to herein as the
"Conversion Ratio." The Conversion Ratio as of the date of
issue of this Note shall be the Conversion Ratio under the
Series A Preferred Stock immediately prior to the exchange of
such Series A Preferred Stock for this Note, subject to
adjustment from time to time pursuant to Section 4.07 hereof.
Notwithstanding any call for redemption pursuant to Article V,
the right to convert shares so called for redemption shall
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terminate at the close of business on the date immediately
preceding the date fixed for such redemption or exchange, as
the case may be, unless the Company shall default in making
payment of the amount payable upon such redemption or in making
the exchange and payment of any amount payable upon such
exchange.
SECTION 4.02. Exercise Procedure. (a) In order to
exercise the conversion privilege, the Noteholder shall
surrender this Note at the office of the Company, with the
Notice of Election to Convert completed and signed. Unless the
shares issuable on conversion are to be issued in the same name
as the name in which this Note is registered, each share
surrendered for conversion shall be accompanied by instruments
of transfer, in form satisfactory to the Company, duly executed
by the Noteholder or the Noteholder's duly authorized attorney
and an amount sufficient to pay any transfer or similar tax.
(b) As promptly as practicable after the surrender by
the Noteholder as aforesaid, the Company shall issue and shall
deliver to such Noteholder, or on the Noteholder's written
order to the Noteholder's transferee, a certificate or
certificates for the whole number of shares of Common Stock
issuable upon the conversion of such shares in accordance with
the provisions of this Article IV.
(c) Each conversion shall be deemed to have been
effected immediately prior to the close of business on the date
on which this Note shall have been surrendered and such notice
received by the Company as aforesaid, and the person in whose
name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder of record of the shares of
Common Stock represented thereby at such time on such date and
such conversion shall be into a number of shares of Common
Stock equal to the product of (A) the principal amount of this
Note surrendered for conversion divided by 50 and (B) the
Conversion Ratio in effect at such time on such date. All
shares of Common Stock delivered upon conversion of this Note
will upon delivery be duly and validly issued and fully paid
and non-assessable, free of all liens and charges and not
subject to any preemptive rights. Upon the surrender of this
Note, the principal amount of this Note surrendered for
conversion shall no longer be deemed to be outstanding and all
rights of a Noteholder with respect to the principal amount of
this Note surrendered for conversion shall immediately
terminate except the right to receive the Common Stock and
other amounts, including any accrued and unpaid interest on
this Note, payable pursuant to this Article IV.
SECTION 4.03. Effect of Election. (a) Upon delivery
to the Company by the Noteholder of a Notice of Election to
Convert or a Notice of Intention to Convert, the right of the
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Company to redeem the principal amount of this Note which is to
be converted shall terminate, regardless of whether a notice of
redemption has been mailed.
(b) Interest on the outstanding principal amount of
this Note delivered for conversion shall cease to accrue on the
date of delivery by the Noteholder of such Notice of Election
to Convert or Notice of Intention to Convert. Any such accrued
and unpaid interest shall be payable by the Company to the
Noteholder on the next succeeding Interest Payment Date. From
and after the date of such delivery, this Note shall
participate equally and ratably with the holders of shares of
Common Stock in all dividends paid on the Common Stock as if
this Note had been converted to shares of Common Stock at the
time of such delivery.
(c) Except as provided above and in Section 4.07, the
Company shall make no adjustment for accrued and unpaid
interest on this Note, on conversion of this Note or for
dividends in cash on the shares of Common Stock issued upon
such conversion.
SECTION 4.04. Issuance of Shares. (a) The Company
covenants that it shall at all times reserve and keep
available, free from preemptive rights, such number of its
authorized but unissued shares of Common Stock as shall be
required for the purpose of effecting conversions of the Notes.
(b) Prior to the delivery of any securities which the
Company shall be obligated to deliver upon conversion of the
Notes, the Company shall comply with all applicable federal and
state laws and regulations which require action to be taken by
the Company.
