SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------------------------------
FORM 10-Q
(mark one)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter Ended March 30, 1996.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-13572
THERMO ECOTEK CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 04-3072335
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
81 Wyman Street, P.O. Box 9046
Waltham, Massachusetts 02254-9046
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1500
Indicate by check mark whether the Registrant (1)
has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for
such shorter period that the Registrant was
required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each
of the issuer's classes of Common Stock, as of the
latest practicable date.
Class Outstanding at April 26, 1996
---------------------------- ------------------------------
Common Stock, $.10 par value 15,569,742
PAGE
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMO ECOTEK CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
March 30, September 30,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 81,374 $ 49,159
Restricted funds 7,180 11,992
Accounts receivable and unbilled revenues 20,555 25,275
Inventories 9,164 9,976
Prepaid income taxes and other current assets 6,622 5,468
-------- --------
124,895 101,870
-------- --------
Property, Plant and Equipment 283,452 272,797
Less: Accumulated depreciation and amortization 37,444 28,047
-------- --------
246,008 244,750
-------- --------
Note Receivable 900 900
-------- --------
Restricted Funds 13,320 12,040
-------- --------
Other Assets 15,660 12,207
-------- --------
$400,783 $371,767
======== ========
2PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
March 30, September 30,
(In thousands except share amounts) 1996 1995
--------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 5,428 $ 1,274
Lease obligations payable 1,809 1,765
Current portion of long-term obligations 24,187 21,291
Accrued interest 3,033 3,496
Other accrued expenses 12,125 11,555
Due to parent company 501 451
-------- --------
47,083 39,832
-------- --------
Long-term Obligations:
Nonrecourse tax-exempt obligations 78,700 94,700
4% Subordinated convertible debentures,
due to parent company 68,500 68,500
Noninterest-bearing subordinated convertible
debentures (Note 2) 37,000 -
Capital lease obligations 33,318 39,160
-------- --------
217,518 202,360
-------- --------
Deferred Income Taxes 22,320 19,775
-------- --------
Other Deferred Items 14,185 13,958
-------- --------
Minority Interest 2,856 2,857
-------- --------
Shareholders' Investment:
Common stock, $.10 par value, 50,000,000
shares authorized; 15,584,248 and
15,506,433 shares issued 1,558 1,551
Capital in excess of par value 64,653 64,188
Retained earnings 30,929 27,268
Treasury stock at cost, 17,388 and 1,521 shares (319) (22)
-------- --------
96,821 92,985
-------- --------
$400,783 $371,767
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Consolidated Statement of Income
(Unaudited)
Three Months Ended
-----------------------
March 30, April 1,
(In thousands except per share amounts) 1996 1995
--------------------------------------------------------------------------
Revenues $33,505 $31,015
------- -------
Costs and Operating Expenses:
Cost of revenues (includes $1,647 and
$1,339 to related parties) 26,560 25,668
General and administrative expenses (includes
$379 and $416 to parent company) 2,749 2,327
------- -------
29,309 27,995
------- -------
Operating Income 4,196 3,020
Interest Income 1,113 671
Interest Expense (includes $685 and $693
to parent company) (3,621) (2,646)
------- ------
Income Before Provision for Income Taxes
and Minority Interest 1,688 1,045
Provision for Income Taxes 752 242
Minority Interest Expense 327 392
------- ------
Net Income $ 609 $ 411
======= =======
Earnings per Share $ .04 $ .03
======= =======
Weighted Average Shares 16,310 13,953
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
4PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Consolidated Statement of Income
(Unaudited)
Six Months Ended
-----------------------
March 30, April 1,
(In thousands except per share amounts) 1996 1995
--------------------------------------------------------------------------
Revenues $67,801 $63,195
------- -------
Costs and Operating Expenses:
Cost of revenues (includes $3,113 and
$2,814 to related parties) 50,749 50,393
General and administrative expenses (includes
$835 and $994 to parent company) 5,175 3,778
------- -------
55,924 54,171
------- -------
Operating Income 11,877 9,024
Interest Income 2,368 1,191
Interest Expense (includes $1,370 and $1,307
to parent company) (7,464) (5,412)
------- ------
Income Before Provision for Income Taxes
and Minority Interest 6,781 4,803
Provision for Income Taxes 2,545 1,415
Minority Interest Expense 575 701
------- ------
Net Income 3,661 2,687
======= =======
Earnings per Share:
Primary $ .23 $ .20
======= =======
Fully diluted $ .19 $ .17
======= =======
Weighted Average Shares:
Primary 16,067 13,555
======= =======
Fully diluted 23,321 21,079
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
5PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Six Months Ended
-----------------------
March 30, April 1,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Operating Activities:
Net income $ 3,661 $ 2,687
Adjustments to reconcile net income
to net cash provided by operating activities:
Minority interest expense 575 701
Depreciation and amortization 9,984 5,214
Increase in deferred income taxes 2,545 1,192
Decrease in other deferred items - (797)
Changes in current accounts:
Restricted funds 4,812 4,351
Accounts receivable and unbilled revenues 4,720 4,952
Inventories 812 (1,231)
Other current assets (1,154) 1,489
Accounts payable 4,154 308
Lease obligations payable 441 1,161
Due to parent company 50 (2,015)
Other current liabilities 107 (33)
-------- --------
Net cash provided by operating
activities 30,707 17,979
-------- --------
Investing Activities:
Funding of long-term restricted funds (1,280) (3,284)
Increase in other assets (3,004) -
Purchases of property, plant and equipment (10,672) (1,140)
-------- --------
Net cash used in investing
activities (14,956) (4,424)
-------- --------
Financing Activities:
Due to parent company - 542
Repayment of long-term obligations (18,946) (11,200)
Net proceeds from issuance of subordinated
convertible debentures (Note 2) 35,942 -
Net proceeds from issuance of Company
common stock 175 27,506
Distribution to minority partner (707) (538)
-------- --------
Net cash provided by financing
activities 16,464 16,310
-------- --------
Increase in Cash and Cash Equivalents 32,215 29,865
Cash and Cash Equivalents at Beginning of Period 49,159 14,259
-------- --------
Cash and Cash Equivalents at End of Period $ 81,374 $ 44,124
======== ========
Cash Paid For:
Interest $ 7,927 $ 5,811
Income taxes $ 97 $ 1
The accompanying notes are an integral part of these consolidated financial
statements.
6PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by Thermo Ecotek Corporation (the Company) without audit and, in
the opinion of management, reflect all adjustments of a normal recurring
nature necessary for a fair statement of (a) the results of operations for
the three- and six-month periods ended March 30, 1996 and April 1, 1995,
(b) the financial position at March 30, 1996, and (c) the cash flows for
the six-month periods ended March 30, 1996 and April 1, 1995. Interim
results are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of September 30, 1995, has
been derived from the consolidated financial statements that have been
audited by the Company's independent public accountants. The consolidated
financial statements and notes are presented as permitted by Form 10-Q, and
do not contain certain information included in the annual financial
statements and notes of the Company. The consolidated financial statements
and notes included herein should be read in conjunction with the financial
statements and notes included in the Company's Transition Report on Form
10-K for the nine months ended September 30, 1995, filed with the
Securities and Exchange Commission.
2. Noninterest-bearing Subordinated Convertible Debentures
In March 1996, the Company issued and sold at par $37 million principal
amount of noninterest-bearing subordinated convertible debentures due 2001.
The debentures are convertible into shares of the Company's common stock at
a conversion price of $20.34 per share and are guaranteed on a subordinated
basis by Thermo Electron. Net proceeds were approximately $36 million.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
The Company earns revenues from the operation of independent electric
power generation facilities through joint ventures, limited partnerships or
wholly owned subsidiaries (the Operating Companies). Each Operating Company
sells power under a long-term power sale agreement. The profitability of
operating the Company's facilities depends on the price received for power
under the power sale agreements with power purchasers, on plant performance
or availability, on the degree to which utilities exercise curtailment
rights granted under power sale agreements and on the fuel, operating and
maintenance costs for the facilities. Curtailment rights allow a utility to
require an Operating Company to curtail power output up to pre-established
annual levels during periods of low system demand. A utility commonly
experiences low system demand during periods when hydroelectric power is
available, generally following periods of heavy rain or snow. The
contractually allowable maximum for such curtailment at each of the
Company's Woodland and Mendota plants is 1,000 hours per calendar year,
which was reached in calendar 1995. The Woodland and Mendota plants each
experienced approximately 425 hours of curtailment from January through
7PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Overview (continued)
March 1996, and expect to experience curtailment during the remainder of
fiscal 1996. The Company earns a disproportionately high share of its
income in the months of May to October due to the rate structures under the
power sale agreements relating to its California plants, which provide
strong incentives to operate during this period of high demand. Conversely,
the Company has historically operated at a loss or marginal profit during
the second fiscal quarter due to the rate structure under these agreements.
The Company's profitability is also dependent on the amount of development
expenses that it incurs.
Results of Operations
In June 1995, the Company changed its fiscal year-end from the
Saturday nearest December 31 to the Saturday nearest September 30.
Three Months Ended March 30, 1996 Compared With Three Months Ended April 1,
1995
Revenues in the three months ended March 30, 1996 were $33.5 million,
compared with $31.0 million in the three months ended April 1, 1995, an
increase of $2.5 million, or 8.1%. The increase is primarily due to higher
contractual energy rates at all of the Company's facilities, except the
Hemphill plant, as well as fewer days of scheduled and unscheduled outages
at the Delano plants, offset in part by higher curtailment of power output
at the Mendota and Woodland plants.
The Hemphill and Whitefield Operating Companies have reached an
agreement in principle with Public Service of New Hampshire (PSNH) to
settle certain rate order renegotiations initiated by PSNH. The settlement
agreement is subject to the approval of the New Hampshire Public Utilities
Commission on terms acceptable to both PSNH and the Company, and the
satisfaction of certain other conditions. The principal terms of the
agreement generally call for the Hemphill and Whitefield Operating
Companies to reduce the amount of power sold annually to PSNH to 70% of the
plants' capacities, and to reduce the price per kilowatt paid by PSNH to
$.06 per kilowatt hour, escalating three percent per year for the remainder
of the term of the original, applicable rate order. In consideration for
these reductions, the Operating Companies would receive certain cash
settlement payments, paid over several years. The settlement, if approved
and executed, is not expected to have a material impact on the Company's
consolidated results of operations or financial condition.
The gross profit margin increased to 21% in the three months ended
March 30, 1996, compared with 17% in the three months ended April 1, 1995.
The improvement results primarily from the effect of higher revenues
described above and lower fuel and other operating costs at two of the
Company's California plants.
General and administrative expenses as a percentage of revenues were
8.2% in the three months ended March 30, 1996, compared with 7.5% in the
three months ended April 1, 1995. The change results primarily from an
ongoing increase in international business development efforts.
Interest income increased to $1.1 million in the three months ended
March 30, 1996, compared with $671,000 in the three months ended April 1,
1995, primarily due to increased invested amounts as a result of the
8PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Three Months Ended March 30, 1996 Compared With Three Months Ended
April 1, 1995 (continued)
Company's initial public offering in February 1995, which raised net
proceeds of $27.5 million, and approximatly $36 million of net proceeds
from the Company's issuance of convertible debentures in March 1996.