SECTION 4.05. Taxes on Conversion. The Company will
pay any and all documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of shares of
Common Stock on conversion of any part of the principal amount
of this Note pursuant hereto; provided, that the Company shall
not be required to pay any tax which may be payable in respect
of any transfer involved in the issue or delivery of shares of
Common Stock in a name other than that of the Noteholder to be
converted and no such issue or delivery shall be made unless
and until the person requesting such issue or delivery 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 4.06. No Fractions of Common Stock to be
Issued. In connection with the conversion of the principal
amount of this Note, no fractions of shares of Common Stock
shall be issued, but in lieu thereof the Company shall pay a
cash adjustment in respect of such fractional interest in an
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amount equal to such fractional interest multiplied by the
Daily Price (as defined in Section 4.07(f)) per share of Common
Stock on the Trading Day on which this Note is deemed to have
been converted. If more than one Note is surrendered for
conversion by the same Noteholder (or Affiliate of such
Noteholder) at the same time, the number of full shares of
Common Stock issuable on conversion of the principal amount
thereof surrendered for conversion shall be computed on the
basis of the total principal amounts of the Notes so
surrendered.
Section 4.07. Anti-dilution. (a) In case the Company
shall at any time after the date of initial issue of this Note
(I) declare a dividend or make a distribution on Common Stock
payable in Common Stock, (II) subdivide or split the
outstanding Common Stock, (III) combine or reclassify the
outstanding Common Stock into a smaller number of shares, (IV)
issue any shares of its capital stock in a reclassification of
Common Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the
continuing corporation), or (V) consolidate with, or merge with
or into, any other Person, the Conversion Ratio in effect at
the time of the record date for such dividend or distribution
or of the effective date of such subdivision, split,
combination, consolidation, merger or reclassification shall be
proportionately adjusted so that the conversion of this Note
after such time shall entitle the Noteholder to receive the
aggregate number of shares of Common Stock or other securities
of the Company (or shares of any security into which such
shares of Common Stock have been combined, consolidated, merged
or reclassified pursuant to clause (III), (IV) or (V) above)
which, if this Note had been converted immediately prior to
such time, such Noteholder would have owned upon such
conversion and been entitled to receive by virtue of such
dividend, distribution, subdivision, split, combination,
consolidation, merger or reclassification, assuming such holder
of Common Stock of the Company (x) is not a Person with which
the Company consolidated or into which the Company merged or
which merged into the Company or to which such
recapitalization, sale or transfer was made, as the case may be
("constituent Person"), or an affiliate of a constituent Person
and (y) failed to exercise any rights of election as to the
kind or amount of securities, cash and other property
receivable upon such reclassification, change, consolidation,
merger, recapitalization, sale or transfer (provided, that if
the kind or amount of securities, cash and other property
receivable upon such reclassification, change, consolidation,
merger, recapitalization, sale or transfer is not the same for
each share of Common Stock of the Company held immediately
prior to such reclassification, change, consolidation, merger,
recapitalization, sale or transfer by other than a constituent
Person or an affiliate thereof and in respect of which such
rights of election shall not have been exercised ("non-electing
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share"), then for the purpose of this Section 4.07 the kind and
amount of securities, cash and other property receivable upon
such reclassification, change, consolidation, merger,
recapitalization, sale or transfer by each non-electing share
shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). Such
adjustment shall be made successively whenever any event listed
above shall occur.
(b) In case the Company shall issue or sell any Common
Stock (other than Common Stock issued (I) upon conversion of
the Series A Preferred Stock, the Notes or the 8% Convertible
Subordinated Debentures due May 15, 2015, (II) pursuant to the
Company's Stock Option Plans or pursuant to any other Common
Stock related employee compensation plan of the Company
approved by the Company's Board of Directors or (III) upon
exercise or conversion of any security the issuance of which
caused an adjustment under Sections 4.07(c) or (d) hereof)
without consideration or for a consideration per share less
than the then Conversion Price Per Common Share (as defined in
Section 4.07(f)), the Conversion Ratio to be in effect after
such issuance or sale shall be determined by multiplying the
Conversion Ratio in effect immediately prior to such issuance
or sale by a fraction, (A) the numerator of which shall be the
product of the aggregate number of shares of Common Stock
outstanding immediately after such issuance or sale and the
Current Valuation Per Common Share (as defined in Section
4.07(f)) immediately prior to such issuance or sale and (B) the
denominator of which shall be the sum of (x) the number of
shares of Common Stock outstanding immediately prior to the
time of such issuance or sale multiplied by the Current
Valuation Per Common Share immediately prior to such issuance
or sale and (y) the aggregate consideration, if any, to be
received by the Company upon such issuance or sale. In case
any portion of the consideration to be received by the Company
shall be in a form other than cash, the fair market value of
such noncash consideration shall be utilized in the foregoing
computation. Such fair market value shall be determined by the
Board of Directors of the Company; provided that if the
Noteholders of 25% or more of the aggregate principal amount of
the Notes shall object to any such determination, the Board of
Directors shall retain an independent appraiser reasonably
satisfactory to such Noteholders to determine such fair market
value. The Noteholders shall be notified promptly of any
consideration other than cash to be received by the Company and
furnished with a description of the consideration and the fair
market value thereof, as determined by the Board of Directors.