Interest expense increased to $3.6 million in the three months ended March
30, 1996, compared with $2.6 million in the three months ended April 1,
1995, primarily due to the conversion of the Mendota plant lease to a
capital lease effective April 1995.
The effective tax rate was 45% in the three months ended March 30,
1996, compared with 23% in the three months ended April 1, 1995. The tax
rate in 1996 exceeds the statutory federal rate due to state income taxes.
The 1995 effective tax rate reflects the benefit of tax credits and loss
carryforwards.
Minority interest expense represents the allocation of income from
plant operations to a minority partner in an Operating Company.
Six Months Ended March 30, 1996 Compared With Six Months Ended April 1,
1995
Revenues in the six months ended March 30, 1996 were $67.8 million,
compared with $63.2 million in 1995, an increase of $4.6 million. The
increase is primarily due to higher contractual energy rates in 1996 at all
of the Company's facilities, except the Hemphill plant, as well as fewer
days of scheduled and unscheduled outages at the Delano plants, offset in
part by higher curtailment of power output at the Mendota and Woodland
plants.
The gross profit margin increased to 25% during the six months ended
March 30, 1996, compared with 20% in the six months ended April 1, 1995.
The improvement results largely from the effect of higher revenues and
lower fuel costs.
General and administrative expenses as a percentage of revenues were
7.6% in the six months ended March 30, 1996, compared with 6.0% in the six
months ended April 1, 1995. The change results primarily from an ongoing
increase in international business development efforts.
Interest income increased to $2.4 million in the six months ended
March 30, 1996, compared with $1.2 million in the six months ended April 1,
1995 due to increased invested amounts as a result of the Company's initial
public offering in February 1995 and net proceeds from the Company's
issuance of convertible debentures in March 1996. Interest expense
increased to $7.5 million during the six months ended March 30, 1996,
compared with $5.4 million in the six months ended April 1, 1995, primarily
due to the conversion of the Mendota plant lease to a capital lease
effective April 1995.
The effective tax rates were 38% and 29% in 1996 and 1995,
respectively. The rates in both years reflect the exclusion of income taxed
directly to minority partners, offset in part by state income taxes. The
1995 effective tax rate also reflects the benefit of tax credits and loss
carryforwards.
9PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Liquidity and Capital Resources
Working capital increased to $77.8 million at March 30, 1996 from
$62.0 million at September 30, 1995. The Company had cash, cash
equivalents, and current restricted funds of $88.6 million at March 30,
1996, compared with $61.2 million at September 30, 1995. At March 30, 1996,
current restricted funds held in trust pursuant to certain lease and debt
agreements totaled $7.2 million. The use of an additional $3.9 million of
cash and cash equivalents at March 30, 1996 was also restricted by the
terms of certain lease and financing agreements. These restrictions limit
the ability of the Operating Companies to transfer funds to the Company in
the form of dividends, loans, advances or other distributions.
During the six months ended March 30, 1996, the Company's operating
activities provided cash and restricted funds of $25.9 million. The Company
received approximately $36 million of net proceeds from the issuance of
$37 million principal amount of noninterest-bearing subordinated
convertible debentures in March 1996. The Company used cash of $18.9
million for the repayment of long-term obligations related to two of its
California plants. The Company also used cash of $3.0 million to purchase
an additional 1,500,000 shares of KFX Inc. (KFX) common stock bringing its
total equity interest in KFX to approximately 14%. Pursuant to certain
agreements with KFX, the Company has the right, but not the obligation, to
purchase an additional 1,250,000 shares of KFX common stock for $2.00 per
share in fiscal 1997, and to purchase up to a 51% equity interest in KFX in
fiscal 2000. In addition, during the six months ended March 30, 1996, the
Company expended $10.2 million for the construction of a coal-beneficiation
facility near Gillette, Wyoming and expended $.5 million on the purchase of
other property, plant and equipment. The Company is committed to fund
approximately an additional $31 million for construction of the
coal-beneficiation facility, primarily during the remainder of fiscal 1996.
During the first half of fiscal 1996, the Company distributed $.7 million
to a minority partner of one of its Operating Companies.
The Company is committed to contribute $15 million for a minority
interest in a 185 megawatt combined cycle, steam-turbine
electric-generation facility located in Puerta Plata, Dominican Republic.
Funding is expected to take place by the end of fiscal 1996 unless the
Company notifies its project partner of its intention not to provide
funding and, within 60 days following such notice, the project fails to
pass a prescribed performance test.
Pursuant to an Asset Purchase Agreement between two of the Company's
wholly owned subsidiaries and W.R. Grace & Co. - Conn. (Grace), the Company
agreed to pay $8.0 million, subject to certain adjustments, for the
acquisition of all net assets of Grace's business unit specializing in the
manufacture and distribution of botanical extracts and microbial products
used for pest control. The Company currently expects to complete this
acquisition during its third fiscal quarter, however, completion is subject
to obtaining regulatory approvals and consents of certain third parties, as
well as satisfaction of other closing conditions.
10PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Liquidity and Capital Resources (continued)
The Company expects to fund its existing commitments for the remainder
of fiscal 1996 through its current resources. Although the Company's
projects are designed to produce positive cash flow over the long term, the
Company will have to obtain significant amounts of funds from time to time
to meet project development requirements, including the funding of equity
investments. As the Company acquires, invests in or develops future plants
or technologies, the Company expects to finance them with nonrecourse debt
and to fund equity contributions through internal funds, raising additional
equity or through borrowings from third parties or Thermo Electron. While
Thermo Electron has expressed its willingness to provide funds to the
Company to help finance the Company's equity investments in future
projects, the Company has no agreements with Thermo Electron that assure
funds will be available on acceptable terms, or at all.
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On March 11, 1996, at the Annual Meeting of Shareholders, the
shareholders elected seven directors to a one-year term expiring in 1997.
The directors elected at the meeting were Jerry P. Davis, George N.
Hatsopoulos, John N. Hatsopoulos, Brian D. Holt, Frank Jungers, William A.
Rainville, and Susan F. Tierney. Each nominee for director received
14,872,970 shares voted in favor of his election and 15,204 shares against,
except William A. Rainville who received 14,872,770 shares voted in favor
of his election and 15,404 shares against, and Susan F. Tierney who
received 14,868,670 shares voted in favor of her election and 19,504 shares
against. No broker nonvotes were recorded on the election of directors.
The shareholders also approved a proposal to adopt an employee's stock
purchase plan and to reserve 50,000 shares of the Company's common stock
and 50,000 shares of Thermo Electron's common stock for issuance thereunder
as follows: 14,866,628 shares voted in favor, 13,606 shares voted against,
and 7,940 shares abstained. No broker nonvotes were recorded on the
proposal.
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
11PAGE
<PAGE>
THERMO ECOTEK CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized as of the 3rd day of May 1996.
THERMO ECOTEK CORPORATION
Paul Kelleher
-------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
-------------------------
John N. Hatsopoulos
Chief Financial Officer
12PAGE
<PAGE>
THERMO ECOTEK CORPORATION
Exhibit Index
Exhibit
Number Description of Exhibit Page
------- ----------------------------------------------------- ----
2 Asset Purchase Agreement among Thermo Trilogy
Corporation, Thermo Ecotek International Holdings,
Inc., and W.R. Grace & Co. - Conn. dated March 5, 1996.
Pursuant to Item 601 (b)(2) of registration S-K,
schedules to this Agreement have been omitted. The
Company hereby undertakes to furnish supplementally a
copy of such schedules to the Commission upon request.
4 Fiscal Agency Agreement dated as of March 14, 1996
among the Company, Thermo Electron Corporation, and
Chemical Bank as fiscal agent, relating to $37 million
principal amount of noninterest-bearing subordinated
convertible debentures due 2001.
11 Statement re: Computation of earnings per share.
27 Financial Data Schedule.
Exhibit 2
ASSET PURCHASE AGREEMENT
Among
THERMO TRILOGY CORPORATION,
THERMO ECOTEK INTERNATIONAL HOLDINGS, INC.
and
W. R. GRACE & CO. - CONN.
March 5, 1996
PAGE
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I - THE PURCHASE ............................... 1
1.1 Purchase and Sale of Assets .................. 1
1.2 Assumption of Liabilities .................... 3
1.3 Purchase Price ............................... 7
1.4 The Closing .................................. 8
1.5 Allocation of Purchase Price ................. 9
1.6 Post-Closing Adjustments ..................... 10
1.7 Further Assurances ........................... 12
ARTICLE II - REPRESENTATIONS AND WARRANTIES
OF THE SELLER ........................... 12
2.1 Organization, Qualification and
Corporate Power ............................ 12
2.2 Authority .................................... 13
2.3 Noncontravention ............................. 13
2.4 Financial Statements ......................... 14
2.5 Absence of Certain Changes ................... 14
2.6 Ownership and Condition of Assets ............ 14
2.7 Intellectual Property ........................ 15
2.8 Foreign Companies ............................ 16
2.9 Contracts .................................... 17
2.10 Litigation ................................... 19
2.11 Product Warranty ............................. 19
2.12 Environmental Matters ........................ 19
2.13 Legal Compliance ............................. 20
2.14 Permits and Registrations .................... 20
2.15 Brokers' Fees ................................ 21
2.16 Books and Records ............................ 21
2.17 Customers and Suppliers ...................... 21
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE BUYER 21
3.1 Organization ................................. 21
3.2 Authorization of Transaction ................. 21
3.3 Noncontravention ............................. 22
3.4 Brokers' Fees ................................ 22
3.5 Status as Subsidiaries ....................... 22
3.6 Financial Projections ........................ 22
ARTICLE IV - PRE-CLOSING COVENANTS ..................... 23
4.1 Reasonable Efforts ........................... 23
4.2 Notices and Consents ......................... 22
4.3 Operation of Business ........................ 23
4.4 Full Access .................................. 24
4.5 Exclusivity .................................. 25
ARTICLE V - CONDITIONS TO CLOSING ...................... 25
5.1 Conditions to Obligations of the Buyer ....... 25
5.2 Conditions to Obligations of the Seller ...... 27
PAGE
<PAGE>
5.3 Waiver of Intervening Event .................. 28
ARTICLE VI - POST-CLOSING COVENANTS .................... 28
6.1 Proprietary Information ...................... 28
6.2 Solicitation and Hiring ...................... 29
6.3 Non-Competition; Referral of Customers ....... 29
6.4 Sharing of Data .............................. 30
6.5 Use of Labels ................................ 31
6.6 Cooperation in Litigation .................... 31
6.7 Collection of Accounts Receivable and
Contracts in Progress ...................... 31
6.8 Employees .................................... 32
6.9 Detachment of Machinery and Equipment ........ 32
6.10 Defense of Patents ........................... 33
6.11 Intercompany Agreements ...................... 33
6.12 Margo Consents ............................... 33
6.13 Maintenance of Pesticide Registrations ....... 33
ARTICLE VII - INDEMNIFICATION .......................... 34
7.1 Indemnification by Seller .................... 34
7.2 Indemnification by Buyer ..................... 34
7.3 Claims for Indemnification ................... 35
7.4 Defense by the Indemnifying Party ............ 35
7.5 Payment of Indemnification Obligation ........ 36
7.6 Survival ..................................... 36
7.7 Limitations on Amount ........................ 37
7.8 No Consequential or Lost Profit Damages......... 37
ARTICLE VIII - TERMINATION ............................. 37
8.1 Termination of Agreement ..................... 37
8.2 Effect of Termination ........................ 38
ARTICLE IX - DEFINITIONS ............................... 39
ARTICLE X - MISCELLANEOUS .............................. 40
10.1 Press Releases and Announcements ............ 40
10.2 No Third Party Beneficiaries ................ 40
10.3 Entire Agreement ............................ 40
10.4 Succession and Assignment ................... 40
10.5 Counterparts ................................ 41
10.6 Headings .................................... 41
10.7 Notices ..................................... 41
10.8 Governing Law ............................... 42
10.9 Amendments and Waivers ...................... 42
10.10 Severability ................................ 42
10.11 Expenses .................................... 42
10.12 Specific Performance ........................ 43
10.13 Submission to Jurisdiction .................. 43
10.14 Construction ................................ 43
10.15 Incorporation of Exhibits and Schedules ..... 44
Exhibit A - Form of Bill of Sale
PAGE
<PAGE>
Exhibit B - Form of Instrument of Assumption of Liabilities
Exhibit C - Form of Lease
Exhibit D - Financial Statements
Exhibit E - Margo Financial Statements
Schedule 1.1(b) - Excluded Assets
Schedule 6.8 - Employees to be Offered Employment by the Buyer
Schedule 6.9 - Equipment to be Detached
Disclosure Schedule
PAGE
<PAGE>
ASSET PURCHASE AGREEMENT
This Agreement is entered into as of March 5, 1996 by and
among Thermo Trilogy Corporation, a Delaware corporation ("TTC"),
and Thermo Ecotek International Holdings, Inc., a Cayman Island
corporation ("TEIH") (collectively, "Buyer"), and W. R. Grace &
Co.-Conn., a Connecticut corporation (the "Seller"). The Buyer
and the Seller are referred to collectively herein as the
"Parties."
Preliminary Statement
The Buyer desires to purchase, and the Seller desires to
sell, the business and assets comprising the Seller's business of
identifying, developing, manufacturing, marketing and selling
biopesticide products and comprising its Biopesticides Business
Unit (the "Business"), for the consideration set forth below and
the assumption of certain of the Seller's liabilities set forth
below relating to the Business, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the representations,
warranties and covenants herein contained, the Parties agree as
follows.
ARTICLE I
THE PURCHASE
1.1 Purchase and Sale of Assets.
.1(a) Upon and subject to the terms and conditions
of this Agreement, the Buyer shall purchase from the Seller, and
the Seller shall sell, transfer, convey, assign and deliver to
the Buyer, at the Closing (as defined in Section 1.4(a)), for the
consideration specified below in this Article I, all of the
Seller's right, title and interest in and to all of the assets of
the Seller primarily relating to or primarily used in the
Business and existing as of the Closing (collectively, the
"Acquired Assets"), including without limitation:
(i) all trade and other accounts receivable and
notes receivable (the "Accounts Receivable") and all unbilled
amounts for contracts in progress (the "Contracts in Progress");
(ii) all inventories of raw materials, work in
process, finished goods, supplies, packaging materials, spare
parts and similar items;
(iii) all machinery, equipment, tools and tooling,
furniture and motor vehicles, including without limitation those
set forth in Section 2.6(c) of the Disclosure Schedule;
(iv) all (A) patents, patent applications, patent
disclosures and all related continuation, continuation-in-part,
divisional, reissue, re-examination, utility model, certificate
PAGE
<PAGE>
of invention and design patents, patent applications,
registrations and applications for registrations, (B) trademarks,
service marks, trade drafts, logos and trade names and
registrations and applications for registration thereof
(C) copyrights and registrations and applications for
registration thereof, (D) computer software, data and
documentation, (E) trade secrets and confidential business
information, whether patentable or nonpatentable and whether or
not reduced to practice, know-how, manufacturing and product
processes and techniques, research and development information,
copyrightable works, financial, marketing and business data,
pricing and cost information, business and marketing plans and
customer and supplier lists and information, (F) other
proprietary rights relating to any of the foregoing (including
without limitation remedies against infringements thereof and
rights of protection of interest therein under the laws of all
jurisdictions) and (G) copies and tangible embodiments thereof
(collectively, "Intellectual Property"), including without
limitation the Intellectual Property set forth in Section 2.7(c)
of the Disclosure Schedule;
(v) all rights under contracts, agreements or
instruments (including without limitation any agreements or
instruments securing any amounts owed to the Seller in connection
with the Business, any leases or subleases for real property, any
equipment leases, and any licenses or sublicenses issued to or by
the Seller relating to Intellectual Property) (collectively, the
"Assigned Contracts"), including without limitation those
contracts and licenses set forth in Sections 2.7(d) and 2.9 of
the Disclosure Schedule;
(vi) all permits, licenses, registrations,
certificates, orders, approvals, franchises, variances and
similar rights ("Permits") issued by or obtained from any
foreign, federal, state or local governmental, regulatory or
administrative authority or agency, court or arbitrational
tribunal (a "Governmental Entity"), including without limitation
all registrations and pending registrations related to the
manufacture, sale, distribution or use of pesticides ("Pesticide
Registrations");
(vii) 800,000 equity shares, par value rs. 10 per
share (the "Margo Shares"), of PJ Margo Private Limited, a
company organized in the State of Karnataka, India under the
Indian Companies Act, 1956 (1 of 1956) ("Margo") and one share of
the capital stock, Baht 100 par value per share, of Neem Company
Ltd., a corporation organized in Thailand ("Neem Co."), and all
rights of the Seller under the Investment Agreement dated
December 31, 1994 (the "Investment Agreement") among Polyagri
Limited, P.F.C. Company Ltd., the Seller, Neem Co. and certain
Thai citizens specified therein (the share of Neem Co. capital
stock and the rights under the Investment Agreement are
collectively referred to as the "Neem Shares") (Margo and Neem
Co. are collectively referred to as the "Foreign Companies");
(viii) microbial cultures of Gliocladium 21,
Paecyliomyces Fumaroses and Rhizobium soybean growth enhancers;
PAGE
<PAGE>
(ix) all rights to enforce any confidentiality
agreements between the Seller and its employees to the extent
that such confidentiality agreements relate to the Business; and
(x) all books, records, accounts, ledgers, files,
documents, correspondence, lists, architectural drawings or
specifications, manufacturing and procedural manuals, advertising
and promotional materials, studies, reports and other printed or
written materials.
.1(b) Notwithstanding the provisions of
Section 1.1(a), the Acquired Assets shall not include those
assets listed on Schedule 1.1(b) attached hereto (collectively,
the "Excluded Assets").
1.2 Assumption of Liabilities.
.2(a) Upon and subject to the terms and conditions
of this Agreement, TTC shall assume and become responsible for,
upon the Closing, all of the following liabilities of the Seller
(collectively, the "Assumed Liabilities"):
(i) the liabilities of the Seller incurred in
connection with the Business as set forth on the face of the
unaudited statement of net assets of the Business dated as of
December 31, 1995 (i.e., accounts payable, progress payments and
advances and other current liabilities), included in the
Financial Statements (the "December 31, 1995 Balance Sheet"), to
the extent they have not been paid or discharged prior to the
Closing;
(ii) all liabilities of the Seller which have
arisen after the date of the December 31, 1995 Balance Sheet in
the ordinary course of business and which are of the same type as
those set forth on the face of the December 31, 1995 Balance
Sheet (i.e., accounts payable, progress payments and advances and
other current liabilities), to the extent that they have not been
paid or discharged prior to the Closing; provided that this
clause (ii) shall not encompass any such liabilities which relate
to any breach of contract, breach of warranty, tort, infringement
or violation of law or which arose out of any charge, complaint,
action, suit, proceeding, hearing, investigation, claim or
demand;
(iii) any obligation of the Seller under an
Assigned Contract arising prior to the Closing to the extent the
Seller has no knowledge as of the Closing Date of any breach
thereof;
(iv) any liability of the Seller for breach of
warranty arising prior to the Closing with respect to any product
which is continuing to be manufactured as part of the Business by
the Seller as of the Closing Date; provided, however, that in no
event shall TTC have any liability hereunder for tort claims,
claims alleging health risk or personal injury or any claims
related to property damage (including without limitation crop
damage);
PAGE
<PAGE>
(v) all obligations of the Seller arising after
the Closing under the Assigned Contracts;
(vi) all liability of the Seller arising out of
any claim, suit, action, arbitration, proceeding, investigation
or similar matter relating to (a) any infringement or alleged
infringement of any patent by the Seller in the conduct of the
Business or (b) any violation or alleged violation of law (other
than violations or alleged violations of Environmental Laws) by
the Seller if, with respect to both (a) and (b), (I) the Seller
has no knowledge as of the Closing Date of the pendency or threat
of such claim, suit, action, arbitration, proceeding,
investigation or similar matter, and (II) the conduct giving rise
to such claim, suit, action, arbitration, proceeding,
investigation or similar matter is continuing as of the Closing
Date and is continued by TTC in its conduct of the Business;
provided that in no event shall TTC have any liability hereunder
for tort claims; and
(vii) any other liability of the Seller incurred in
connection with the Business (other than Retained Liabilities)
arising prior to the Closing if (a) such liability is less than
$5,000 and (b) Seller has no knowledge of such liability on the
Closing Date; provided, however, that liabilities that arise from
the same violation or alleged violation, events, facts or
circumstances shall be aggregated for purposes of calculating the
amount of any liability under this Section 1.2(a)(vii).