(c) In case the Company shall fix a record date for
the issuance of rights, options or warrants to the holders of
its Common Stock or other securities entitling such holders to
subscribe for or purchase shares of Common Stock (or securities
convertible into shares of Common Stock) at a price per share
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of Common Stock (or having a conversion price per share of
Common Stock, if a security convertible into shares of Common
Stock) less than the then Conversion Price Per Common Share on
such record date, the maximum number of shares of Common Stock
issuable upon exercise of such rights, options or warrants (or
conversion of such convertible securities) shall be deemed to
have been issued and outstanding as of such record date and the
Conversion Ratio shall be adjusted pursuant to Section 4.07(b)
hereof, as though such maximum number of shares of Common Stock
had been so issued for an aggregate consideration payable by
the holders of such rights, options, warrants or convertible
securities prior to their receipt of such shares of Common
Stock. In case any portion of such consideration shall be in a
form other than cash, the fair market value of such noncash
consideration shall be determined as set forth in Section
4.07(b) hereof. Such adjustment shall be made successively
whenever such record date is fixed; and in the event that such
rights, options or warrants are not so issued or expire
unexercised, or in the event of a change in the number of
shares of Common Stock to which the holders of such rights,
options or warrants are entitled (other than pursuant to
adjustment provisions therein comparable to those contained in
this Section 4.07), the Conversion Ratio shall again be
adjusted to be the Conversion Ratio which would then be in
effect if such record date had not been fixed, in the former
event, or the Conversion Ratio which would then be in effect if
such holder had initially been entitled to such changed number
of shares of Common Stock, in the latter event.
(d) In case the Company shall issue rights, options
(other than options issued pursuant to a plan described in
clause II of Section 4.07(b)) or warrants entitling the holders
thereof to subscribe for or purchase Common Stock (or
securities convertible into shares of Common Stock) or shall
issue convertible securities, and the price per share of Common
Stock of such rights, options, warrants or convertible
securities (including, in the case of rights, options or
warrants, the price at which they may be exercised) is less
than the then Conversion Price Per Common Share, the maximum
number of shares of Common Stock issuable upon exercise of such
rights, options or warrants or upon conversion of such
convertible securities shall be deemed to have been issued and
outstanding as of the date of such sale or issuance, and the
Conversion Ratio shall be adjusted pursuant to Section 4.07(b)
hereof as though such maximum number of shares of Common Stock
had been so issued for an aggregate consideration equal to the
aggregate consideration paid for such rights, options, warrants
or convertible securities and the aggregate consideration
payable by the holders of such rights, options, warrants or
convertible securities prior to their receipt of such shares of
Common Stock. In case any portion of such consideration shall
be in a form other than cash, the fair market value of such
noncash consideration shall be determined as set forth in
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Section 4.07(b) hereof. Such adjustment shall be made
successively whenever such rights, options, warrants or
convertible securities are issued; and in the event that such
rights, options or warrants expire unexercised, or in the event
of a change in the number of shares of Common Stock to which
the holders of such rights, options, warrants or convertible
securities are entitled (other than pursuant to adjustment
provisions therein comparable to those contained in this
Section 4.07), the Conversion Ratio shall again be adjusted to
be the Conversion Ratio which would then be in effect if such
rights, options, warrants or convertible securities had not
been issued, in the former event, or the Conversion Ratio which
would then be in effect if such holders had initially been
entitled to such changed number of shares of Common Stock, in
the latter event. No adjustment of the Conversion Ratio shall
be made pursuant to this Section 4.07(d) to the extent that the
Conversion Ratio shall have been adjusted pursuant to Section
4.07(c) upon the setting of any record date relating to such
rights, options, warrants or convertible securities and such
adjustment fully reflects the number of shares of Common Stock
to which the holders of such rights, options, warrants or
convertible securities are entitled and the price payable
therefor.