.2(b) The Buyer shall not assume or become
responsible for, and the Seller shall remain liable for, any and
all liabilities or obligations (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated,
whether accrued or unaccrued, whether due or to become due, and
whether claims with respect thereto are asserted before or after
the Closing) of the Seller which are not Assumed Liabilities
(collectively, the "Retained Liabilities"). The Retained
Liabilities shall include, without limitation, the following:
(i) all liabilities of the Seller for costs and
expenses incurred in connection with this Agreement or the
consummation of the transactions contemplated by this Agreement;
(ii) all liabilities or obligations of the Seller
under this Agreement or any agreement or instrument attached as
an exhibit hereto or contemplated to be entered into hereby
(collectively, the "Ancillary Agreements");
(iii) all liabilities of the Seller for any taxes
(including without limitation deferred taxes or taxes measured by
income of the Seller earned prior to the Closing, any liabilities
for federal or state income tax and FICA taxes of employees of
the Seller which the Seller is legally obligated to withhold
prior to the Closing, any liabilities for employer FICA and
unemployment taxes incurred prior to the Closing, and any
liabilities for sales, use, ad valorem or excise taxes or customs
and duties incurred prior to the Closing);
PAGE
<PAGE>
(iv) all liabilities and obligations of the Seller
under any agreements, contracts, leases or licenses which are not
Assigned Contracts;
(v) other than as expressly assumed by TTC
pursuant to Section 1.2(a)(iv), all obligations of the Seller for
rework, replacement or return of products sold prior to the
Closing;
(vi) all liabilities of the Seller for any product
liability claim, including damage to persons or property,
relating to products sold prior to the Closing;
(vii) other than as expressly assumed by TTC
pursuant to Section 1.2(a)(vi), all liabilities and obligations
of the Seller arising out of events, conduct or conditions
existing or occurring prior to the Closing that constitute a
violation of or noncompliance with any law, rule or regulation,
any judgment, decree or order of any Governmental Entity, or any
Permit;
(viii) all liabilities of the Seller resulting from
(A) any releases of any Materials of Environmental Concern (as
defined in Section 2.12(b)) into the environment in connection
with the operation of the Business by the Seller or any
predecessor business or company prior to the Closing Date or for
which Seller is otherwise liable; or (B) any violation of any
Environmental Law by the Seller or any predecessor business or
company which occurred prior to the Closing Date;
(ix) all liabilities of the Seller for injury to
or death of persons or damage to or destruction of property
occurring prior to the Closing (including without limitation any
workers compensation claim);
(x) all inter-company liabilities of the Seller;
(xi) all accounts payable to Margo in respect of
goods in transit;
(xii) all liabilities and obligations of the Seller
to pay severance or other benefits to any employee of the Seller
whose employment is terminated (or treated as terminated) in
connection with the consummation of the transactions contemplated
by this Agreement and all liabilities resulting from the
termination of employment of employees of the Seller prior to the
Closing that arose under any federal or state law or under any
employee benefit plan established or maintained by the Seller;
(xiii) all liabilities and obligations of the Seller
for all compensation and benefits accrued by employees of the
Seller employed in the Business, including without limitation,
accrued vacation time and sick leave, premiums or benefits under
any employee benefit plan and severance pay; and
(xiv) other than as expressly assumed by TTC
pursuant to Section 1.2(a)(vi) and 1.2(a)(vii), all liability of
the Seller arising out of any claim, suit, action, arbitration,
PAGE
<PAGE>
proceeding, investigation or other similar matter which commenced
or relates to the ownership of the Acquired Assets or the
operation of the Business on or prior to the Closing.
.2(c) Notwithstanding anything herein to the
contrary, the maximum aggregate amount that TTC shall be required
to expend (including without limitation monetary damages, fines,
fees, penalties, interest obligations, deficiencies, losses,
amounts paid in settlement, court costs, costs of investigation,
fees and expenses of attorneys, accountants, financial advisers
and other experts, and other expenses of litigation, arbitration
or investigation) in respect of the liabilities assumed pursuant
to Sections 1.2(a)(iii), 1.2(a)(iv), 1.2(a)(vi) and 1.2(a)(vii)
shall not exceed the sum of (i) $100,000 plus (ii) one-half of
amounts in excess of said $100,000 up to an additional excess
amount of $400,000. In no event shall the aggregate amount
payable by TTC in respect of the liabilities assumed pursuant to
Sections 1.2(a)(iii), 1.2(a)(iv), 1.2(a)(vi) and 1.2(a)(vii)
exceed $300,000. In calculating the aggregate amount which TTC
has expended in respect of the liabilities assumed pursuant to
Sections 1.2(a)(iii), 1.2(a)(iv), 1.2(a)(vi) and 1.2(a)(vii),
amounts expended on a single liability, claim, action, suit,
investigation, arbitration, proceeding or similar matter which
aggregate less than $5,000 shall not be considered; provided,
however, that amounts expended on matters that arise from the
same violation or alleged violation, events, facts or
circumstances shall be aggregated for purposes of this
calculation.
.2(d) As used in this Agreement, the words
"knowledge," "to the knowledge of Seller," "to the best knowledge
of Seller" or similar words shall mean the actual knowledge of
the employees of the Seller (other than employees of the
Business) and of W. R. Grace & Co. after inquiry that is
reasonable in light of the subject matter involved and the
position held by the person in question, including without
limitation due inquiry made by such persons of the Subject
Business Executives; provided, however, that with respect to
knowledge as it applies to Margo, knowledge shall mean the actual
knowledge of such employees and the actual knowledge of the
directors of Margo who serve in such position at the Seller's
request. The "Subject Business Executives" shall mean J.L. Su,
J. Eyal, J.F. Walter, T.R. Gouker and K. Warkentien.
(e) Following receipt of notice of the filing of any
claim, suit or action or of the commencement of any proceeding or
investigation with respect to a liability assumed by TTC pursuant
to Sections 1.2(a)(iii), 1.2(a)(iv), 1.2(a)(vi) and 1.2(a)(vii),
TTC shall use commercially reasonable efforts to conduct the
Business so as to mitigate further damages related to such
liability.
1.3 Purchase Price. The purchase price to be paid by the
Buyer for the Acquired Assets shall be SEVEN MILLION DOLLARS
($7,000,000), increased or decreased by the respective amounts by
which the Working Capital (as defined in Section 1.6) exceeds or
is less than $2,555,000 (the "Purchase Price"), payable by wire
transfer or other delivery of immediately available funds. The
PAGE
<PAGE>
Buyer and Seller shall agree upon an estimate of the Purchase
Price no less than two business days prior to the Closing, such
estimated Purchase Price to be paid at the Closing.
As additional consideration for the Acquired Assets, TTC
shall pay the Seller a royalty payment for each calendar year
ending after the Closing Date through the calendar year ending
December 31, 2000 equal to 7% of the amount by which (a) the
gross revenues derived by TTC from the sale of products
containing any of the following active ingredients:
Azadirachtin, Neem Oil, Gliocladium 21, Paecyliomyces Fumaroses,
Clove Oil or Rhizobium soybean growth enhancers (the "Active
Ingredients") exceeds (b) a base amount (the "Base Amount"). Any
amounts payable to Seller with respect to any calendar year
hereunder shall be paid within 60 days of the end of such
calendar year. Within 60 days of the end of each calendar year
through the year ending December 31, 2000, TTC shall deliver to
the Seller a certificate signed by its chief financial officer
certifying the gross revenues derived from the sale of products
containing any of the Active Ingredients by TTC for such year.
TTC shall keep complete and accurate books and records of such
revenues and preserve such records for three years after the end
of the applicable fiscal year. Seller shall have the right,
during normal business hours and upon reasonable notice to TTC,
to inspect such books and records for purposes of auditing the
accuracy of TTC's reports. Any dispute relating to or in
connection with this Section shall be submitted to the Neutral
Accountants (as defined in Section 1.6(b)) for resolution.
The Base Amount shall equal $14,000,000, except that for the
year ending December 31, 1996, the Base Amount shall equal the
product of (x) $14,000,000 times (y) a fraction, the numerator of
which is the number of days from the Closing Date through
December 31, 1996 and the denominator of which is 366. The Base
Amount shall be increased by the gross revenues from the sales of
products whose active ingredients include one or more of the
Active Ingredients and are derived from any business or assets
acquired by TTC subsequent to the Closing Date (such gross
revenues to calculated for the one-year period prior to the date
of acquisition).
1.4 The Closing.
.4(a) The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices
of Hale and Dorr in Boston, Massachusetts, commencing at
9:00 a.m. on the date which is five business days after the
satisfaction or waiver of all conditions to the obligations of
the Parties to consummate the transactions contemplated hereby
(the "Closing Date").
.4(b) At the Closing:
(i) the Seller shall deliver to the Buyer the
various certificates, instruments and documents referred to in
Section 5.1; provided that Seller shall not be in default under
this Section 1.4(b)(i) if the conditions specified in
Section 5.1(b) have not been met because of the occurrence of an
PAGE
<PAGE>
Intervening Event (as defined in Section 8.2(a));
(ii) the Buyer shall deliver to the Seller the
various certificates, instruments and documents referred to in
Section 5.2; provided that Buyer shall not be in default under
this Section 1.4(b)(ii) if the conditions specified in
Section 5.2(a) have not been met because of circumstances beyond
Buyer's control;
(iii) the Seller shall execute and deliver to TTC a
bill of sale in the form attached hereto as Exhibit A and execute
and deliver or obtain, as appropriate, such other instruments of
conveyance (e.g., trademark assignments or patent assignments) as
TTC may reasonably request in order to effect the sale, transfer,
conveyance and assignment to TTC of valid ownership of the
Acquired Assets other than the Margo Shares and the Neem Shares;
(iv) the Seller shall execute and deliver to TEIH
stock certificates (in the case of Margo), stock powers,
assignments and other appropriate instruments of conveyance
necessary to transfer to TEIH ownership of the Margo Shares and
the Neem Shares;
(v) TTC shall execute and deliver to the Seller
an instrument of assumption of liabilities in the form attached
hereto as Exhibit B and such other instruments as the Seller may
reasonably request in order to effect the assumption by TTC of
the Assumed Liabilities;
(vi) the Seller and TTC shall execute and deliver
to each other the lease of certain premises (the "Leased
Premises") in the form attached hereto as Exhibit C;
(vii) the Buyer shall pay to the Seller the
estimated Purchase Price as specified in Section 1.3;
(viii) the Seller shall deliver to TTC, or otherwise
put TTC in possession and control of, all of the Acquired Assets
set forth in Section 2.6(c) of the Disclosure Schedule; and
(ix) the Buyer and the Seller shall execute and
deliver to each other a cross-receipt evidencing the transactions
referred to above.
1.5 Allocation of Purchase Price. The Buyer and the Seller
agree to allocate the Purchase Price (and all other capitalizable
costs), as soon as practicable following the Closing, among the
Acquired Assets. The Parties agree that such allocation will be
made in the manner required by Section 1060 of the Internal
Revenue Code of 1986, as amended.
1.6 Post-Closing Adjustments. The Purchase Price set forth
in Section 1.3 shall be subject to adjustment after the Closing
Date as follows:
.6(a) On the 90th day after the Closing Date, the
Seller shall prepare and deliver to TTC a statement of net assets
reflecting only the Acquired Assets (other than the Margo Shares
PAGE
<PAGE>
and Neem Shares) and Assumed Liabilities (the "Initial Closing
Statement") as of the close of business on the Closing Date
(without giving effect to the transactions contemplated by this
Agreement). The Seller shall prepare the Initial Closing
Statement in accordance with the accounting principles used in,
and applied on a basis consistent with, the preparation of the
Financial Statements (as defined in Section 2.4(a)). The Initial
Closing Statement shall also set forth the Seller's determination
of the Purchase Price, as adjusted pursuant to this Section 1.6.
Any Accounts Receivable as of the Closing Date which have not
been collected by TTC on or prior to the 90th day after the
Closing Date shall be written off and not appear as current
assets on the Initial Closing Statement. Such Accounts
Receivable shall be assigned by TTC to the Seller immediately
following the 90th day after the Closing Date, and any Accounts
Receivable which have been so written off and are subsequently
collected by TTC shall be promptly paid to the Seller. Within 21
days after the Closing Date, the Seller and TTC shall have
jointly tested the quality and determined the quantity of the
inventory of the Business as of the Closing Date, and the value
of inventory as set forth in the Initial Closing Statement shall
be (i) reduced to reflect any inventory that is obsolete, of
below-standard quality, unusable or unsalable or a quantity of
inventory that is less than that set forth on the Initial Closing
Statement or (ii) increased to reflect a quantity of inventory
that is more than that set forth on the Initial Closing
Statement.