(e) In case the Company shall fix a record date for
the making of a distribution to holders of Common Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, assets or other
property (other than dividends payable in Common Stock or
rights, options or warrants referred to in, and for which an
adjustment is made pursuant to, Section 4.07(c) hereof), the
Conversion Ratio to be in effect after such record date shall
be determined by multiplying the Conversion Ratio in effect
immediately prior to such record date by a fraction, (A) the
numerator of which shall be the Current Valuation Per Common
Share on such record date, and (B) the denominator of which
shall be the Current Valuation Per Common Share on such record
date, less the fair market value (determined as set forth in
Section 4.07(b) hereof) of the portion of the assets, other
property or evidence of indebtedness so to be distributed which
is applicable to one share of Common Stock. Such adjustments
shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made,
the Conversion Ratio shall again be adjusted to be the
Conversion Ratio which would then be in effect if such record
date had not been fixed.
(f) For the purpose of any computation under Section
4.06 or Sections 4.07(b), (c), (d) or (e) hereof, on any
determination date, (I) the "Current Valuation Per Common
Share" shall be the greater of the Current Market Price Per
Common Share and the Conversion Price Per Common Share (each as
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defined below), (II) the "Current Market Price Per Common
Share" shall be deemed to be the average (weighted by daily
trading volume) of the Daily Prices (as defined below) per
share of the applicable class of Common Stock for the 20
consecutive trading days immediately prior to such date, (III)
the "Conversion Price Per Common Share" shall be deemed to be
the amount in dollars which is equal to $50 divided by the
Conversion Ratio immediately prior to such adjustment, and (IV)
"Daily Price" means (1) if the shares of such class of Common
Stock then are listed and traded on the American Stock
Exchange, Inc. ("AMEX"), the closing price on such day as
reported on the AMEX Composite Transactions Tape; (2) if the
shares of such class of Common Stock then are not listed and
traded on the AMEX, the closing price on such day as reported
by the principal national securities exchange on which the
shares are listed and traded; (3) if the shares of such class
of Common Stock then are not listed and traded on any such
securities exchange, the last reported sale price on such day
on the National Market of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ");
or (4) if the shares of such class of Common Stock then are not
traded on the NASDAQ National Market, the average of the
highest reported bid and lowest reported asked price on such
day as reported by NASDAQ. For purposes of any computation
under this Section 4.07, the number of shares of Common Stock
outstanding at any given time shall not include shares owned or
held by or for the account of the Company.
(g) No adjustment to the Conversion Ratio pursuant to
Sections 4.07(b), (c), (d) and (e) above shall be required
unless such adjustment would require an increase or decrease of
at least 1% in the Conversion Ratio; provided however, that any
adjustments which by reason of this Section 4.07(g) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 4.07 shall be made to the nearest four decimal
points.
(h) In the event that, at any time as a result of the
provisions of this Section 4.07, the Noteholder of this Note
upon subsequent conversion shall become entitled to receive any
shares of capital stock of the Company other than Common Stock,
the number of such other shares so receivable upon conversion
of this Note shall thereafter be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions contained herein.
Section 4.08. Adjustment of Redemption Threshold.
Whenever an adjustment is made to the Conversion Ratio pursuant
to Section 4.07, the Redemption Threshold (as defined in
Section 5.01(b) shall be adjusted by multiplying the Redemption
Threshold by the Conversion Ratio in effect immediately prior
to such adjustment and dividing such product by the Conversion
17
Ratio in effect immediately after such adjustment. All
adjustments pursuant to Sections 4.07 and 4.08 shall be
notified to the Noteholders and such notice shall be
accompanied by a Schedule of Computations of the adjustments.