.6(b) TTC shall deliver to the Seller within 30
days after receiving the Initial Closing Statement a detailed
statement describing its objections (if any) thereto. Failure of
TTC to so object to the Initial Closing Statement shall
constitute acceptance thereof, whereupon the Initial Closing
Statement shall be deemed to be the Closing Statement. TTC and
the Seller shall use reasonable efforts to resolve any such
objections, but if they do not reach a final resolution within 15
days after the Seller has received the statement of objections,
TTC and the Seller shall engage Coopers & Lybrand (the "Neutral
Accountants") to resolve any remaining objections. The Neutral
Accountants promptly shall determine whether the objections
raised by TTC are appropriate. The Initial Closing Statement
shall be adjusted to the extent such objections are determined to
be appropriate and, as so adjusted, shall be the "Closing
Statement." Such determination by the Neutral Accountants shall
be conclusive and binding upon TTC and the Seller, absent fraud
or manifest error. Nothing herein shall be construed to
authorize or permit the Neutral Accountants to determine (i) any
question or matter whatever under or in connection with this
Agreement except the determination of what adjustments, if any,
must be made in one or more of the items reflected in the Initial
Closing Statement, and (ii) an adjustment to an item on the
Initial Closing Statement that is outside of the range defined by
amounts as finally proposed by the Seller and TTC, respectively.
.6(c) TTC and the Seller shall share equally the
fees and expenses of the Neutral Accountants in connection with
the resolution of any dispute pursuant to paragraph (b) above.
PAGE
<PAGE>
.6(d) If the Working Capital (as defined below) as
shown on the Closing Statement exceeds $2,555,000.00, the
Purchase Price shall equal $7,000,000 plus the amount of such
excess.
.6(e) If the Working Capital as shown on the
Closing Statement is less than $2,555,000.00, the Purchase Price
shall equal $7,000,000 less the amount of such deficiency.
.6(f) If the Purchase Price as adjusted is more
than the estimated Purchase Price paid at the Closing, TTC shall
pay to the Seller, by wire transfer or other delivery of
immediately available funds, within three business days after the
date on which the Closing Statement is finally determined
pursuant to this Section 1.6, an amount equal to such excess
(plus interest thereon at 8% per annum from the Closing Date).
If the Purchase Price as adjusted is less than the estimated
Purchase Price paid at the Closing, the Seller shall pay to TTC,
by wire transfer or other delivery of immediately available
funds, within three business days after the date on which the
Closing Statement is finally determined pursuant to this
Section 1.6, an amount equal to such deficiency (plus interest
thereon at 8% per annum from the Closing Date).
.6(g) "Working Capital" shall mean the difference
between current assets and current liabilities (other than
accounts payable to Margo in respect of goods in transit, which
do not constitute an Assumed Liability), determined in accordance
with United States generally accepted accounting principles,
consistently applied.
.6(h) For purposes of Sections 1.6(d) and 1.6(e),
Working Capital as shown on the Closing Statement shall be deemed
to be increased by (i) the amount of capital expenditures made by
the Seller with respect to the Mitchfield tolling facility up to
a maximum of $90,000, (ii) the amount of expenditures made by the
Seller in connection with purchasing accounting software related
to the Business up to a maximum of $42,000, (iii) any other
capital expenditures incurred by the Seller in connection with
the Business after the date hereof and prior to the Closing Date
which are approved in writing by TTC and (iv) if a dividend with
respect to Margo's March 31, 1996 fiscal year has not been
declared following the date hereof and prior to the Closing Date
(with a record date prior to the Closing Date) on the Margo
Shares, an amount equal to the United States dollar equivalent on
the Closing Date of 800,000 rupees less Indian taxes that would
be payable on a dividend of such amount.
.6(i) If the Purchase Price is adjusted pursuant to
this Section 1.6, the allocation of the Purchase Price among the
Acquired Assets (other than the Margo Shares and the Neem Shares)
as set forth in Section 1.5 shall be appropriately modified to
reflect increases or decreases in the various asset categories
which give rise to such adjustments.
1.7 Further Assurances. At any time and from time to time
after the Closing, at the request of the Buyer and without
further consideration, the Seller shall execute and deliver such
PAGE
<PAGE>
other instruments of sale, transfer, conveyance and assignment
and take such action as the Buyer may reasonably determine is
necessary to transfer, convey and assign to the Buyer, and to
confirm Buyer's rights to, title in and ownership of, the
Acquired Assets and to place the Buyer in actual possession and
operating control thereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to Buyer that the
statements contained in this Article II are true and correct,
except as set forth in the disclosure schedule attached hereto
(the "Disclosure Schedule"). The Disclosure Schedule shall be
arranged in sections corresponding to the numbered sections
contained in this Article II.
2.1 Organization, Qualification and Corporate Power. The
Seller is a corporation duly organized, validly existing and in
corporate and tax good standing under the laws of the state of
its incorporation. The Seller has all requisite corporate power
and authority to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it.
2.2 Authority. The Seller has all requisite power and
authority to execute and deliver this Agreement and the Ancillary
Agreements and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the
Ancillary Agreements and the performance by the Seller of this
Agreement and the Ancillary Agreements and the consummation by
the Seller of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary corporate
action on the part of the Seller. This Agreement has been duly
and validly executed and delivered by the Seller and constitutes,
and each of the Ancillary Agreements, upon its execution and
delivery by the Seller, will constitute, valid and binding
obligations of the Seller, enforceable against the Seller in
accordance with their respective terms.
2.3 Noncontravention. Neither the execution and delivery
of this Agreement or the Ancillary Agreements by the Seller, nor
the consummation by the Seller of the transactions contemplated
hereby or thereby, will, directly or indirectly (with or without
notice or lapse of time) (a) conflict with or violate any
provision of the charter or By-laws of the Seller or any
resolution adopted by the board of directors or the stockholders
of the Seller, (b) to the knowledge of the Seller, conflict with
or violate any of the provisions of the Organizational Documents
(as defined in Section 2.8) of Margo or any resolution adopted by
the board of directors or the stockholders of Margo, (c) except
as set forth in Section 2.3 of the Disclosure Schedule, require
on the part of the Seller any filing with, or any permit,
authorization, consent or approval of, any Governmental Entity
(other than Indian and Thai Governmental Entities) or give any
Governmental Entity (other than Indian and Thai Governmental
Entities) the right to challenge any of the transactions
PAGE
<PAGE>
contemplated by this Agreement or the Ancillary Agreements,
(d) except as set forth in Section 2.3 of the Disclosure
Schedule, with respect to the transfer of the Margo Shares,
require on the part of the Seller any filing with any
Governmental Entity or require the granting to the Seller by any
Governmental Entity of any permit, authorization, consent or
approval, (e) except as set forth in Section 2.3 of the
Disclosure Schedule, conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify or cancel
any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest (as defined below)
or other arrangement to which the Seller or Margo is a party or
by which the Seller or Margo is bound or to which any of their
assets are subject (provided that to the extent such
representation is made with respect to Margo, it is made only to
the extent of Seller's knowledge), (f) result in the imposition
of any Security Interest upon any of the Acquired Assets or
(g) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Seller or to Margo or any of their
properties or assets (provided that to the extent such
representation is made with respect to Margo, it is made only to
the extent of Seller's knowledge). For purposes of this
Agreement, "Security Interest" means any mortgage, pledge,
security interest, encumbrance, charge, or other lien (whether
arising by contract or by operation of law).
2.4 Financial Statements. The Seller has provided to the
Buyer unaudited statements of net assets of the Business as at
December 31, 1995 and September 30, 1995 and unaudited statements
of operations for the periods then ended, which statements are
attached hereto as Exhibit D (collectively, the "Financial
Statements"). The Financial Statements have been prepared in
accordance with the accounting principles and procedures set
forth in Section 2.4 of the Disclosure Schedule applied on a
consistent basis throughout the periods covered thereby and are
consistent with the books and records of the Seller. The Seller
has provided to the Buyer the Balance Sheet and Profit and Loss
Account of Margo as at and for the year ended March 31, 1995,
which is attached hereto as Exhibit E (the "Margo Financial
Statements"). To the knowledge of Seller, the Margo Financial
Statements have been prepared in accordance with the accounting
principles and procedures described in the notes thereto and
present fairly the state of affairs and profits of Margo as of
the respective dates thereof and for the periods referred to
therein and are consistent with the books and records of Margo.
2.5 Absence of Certain Changes. To the knowledge of the
Seller, since December 31, 1995, except as set forth in
Section 2.5 of the Disclosure Schedule, (a) there has not been
any material adverse change in the assets, business, financial
condition or results of operations of the Business or Margo,
(b) the Seller has not taken any of the actions set forth in
paragraphs (a) through (j) of Section 4.3 and (c) the Board of
Directors of Margo has not authorized Margo to take any of the
actions set forth in paragraphs (a) through (j) of Section 4.3
other than the Permitted Actions (as defined in Section 4.3).
PAGE
<PAGE>
2.6 Ownership and Condition of Assets.
.6(a) The Seller is the true and lawful owner of,
and has good title to, all of the Acquired Assets, free and clear
of all Security Interests, except for those Security Interests
that do not secure borrowings or other obligations and will not
interfere with the continued use of the Acquired Assets by TTC
following the Closing. Upon execution and delivery by the Seller
to TTC of the instruments of conveyance referred to in
Section 1.4(b)(iii), TTC will become the true and lawful owner
of, and will receive good title to, the Acquired Assets other
than the Margo Shares and the Neem Shares, free and clear of all
Security Interests other than those described above.
.6(b) Except for the Excluded Assets, the Acquired
Assets include all of the assets primarily used for the conduct
of the Business as presently conducted and include all of the
Intellectual Property used in the Business as presently
conducted. The tangible Acquired Assets that are primarily used
in the Business as conducted during the three-month period prior
to the date hereof are, in the aggregate, free from material
defects, and have been maintained in good operating condition and
repair (subject to normal wear and tear).
.6(c) Section 2.6(c) of the Disclosure
Schedule lists all Acquired Assets which are tangible personal
property having an original cost of more than $25,000.
2.7 Intellectual Property.
.7(a) Upon execution and delivery by the Seller to
TTC of the instruments of conveyance referred to in
Section 1.4(b)(iii), each item of Intellectual Property owned by
the Seller will be owned by TTC immediately following the
Closing, and each item of Intellectual Property available for use
by the Seller will be available for use by TTC, subject to
obtaining any required consents or approvals, on identical terms
and conditions immediately following the Closing. The Seller has
taken reasonable measures to protect the proprietary nature of
each item of Intellectual Property, and to maintain in confidence
all trade secrets and confidential information, that it owns or
uses in connection with the Business. To the knowledge of the
Seller except as set forth in Section 2.7(a) of the Disclosure
Schedule, no other person or entity has any rights to any of the
patents used in the Business or used by Margo (except pursuant to
agreements or licenses specified in Section 2.7(c) or 2.7(d) of
the Disclosure Schedule), and no other person or entity is
infringing, violating or misappropriating any of the patents used
in the Business or used by Margo.
.7(b) To the best knowledge of the Seller, the
business, operations and activities of the Business and of Margo
as presently conducted or as conducted at any time within the six
years prior to the date of this Agreement, have not infringed or
violated, or constituted a misappropriation of, and do not now
infringe or violate, or constitute a misappropriation of, any
patent rights of any other person or entity. Except as specified
PAGE
<PAGE>
in Section 2.7(b) of the Disclosure Schedule, the Seller has not
received any written complaint, claim or notice alleging any
infringement, violation or misappropriation of any intellectual
property rights of any other person or entity.