ARTICLE V
REDEMPTION
SECTION 5.01. Redemption. The Notes shall be
redeemable by the Corporation as provided below.
(a) The Notes shall not be redeemable prior to the
Initial Redemption Date. The "Initial Redemption Date" shall
be June 30, 1997.
(b) At the option of the Corporation, the Notes may be
redeemed at any time or from time to time (subject to the
provisions set forth below and in Article IV) on or after the
Initial Redemption Date, in whole or in part, at the price (the
"Redemption Price"), payable in cash, equal to the percentage
set forth below of the principal amount of the Notes for
redemptions during the 12-month periods beginning on the
Initial Redemption Date or the annual anniversaries thereof
indicated below, plus, in each case, an amount equal to accrued
and unpaid interest thereon, to the date fixed for redemption:
12-month period beginning on Percentage
---------------------------- ----------
Initial Redemption Date 103.85%
First Anniversary thereof 103.30%
Second Anniversary thereof 102.75%
Third Anniversary thereof 102.20%
Fourth Anniversary thereof 101.65%
Fifth Anniversary thereof 101.10%
Sixth Anniversary thereof 100.55%
Seventh Anniversary thereof
and thereafter 100.00%
Notwithstanding the foregoing, the Corporation may elect to
redeem the Notes at any time on or after the Initial Redemption
Date and prior to the fourth anniversary of the Initial
Redemption Date only if for at least 20 Trading Days during the
period consisting of the 30 consecutive Trading Days ending on
the date notice of such redemption is given, including the last
Trading Day of such period, the Closing Price per share of
Common Stock exceeds $18.75, as adjusted pursuant to Section
4.08 (the "Redemption Threshold").
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(c) In the event that less than all of the principal
amount of the Notes is to be redeemed pursuant to this Article
V, the Corporation shall call for redemption the Notes pro rata
among the holders, based on the principal amount of Notes held
by each holder. Any redemption for which the principal amount
of Notes is called for redemption on a pro rata basis (whether
or not some of the principal amount of Notes so called are
subsequently converted pursuant to Article IV) shall comply
with this Section 5.01(c).
SECTION 5.02. Procedure for Redemption. (a) In the
event the Company shall redeem the Notes, notice of such
redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 days nor more than 60 days prior to the
redemption date, to the Noteholders of record at such
Noteholders' addresses as the same appears on the books of the
Company. Each such notice shall state: (i) the redemption
date; (ii) the redemption price; (iii) the place or places
where the Notes is to be surrendered for payment of the
redemption price; (iv) that interest on the Notes will cease to
accrue on such redemption date, and (v) the principal amount of
the Notes to be redeemed.
(b) Notice having been mailed as aforesaid, from and
after the redemption date (unless default shall be made by the
Company in providing money for the payment of the redemption
price or a Notice of Intention to Convert or Notice of Election
to Convert has been delivered to the Company pursuant to
Article IV), interest on the principal amount of the Notes
called for redemption shall cease to accrue, and such principal
amount of the Notes called for redemption shall no longer be
deemed to be outstanding and shall be cancelled and shall not
be available for reissue, and all rights of the Noteholders as
creditors of the Company (except the right to receive from the
Company the redemption price and any other amounts payable
pursuant to Section 5.01) in respect of such principal amount
of the Notes called for redemption shall cease. Upon surrender
in accordance with said notice of the Notes representing the
principal amount of the Notes called for redemption (properly
endorsed or assigned for transfer, if the Board of Directors of
the Company shall so require and the notice shall so state),
the principal amount of the Notes so called for redemption
shall be redeemed by the Company at the redemption price
aforesaid.
ARTICLE VI
VOTING RIGHTS
Section 6.01. General. Except as otherwise provided
by applicable law, the Noteholders of the Notes (i) shall be
entitled to vote with the holders of the Common Stock on all
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matters submitted for a vote of holders of Common Stock, (ii)
shall be entitled to a number of votes equal to the number of
votes to which the shares of Common Stock issuable upon
conversion of the Notes would have been entitled if such shares
of Common Stock had been outstanding at the time of the
applicable vote and related record date and (iii) shall be
entitled to notice of any stockholders' meeting in accordance
with the Certificate of Incorporation and By-Laws of the
Company.