.7(c) Section 2.7(c) of the Disclosure Schedule
identifies each patent or trademark registration which has been
issued or is owned by the Seller with respect to any Intellectual
Property or, to the knowledge of Seller, has been issued to or is
owned by Margo, identifies each pending patent application or
application for trademark registration which the Seller has made
or which the Seller owns with respect to any Intellectual
Property or, to the knowledge of the Seller, which Margo has made
or owns, and identifies each license or other agreement pursuant
to which the Seller has granted any rights to any third party
with respect to any such Intellectual Property. The Seller has
delivered or made available to the Buyer, correct and complete
copies of all such patents, trademark registrations and
applications, and has made available to the Buyer correct and
complete copies of all other written documentation evidencing
ownership of, and any claims or disputes relating to, each such
item. The Seller has delivered or made available to the Buyer
correct and complete copies of all such licenses and agreements
as amended to date. The Seller has paid all maintenance fees
required to be paid on or prior to the date hereof in respect of
each item of Intellectual Property.
.7(d) Section 2.7(d) of the Disclosure Schedule
identifies each agreement (other than confidentiality, secrecy or
nondisclosure agreements) pursuant to which the Seller uses or
has the right to use any item of Intellectual Property that is
owned by a party other than the Seller. The Seller has supplied
the Buyer with correct and complete copies of all licenses,
sublicenses or other agreements (as amended to date) pursuant to
which the Seller uses such Intellectual Property, all of which
are listed on Section 2.7(d) of the Disclosure Schedule. Except
as set forth in Section 2.7(d) of the Disclosure Schedule, with
respect to each such item of Intellectual Property:
(i) with regard to such license, sublicense or
other agreement, to the Seller's knowledge, no party is in breach
or default, and no event has occurred which with notice or lapse
of time would constitute a breach or default or permit
termination, modification or acceleration thereunder;
(ii) to the Seller's knowledge, the underlying
item of Intellectual Property is not subject to any outstanding
judgment, order, decree, stipulation or injunction; and
(iii) Seller has not agreed to indemnify any person
or entity for or against any interference, infringement,
misappropriation or other conflict with respect to such item.
2.8 Foreign Companies. Section 2.8 of the Disclosure
Schedule sets forth for each Foreign Company (a) its name and
jurisdiction of incorporation, (b) the number of shares of
authorized capital stock of each class of its capital stock,
(c) the number of issued and outstanding shares of each class of
PAGE
<PAGE>
its capital stock, the names of the holders thereof and the
number of shares held by each such holder, and (d) its directors
and officers. To the knowledge of Seller, Margo is a corporation
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. To the knowledge
of the Seller, Margo is duly qualified to conduct business and is
in corporate and tax good standing under the laws of each
jurisdiction in which the nature of its businesses or the
ownership or leasing of its properties requires such
qualification. To the knowledge of Seller, Margo has all
requisite corporate power and authority to carry on the
businesses in which it is engaged and to own and use the
properties owned and used by it. The Seller has delivered to the
Buyer correct and complete copies of the Certificate of
Incorporation and Articles of Association of Margo, as amended
and as in effect on the date hereof. All of the issued and
outstanding Margo Shares and Neem Shares are duly authorized,
validly issued, fully paid and nonassessable. Except as
specified in Section 2.8 of the Disclosure Schedule, all shares
of each Foreign Company that are held of record or owned
beneficially by the Seller are held or owned free and clear of
any restrictions on transfer, claims, Security Interests,
options, warrants, rights of first refusal, rights, contracts,
calls, commitments, equities and demands. The transfer of the
Margo Shares and the Neem Shares to TEIH pursuant to this
Agreement will vest in TEIH full title to the Margo Shares and
the Neem Shares, free and clear of all liens, encumbrances,
claims, equities, options, calls, rights of first refusal, voting
trusts, agreements and commitments whatsoever. Except as set
forth in Section 2.8 of the Disclosure Schedule, (i) there are no
outstanding or authorized options, warrants, rights, agreements
or commitments to which the Seller or, to the knowledge of
Seller, Margo is a party or which are binding on any of them
providing for the issuance, disposition or acquisition of any
capital stock of Margo; (ii) to the knowledge of Seller, there
are no outstanding stock appreciation, phantom stock or similar
rights with respect to Margo; (iii) to the knowledge of Seller,
there are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of any capital stock of
Margo and; (iv) to the knowledge of Seller, Margo is not in
default under or in violation of any provision of its
Organizational Documents.
2.9 Contracts.
.9(a) Section 2.9 of the Disclosure Schedule lists
the following written contracts or agreements of the Seller which
relate to the Acquired Assets or the Business:
(i) any written contract or agreement
establishing a partnership or joint venture or to which Margo or
Neem Co. is a party other than purchase orders;
(ii) any written contract or agreement (or group
of related written contracts or agreements) which is reflected in
the Grace Biopesticides Expense Budget (which reflects 1995
(Grace/WRC), 1996 (Grace/WRC) and 1996 (Thermo/Offsite)) and
which is included in Section 2.9 of the Disclosure Schedule (the
PAGE
<PAGE>
"Budget") (A) under which the Seller has created, incurred,
assumed, or guaranteed (or may create, incur, assume, or
guarantee) indebtedness (including capitalized lease
obligations), or is obligated to make payments in the aggregate,
involving more than $50,000, (B) which has imposed (or may
impose) a Security Interest on any of the Acquired Assets,
tangible or intangible or (C) which involves more than $25,000
and has a noncancellable remaining term in excess of one year;
(iii) any written contract or agreement concerning
noncompetition (other than noncompetition agreements contained in
a license agreement described in Section 2.9(a)(iv)) or, to the
knowledge of Seller, concerning confidentiality (relating to any
intellectual property used in the manufacturing operations of the
Business as it is currently conducted or used currently in
connection with products under late stage active development)
other than written contracts or agreements which have been
superseded by a license agreement described in
Section 2.9(a)(iv);
(iv) any written contract or agreement which
includes the grant to or by the Seller of a license or the
payment to or by the Seller of a royalty payment;
(v) any written contract or agreement relating to
the toll manufacturing of product for the Seller;
(vi) any distribution agreement providing for
distribution of product outside the United States;
(vii) any written contract or agreement to which
Margo Biocontrols PVT, Ltd., Polyagri Limited, HPI Products, Inc.
or Mitchfield Company is a party; and
(viii) any other written contract or agreement (or
group of related written arrangements) not reflected in the
Budget either involving more than $10,000 or having a
noncancellable remaining term in excess of six months.
.9(b) The Seller has delivered or made available to
the Buyer a correct and complete copy of each written contract or
agreement (as amended to date) listed in Section 2.9 of the
Disclosure Schedule. With respect to each written arrangement so
listed, to the Seller's knowledge, no party is in breach or
default, and no event has occurred which with notice or lapse of
time would constitute a breach or default or permit termination,
modification, or acceleration, under the written agreement or
contract, nor is there any material dispute between the parties
thereto. Neither the Seller nor, to the knowledge of the Seller,
any Foreign Company is a party to any oral contract, agreement or
other arrangement which, if reduced to written form, would be
required to be listed in Section 2.9 of the Disclosure
Schedule under the terms of this Section 2.9.
2.10 Litigation. Section 2.10 of the Disclosure
Schedule identifies, and contains a brief description of, (a) any
unsatisfied judgement, order, decree, stipulation or injunction
relating to the Acquired Assets, the Business or, to the
PAGE
<PAGE>
knowledge of Seller, Margo and (b) any claim, action, suit or
proceeding involving the Business or affecting the Acquired
Assets, the Business or, to the knowledge of Seller, Margo which
is currently pending or, to the knowledge of the Seller,
threatened and (c) to the knowledge of Seller, any hearing or
investigation involving the Business or affecting the Acquired
Assets, the Business or Margo which is currently pending or
threatened.
2.11 Product Warranty. The aggregate expenses incurred by
the Seller in fulfilling its obligations under its guaranty,
warranty, right of return (due to product defects) and indemnity
provisions in connection with the Business during the most recent
fiscal year did not exceed $50,000.
2.12 Environmental Matters.
.12(a) Except as set forth in Section 2.12(a) of the
Disclosure Schedule, to the best knowledge of the Seller, the
Seller has complied with all Environmental Laws (as defined
below) applicable to the Acquired Assets or the Business, and
Margo has complied with all Environmental Laws applicable to its
business. For purposes of this Agreement, "Environmental Law"
means any federal, state, regional, county, local or foreign law,
statute, rule or regulation or the common law relating to the
environment or occupational health and safety, including without
limitation any statute, regulation or order pertaining to
(i) treatment, storage, disposal, generation and transportation
of industrial, toxic or hazardous substances or solid or
hazardous waste; (ii) air, water and noise pollution;
(iii) groundwater and soil contamination; (iv) the release or
threatened release into the environment of industrial, toxic or
hazardous substances, or solid or hazardous waste, including
without limitation emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants, pesticides or
chemicals; (v) the protection of wild life, marine sanctuaries
and wetlands, including without limitation all endangered and
threatened species; (vi) storage tanks, vessels and containers;
(vii) underground and other storage tanks or vessels, abandoned,
disposed or discarded barrels, containers and other closed
receptacles; (viii) health and safety of employees and other
persons; and (ix) manufacture, processing, use, distribution,
treatment, storage, disposal, transportation or handling of
pollutants, contaminants, pesticides, chemicals or industrial,
toxic or hazardous substances or oil or petroleum products or
solid or hazardous waste. As used above, the terms "release" and
"environment" shall have the meaning set forth in the federal
Comprehensive Environmental Compensation, Liability and Response
Act of 1980 ("CERCLA").
.12(b) Except as set forth in Section 2.12(b) of the
Disclosure Schedule, neither the Seller, with respect to the
Business, nor, to the best knowledge of the Seller, Margo has any
obligation to remediate, clean up or dispose of any Materials of
Environmental Concern. For purposes of this Agreement,
"Materials of Environmental Concern" means any chemicals,
pollutants or contaminants, hazardous substances (as such term is
defined under CERCLA), solid wastes and hazardous wastes (as such
PAGE
<PAGE>
terms are defined under the federal Resources Conservation and
Recovery Act), pesticides, toxic materials, oil or petroleum and
petroleum products or any other material subject to regulation
under any Environmental Law.
2.13 Legal Compliance. To the knowledge of the Seller, the
Seller is conducting and has conducted the business and
operations of the Business and Margo is conducting and has
conducted the operations of its business, in compliance in all
material respects with all applicable federal, state, local and
foreign laws, regulations and orders. Except as set forth on
Section 2.13 of the Disclosure Schedule, the Seller has not since
January 1, 1992 received any written notice or communication from
any Governmental Entity regarding any violation or alleged
violation of such laws, regulations or orders.
2.14 Permits and Registrations. Section 2.14 of the
Disclosure Schedule sets forth a list of all Permits and the
status thereof (including without limitation Pesticide
Registrations and those issued or required under Environmental
Laws but excluding Permits held by the Seller for its Columbia,
Maryland site) issued to or held by the Seller relating to the
Acquired Assets or the Business. Other than Permits which TTC
will have the right to use pursuant to the Lease, such listed
Permits are the only Permits that are required to be held or
obtained by the Seller to conduct the Business as presently
conducted. Each such Permit is in full force and effect and, to
the knowledge of the Seller, no suspension or cancellation of
such Permit is threatened. To the knowledge of the Seller, the
transfer of the Margo Shares to TEIH will not cause any Permit
issued to or held by Margo to be rescinded, revoked or declared
invalid. Except as set forth in Section 2.14 of the Disclosure
Schedule, each such Permit issued to or held by the Seller is
assignable (subject to post-Closing notification) by the Seller
to TTC without the consent or approval of any party and will
continue in full force and effect following the Closing.
2.15 Brokers' Fees. Neither the Seller nor any Foreign
Company has any liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
2.16 Books and Records. The books, records, accounts,
ledgers and files of the Seller relating to the Business made
available to the Buyer are the actual and complete books,
records, accounts, ledgers and files of the Seller.
2.17 Customers and Suppliers. Margo is the only supplier of
any raw materials used in connection with the Business which is a
party to a contract with the Seller with a remaining
noncancellable term in excess of one year. Section 2.17 of the
Disclosure Schedule sets forth a list of each customer that
accounted for more than 5% of the revenues of the Business during
the last full fiscal year and the amount of revenues accounted
for by such customer during such period. Since January 1, 1995,
Seller has received no written notice from any such customer that
it will stop, or decrease the rate of, buying materials, products
or components produced by, or services offered by, the Business.
PAGE
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
3.1 Organization. Each of TTC and TEIH is a corporation
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation.
3.2 Authorization of Transaction. Each of TTC and TEIH has
all requisite power and authority to execute and deliver this
Agreement and the Ancillary Agreements and to perform its
obligations hereunder and thereunder. The execution and delivery
of this Agreement and the Ancillary Agreements by TTC and TEIH
and the performance of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated
hereby and thereby by TTC and TEIH have been duly and validly
authorized by all necessary corporate action on the respective
parts of TTC and TEIH. This Agreement has been duly and validly
executed and delivered by TTC and TEIH and constitutes a valid
and binding obligation of TTC and TEIH, enforceable against them
in accordance with its terms.
3.3 Noncontravention. Other than as required to be
disclosed by the Seller on the Disclosure Schedule, neither the
execution and delivery of this Agreement or the Ancillary
Agreements by the Buyer, nor the consummation by the Buyer of the
transactions contemplated hereby or thereby, will, directly or
indirectly (with or without notice or lapse of time) (a) conflict
or violate any provision of the charter or By-laws of TTC or TEIH
or any resolution adopted by the board of directors or
stockholders of TTC or TEIH, (b) require on the part of TTC and
TEIH any filing with, or permit, authorization, consent or
approval of, any Governmental Entity (other than Indian or Thai
Governmental Entities) or give any Governmental Entity (other
than Indian or Thai Governmental Entities) the right to challenge
any of the transactions contemplated by this Agreement or the
Ancillary Agreements, (c) conflict with, result in breach of,
constitute a default under, result in the acceleration of, create
in any party any right to accelerate, terminate, modify or
cancel, or require any notice, consent or waiver under, any
contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest or other
arrangement to which the Buyer is a party or by which it is bound
or to which any of its assets is subject, or (d) violate any
order, writ, injunction, decree, statute, rule or regulation
applicable to the Buyer or any of its properties or assets.
3.4 Brokers' Fees. The Buyer has no liability or
obligation to pay any fees or commissions to any broker, finder
or agent with respect to the transactions contemplated by this
Agreement.
3.5 Status as Subsidiaries. Each of TTC and TEIH is a
PAGE
<PAGE>
wholly-owned subsidiary of Thermo Ecotek Corporation.
3.6 Financial Projections. As part of its investigation of
the business, Buyer has been given certain financial projections
regarding the Business. Buyer has taken responsibility for
evaluating these financial projections. There are uncertainties
inherent in attempting to make projections, and Buyer is familiar
with such uncertainties. Buyer is not relying on such financial
projections, and Seller shall have no liability of any kind to
Buyer in respect of such financial projections; provided,
however, that no representation is made hereunder by Buyer with
respect to reliance on historical information.
ARTICLE IV
PRE-CLOSING COVENANTS
4.1 Reasonable Efforts. Each Party shall use all
reasonable efforts to take all actions and to do all things
necessary, proper or advisable to consummate the transactions
contemplated by this Agreement.
4.2 Notices and Consents. The Parties shall cooperate and
shall use all reasonable efforts to obtain all such waivers,
permits, consents, approvals or other authorizations from third
parties and Governmental Entities, and to effect all such
registrations, filings and notices with or to third parties and
Governmental Entities, as may be necessary or desirable in
connection with the transactions contemplated by this Agreement
and the Ancillary Agreements (the "Consents") (including without
limitation those listed in Sections 2.3, 2.8 and 2.14 of the
Disclosure Schedule). The Buyer shall make all filings,
applications, requests for approval and notices which are
required of a buyer or transferee in obtaining or effecting the
Consents. The Seller shall make all filings, applications,
requests for approval and notices which are required of a seller
or transferor in obtaining or effecting the Consents. Each Party
shall provide such information regarding itself and its business
which the other Party may reasonably request for purposes of
obtaining or effecting the Consents.
4.3 Operation of Business. Except as contemplated by this
Agreement, during the period from the date of this Agreement to
the Closing, the Seller shall conduct the operations of the
Business, and shall take no actions to cause Margo not to conduct
the operations of its business, in the ordinary course of
business and in accordance with past practice and custom.
Without limiting the generality of the foregoing, prior to the
Closing, except for the proposed loan of Rs. 325 lakhs to be
obtained by Margo from the International Development Bank of
India and the expenditure of funds materially in accordance with,
and transactions contemplated by, the related budget
(collectively, "the Permitted Actions") the Seller shall not, and
shall take no actions to cause Margo to, without the written
consent of the Buyer:
.3(a) acquire, sell, lease, encumber or dispose of
PAGE
<PAGE>
any assets relating to the Business or Margo's business, other
than purchases and sales of assets in the ordinary course of
business;
.3(b) create, incur or assume any debt not
currently outstanding (including obligations in respect of
capital leases) in connection with the Business or Margo's
business;
.3(c) mortgage or pledge any of the property or
assets of the Business or Margo's business or subject any such
assets to any Security Interest;
.3(d) sell, assign, transfer, license or sublicense
any Intellectual Property used in the Business or Margo's
business, other than in the ordinary course of business;
.3(e) enter into, amend, terminate, or knowingly
take or omit to take any action that would constitute a violation
of or default under, or waive any rights under, any contract or
agreement of a type that would be required to be disclosed in
Section 2.9 of the Disclosure Schedule;
.3(f) enter into any written contract or agreement
(excluding purchase orders for Neem Oil) which creates a
liability on the Seller's or Margo's part in excess of $25,000;
.3(g) make or commit to make any capital
expenditure in excess of $50,000 per item, or total capital
expenditures in excess of $200,000 in the aggregate, in
connection with the Business or Margo's business;
.3(h) intentionally take any action or fail to take
any action permitted by this Agreement with the knowledge that
such action or failure to take action would result in (i) any of
the representations and warranties of the Seller set forth in
this Agreement becoming untrue or (ii) any of the conditions to
the Closing set forth in Article V not being satisfied;
.3(i) fail to take any action reasonably necessary
to preserve the validity of any Intellectual Property or Permit,
including the timely payment of all required maintenance fees; or
.3(j) agree in writing or otherwise to take any of
the foregoing actions.
4.4 Full Access. The Seller shall permit representatives
of the Buyer to have full access (at all reasonable times, and in
a manner so as not to interfere with the normal business
operations of the Seller) to all premises, properties, financial
and accounting records, contracts, other records and documents,
and personnel, of or pertaining to the Business or, to the extent
Seller has access thereto, the Foreign Companies. The Seller
shall keep TTC notified of all material developments in, shall
provide copies of all filings made with respect to, and shall
cooperate with TTC in connection with, the patent defenses
described in Section 6.10 hereof.
PAGE
<PAGE>
4.5 Exclusivity. The Seller shall not, and the Seller
shall cause its Affiliates and each of its officers, directors,
employees, representatives and agents not to, directly or
indirectly, (a) encourage, solicit, initiate, engage or
participate in discussions or negotiations with any person or
entity (other than the Buyer) concerning any merger,
consolidation, sale of material assets or other business
combination involving the Business or (b) provide any non-public
information concerning the business, properties or assets of the
Business to any person or entity (other than the Buyer) except in
the ordinary course of business so long as the recipient (which
recipient may in no event include any person or entity which has
indicated a desire to engage in any merger, consolidation, sale
of material assets or other business combination involving the
Business) of such information agrees to treat the information
confidentially. "Affiliate" shall mean, with respect to the
Buyer or Seller, the Buyer's or Seller's parent company, and such
parent company's direct or indirect majority-owned subsidiaries.
ARTICLE V
CONDITIONS TO CLOSING
5.1 Conditions to Obligations of the Buyer. The obligation
of the Buyer to consummate the transactions to be performed by it
in connection with the Closing is subject to the satisfaction, or
waiver by the Buyer, of the following conditions:
.1(a) the Parties shall have (i) obtained all of
the waivers, permits, consents, approvals or other authorizations
from any Governmental Entity and from any third party with
respect to any written agreement or contract listed in
Section 2.9 of the Disclosure Schedule and effected all of the
registrations, filings and notices (other than notices regarding
Pesticide Registrations which are required to be filed only after
the Closing), that the Buyer deems necessary or desirable to
effect the transactions contemplated by this Agreement and (ii)
obtained all other waivers, consents, approvals or other
authorizations that the Buyer deems necessary or desirable except
in the case of this clause (ii) for any which if not obtained
would not have a material adverse effect on the right of the
Buyer to own, operate or control the Acquired Assets or conduct
the Business following the Closing or on the ability of the
Parties to consummate the transactions contemplated by this
Agreement.
.1(b) the representations and warranties of the
Seller set forth in Sections 2.1, 2.2 and 2.3(a) shall be true in
all respects and the representations and warranties of the Seller
set forth in the other sections of Article II shall be true and
correct in all material respects (other than those
representations and warranties which by their terms are qualified
as to materiality, which representations and warranties shall be
true and correct in accordance with their terms without any
additional qualification as to materiality pursuant to this
Section 5.1(b)) as of the Closing as if made as of the Closing,
except for representations and warranties made as of a specific
PAGE
<PAGE>
date, which shall be true and correct as of such specific date;
.1(c) the Seller shall have performed or complied
with in all material respects its agreements and covenants
required to be performed or complied with under this Agreement as
of or prior to the Closing;
.1(d) no action, suit or proceeding shall be
pending before any Governmental Entity wherein an unfavorable
judgment, order, decree, stipulation or injunction would
(i) prevent consummation of any of the transactions contemplated
by this Agreement, (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following
consummation or (iii) affect adversely the right of the Buyer to
own, operate or control any of the Acquired Assets or to conduct
the Business as currently conducted and as presently proposed to
be conducted following the Closing, and no such judgment, order,
decree, stipulation or injunction shall be in effect;
.1(e) the Seller shall have delivered to the Buyer
a certificate (without qualification as to knowledge or
materiality to or otherwise) to the effect that each of the
conditions specified in clauses (b) through (d) of this
Section 5.1 is satisfied in all respects;
.1(f) the Buyer shall have received the
resignations of Martin B. Sherwin, K. R. Narasimhan and Ajit
Vaswani, effective as of the Closing, as directors of Margo and
the Organizational Documents of Margo shall have been amended to
reflect the transfer of the Margo Shares;
.1(g) the Seller shall have delivered to the Buyer
a certificate of its Secretary attesting that attached to it are
true and correct copies of (i) Seller's charter, (ii) Seller's
by-laws and (iii) evidence reasonably satisfactory to Buyer of
Seller's authorization to enter into this Agreement; and
.1(h) the Seller shall have delivered to the Buyer
a certificate of good standing from its jurisdiction of
incorporation.