Section 6.02. No Changes to Voting Rights. So long
as any of the principal amount of the Notes is outstanding, the
Company shall not, without the written consent or affirmative
vote of Noteholders which in the aggregate own more than 50% of
the aggregate principal amount of the Notes then outstanding,
at a meeting called for that purpose of the Noteholders, amend,
alter or repeal, whether by merger, consolidation, combination,
reclassification or otherwise, the Certificate of Incorporation
or By-laws of the Company or of any provision thereof
(including the adoption of a new provision thereof) which would
result in an alteration or circumvention of the voting powers
or other rights of the Notes; provided, however that any such
amendment or alteration that changes the interest payable on,
or the principal amount of, the Notes shall require the
affirmative vote at a meeting of holders of the Notes duly
called for such purpose, or the written consent, of the holders
of 100% of the aggregate principal amount of the Notes then
outstanding.
Section 6.03. Stockholder Approval Required. The
consent or votes required in Section 6.02 above shall be in
addition to any approval of stockholders of the Company which
may be required by law or pursuant to any provision of the
Company's Certificate of Incorporation or By-Laws, which
approval shall be obtained by vote of the stockholders of the
Company in the manner provided in Section 6.01 above.
ARTICLE VII
DEFAULTS
If one or more of the following events ("Events of
Default") shall have occurred and be continuing:
(a) the Company shall fail to pay when due any
principal of the Notes, or shall fail to pay within fifteen
days of the due date thereof any interest or other amount
payable hereunder;
(b) the Company shall fail to observe or perform any
covenant or agreement contained in the Notes (other than
those covered by clause (a) above) for 30 days after written
20
notice thereof has been given to the Company by the
Noteholder;
(c) the Company (i) shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
conservator, liquidator, custodian or other similar official
of it or any substantial part of its property, or (ii) shall
consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary
case or other proceeding commenced against it, or
(iii) shall make a general assignment for the benefit of
creditors, or (iv) shall fail generally to pay its debts as
they become due, or (v) shall take any corporate action to
authorize any of the foregoing;
(d) an involuntary case or other proceeding shall be
commenced against the Company seeking liquidation,
reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a
trustee, receiver, conservator, liquidator, custodian or
other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90
days; or an order for relief shall be entered against the
Company under the Federal bankruptcy laws as now or
hereafter in effect;
(e) a judgment or order for the payment of money in
excess of $5,000,000 shall be rendered against the Company
or any Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 30 days;
then, and in every such event, unless such Event of Default is
no longer continuing, the Noteholder may by notice to the
Company accelerate the maturity of the Notes by declaring the
Notes (together with accrued interest thereon) to be, and the
Notes shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company; provided
that in the case of any of the Events of Default specified in
subsection (c) or (d) above with respect to the Company,
without any notice to the Company or any other act by the
Noteholder, the Notes (together with accrued interest thereon)
shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are
hereby waived by the Company.
ARTICLE VIII
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MISCELLANEOUS
SECTION 8.01. Notices. All notices, requests and
other communications to any party hereunder shall be in writing
(including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party, at its address,
telex number or facsimile number set forth on the signature
pages hereof or such other address, telex number or facsimile
as such party may hereafter specify for the purpose of notice
to the other party. Each such notice, request or other
communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if
given by facsimile, when such facsimile is transmitted to the
facsimile number specified in this Section and the appropriate
confirmation is received, or (iii) if given by any other means,
when delivered at the address specified in this Section.
SECTION 8.02. No Waivers. No failure or delay by the
Noteholder in exercising any right, power or privilege
hereunder or under any Note shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 8.03. Amendments, Waivers and Issuance. (a)
Any provision of the Notes may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed
by the Company and Noteholders which in the aggregate own more
than 50% of the aggregate principal amount of the Notes.
(b) The Company will not issue more than $60,000,000
aggregate principal amount of the Notes without the consent of
Noteholders which in the aggregate own more than 50% of the
aggregate principal amount of the Notes.
SECTION 8.04. Governing Law. The Notes shall be
governed by and construed in accordance with the laws of the
State of New York.
AIR & WATER TECHNOLOGIES
CORPORATION
By________________________
Name:
Title:
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