5.2 Conditions to Obligations of the Seller. The
obligation of the Seller to consummate the transactions to be
performed by it in connection with the Closing is subject to the
satisfaction, or waiver by the Seller, of the following
conditions:
.2(a) the representations and warranties of the
Buyer set forth in Sections 3.1, 3.2, 3.3(a) and 3.5 shall be
true in all respects, and the representations and warranties of
the Buyer set forth in the other sections of Article III shall be
true and correct in all material respects (other than those
representations and warranties which by their terms are qualified
as to materiality, which representations and warranties shall be
true and correct in accordance with their terms without any
additional qualification as to materiality pursuant to this
Section 5.2(a)) as of the Closing as if made as of the Closing,
except for representations and warranties made as of a specific
PAGE
<PAGE>
date, which shall be true and correct as of such date;
.2(b) the Buyer shall have performed or complied in
all material respects with its agreements and covenants required
to be performed or complied with under this Agreement as of or
prior to the Closing;
.2(c) the Buyer shall have delivered to the Seller
a certificate (without qualification as to knowledge or
materiality or otherwise) to the effect that each of the
conditions specified in clauses (a) and (b) of this Section 5.2
is satisfied in all respects;
.2(d) the Parties shall have (i) obtained all of
the waivers, permits, consents, approvals or other authorizations
referred to in Section 4.2, and (ii) obtained all other waivers,
permits, consents, approvals or other authorizations and effected
all other registrations, filings and notices necessary or
desirable in connection with the transactions contemplated by
this Agreement, except for any waivers, permits, consents,
approvals or authorizations in whose absence the Closing could be
consummated without materially adversely affecting the Seller;
.2(e) the Buyer shall have delivered to the Seller
a certificate of the respective Secretaries of each of TTC and
TEIH, attesting that attached to it are true and correct copies
of (i) such corporation's charter, (ii) such corporation's
by-laws and (iii) evidence reasonably satisfactory to Seller of
such corporation's authority to enter into this Agreement; and
.2(f) the Buyer shall have delivered to the Seller
for each of TTC and TEIH a certificate of good standing, to the
extent such certificate is available for TEIH, from its
jurisdiction of incorporation.
5.3 Waiver of Intervening Events
If the condition set forth in Section 5.1(b) has not
been satisfied as a result of the occurrence of an Intervening
Event (as defined in Section 8.2(a)) and the Buyer desires (but
shall have no obligation to) to close the transactions
contemplated by this Agreement despite the occurrence of the
Intervening Event, the Buyer shall waive in writing the failure
of the condition to be satisfied as a result of the Intervening
Event. If the Buyer so waives the condition and the Closing
occurs, notwithstanding Section 7.1, Seller shall have no
liability to Buyer arising out of the occurrence of the
Intervening Event; provided, however, that any Damages (as
defined in Section 7.1) incurred by the Buyer as a result of such
Intervening Event shall be included for the purposes of
calculating the total of all Damages pursuant to Section 7.7
hereof.
ARTICLE VI
POST-CLOSING COVENANTS
6.1 Proprietary Information.
PAGE
<PAGE>
(a) Buyer and Seller acknowledge that, after the
Closing, each of them may have access to Confidential Information
of the other as a result of the arrangements set forth hereunder
and in the Ancillary Agreements. Throughout the term of such
agreements, and for a period of ten years thereafter, the Parties
shall hold in confidence such Confidential Information and shall
not use or disclose any of it except as may be required by law in
the reasonable judgment of such Party's counsel (in which event
the Party so required to disclose such Confidential Information
shall provide the other Party with prompt notice so that such
other Party may seek a protective order or other appropriate
remedy, and the Party so required to disclose such Confidential
Information shall not oppose any action by the other Party to
obtain such order or remedy). For purposes of this subsection,
the term "Confidential Information" shall mean information about
a Party or its business, which information is obtained by the
other Party while carrying out the activities under, or in
connection with, this Agreement or the Ancillary Agreements.
(b) Buyer and Seller acknowledge that each of them may
have in their possession, as a result of their prior
relationships and the transactions contemplated by this
Agreement, Confidential Information concerning proprietary
technology which is exclusively owned by the other Party. For a
period of ten years from the Closing Date, the Parties agree to
hold such Confidential Information in confidence and not to use
or disclose any of it to third parties except as may be required
by law in the reasonable judgment of such Party's counsel (in
which event the Party so required to disclose such Confidential
Information shall provide the other Party with prompt notice so
that such other Party may seek a protective order or other
appropriate remedy, and the Party so required to disclose such
Confidential Information shall not oppose any action by the other
Party to obtain such order or remedy). For purposes of this
subsection, the term "Confidential Information" shall mean all
proprietary information, including but not limited to all trade
secrets, know-how, inventions, formulae, data, specifications,
techniques, procedures, samples, equipment, processes, computer
programs, test results and evaluations, which relates to a
Party's business and is owned exclusively by a Party without any
right or license having been granted to the other Party.
(c) For purposes of subsections (a) and (b) of this
Section, Confidential Information shall not include information
which (i) is available to the public, or (ii) becomes available
to the public through no act or omission of the obtaining Party,
or (iii) becomes available to the obtaining Party from a third
party that is not known by the obtaining Party to be under any
obligation of confidentiality with respect thereto. Each Party
hereto shall inform its directors, officers, employees and
representatives (collectively, its "Representatives") who may
obtain Confidential Information of the existence of the
obligations set forth in this Section and each Party shall be
responsible for its Representatives' compliance with such
obligations.
6.2 Solicitation and Hiring. For a period of two years
PAGE
<PAGE>
after the Closing Date, the Seller shall not, and shall cause its
Affiliates (and any of its or their respective directors,
officers or employees) not to, either directly or indirectly, (a)
solicit or attempt to induce any Employee (as defined below) to
terminate his employment with the Buyer or (b) hire or attempt to
hire any Employee other than a nonsalaried Employee whose
employment has been terminated by the Buyer. For purposes of
this Agreement, "Employee" shall mean any person who either
(i) was an employee of the Buyer on either the date of this
Agreement or the Closing Date or (ii) was employed by the Seller
in connection with the Business on either the date of this
Agreement or the Closing Date and received an employment offer
from the Buyer on or prior to the Closing Date.
6.3 Non-Competition; Referral of Customers.
.3(a) For a period of five years after the Closing
Date, the Seller shall not, and shall cause its Affiliates not
to, either directly or indirectly, (i) develop, manufacture,
market, sell, perform or offer any material, product, component
or service which is competitive with any material, product,
component or service developed (or under development),
manufactured, marketed, sold or offered by the Seller in
connection with the Business on or prior to the Closing Date or
(ii) engage in any business competitive with the Business as
conducted on the date of this Agreement or as of the Closing
Date, in the United States or any other country.
.3(b) The Seller, for itself or on behalf of its
Affiliates, agrees that the duration and geographic scope of the
noncompetition provision set forth in this Section 6.3 are
reasonable. In the event that any court determines that the
duration or the geographic scope, or both, are unreasonable and
that such provision is to that extent unenforceable, the Parties
agree that the provision shall remain in full force and effect
for the greatest time period and in the greatest area that would
not render it unenforceable. The Parties intend that this
noncompetition provision shall be deemed to be a series of
separate covenants, one for each and every county of each and
every state of the United States of America and each and every
political subdivision of each and every country outside the
United States of America where this provision is intended to be
effective.
.3(c) The Seller shall, and shall cause its
Affiliates to, refer all inquiries regarding the Business and its
products and services to the Buyer.
6.4 Sharing of Data.
.4(a) The Seller shall have the right for a period
of three years following the Closing Date to have reasonable
access to such books, records and accounts, including financial
and tax information, correspondence, production records,
employment records and other records that are transferred to the
Buyer pursuant to the terms of this Agreement for the limited
purposes of concluding its involvement in the Business as
conducted by the Seller prior to the Closing Date and for
PAGE
<PAGE>
complying with its obligations under applicable securities, tax,
environmental, employment or other laws and regulations. The
Buyer shall have the right for a period of three years following
the Closing Date to have reasonable access to those books,
records and accounts, including financial and tax information,
correspondence, production records, employment records and other
records that are retained by the Seller pursuant to the terms of
this Agreement to the extent that any of the foregoing is needed
by the Buyer in order to comply with its obligations under
applicable securities, tax, environmental, employment or other
laws and regulations. Each Party shall preserve such books,
records and accounts during such three-year period, and following
the expiration of such three-year period, neither the Buyer nor
the Seller shall destroy any such books, records or accounts
retained by it without first providing the other Party with the
opportunity to obtain or copy such books, records or accounts.
.4(b) In addition to all files and documents
required to be provided pursuant to this Agreement or the
Ancillary Agreements, promptly upon request by the Buyer made at
any time following the Closing Date, the Seller shall authorize
the release to the Buyer of all files pertaining primarily to the
Acquired Assets or the business or operations of the Business
held by any federal, state, county or local authorities, agencies
or instrumentalities.
6.5 Use of Labels. After the Closing, the Buyer shall not
have the right to use the "Grace" name, except that the Seller
hereby authorizes TTC to use the labels which constitute Acquired
Assets and which contain the name "W. R. Grace & Co." or "Grace"
and to affix such labels to products manufactured and sold as
part of the Business for a period of one year from the Closing
Date. TTC shall use reasonable efforts to exhaust the supply of
such labels within six months following the Closing Date.
6.6 Cooperation in Litigation. From and after the Closing
Date, each Party shall fully cooperate with the other in the
defense or prosecution of any litigation or proceeding already
instituted or which may be instituted hereafter against or by
such other Party relating to or arising out of the conduct of the
Business prior to or after the Closing Date (other than
litigation arising out of the transactions contemplated by this
Agreement or the Ancillary Agreements). The Party requesting
such cooperation shall pay the reasonable out-of-pocket expenses
incurred in providing such cooperation (including legal fees and
disbursements) by the Party providing such cooperation and by its
officers, directors, employees and agents, but shall not be
responsible for reimbursing such Party or its officers,
directors, employees and agents, for their time spent in such
cooperation.
6.7 Collection of Accounts Receivable and Contracts in
Progress. The Seller agrees that it shall forward promptly to
the Buyer any monies, checks or instruments received by the
Seller after the Closing Date with respect to the Accounts
Receivable and the Contracts in Progress, except as otherwise
provided in Section 1.6.
PAGE
<PAGE>
6.8 Employees.
.8(a) Effective as of the Closing, the Seller shall
terminate the employment of each of its employees designated on
Schedule 6.8 attached hereto and TTC shall offer employment to
each such employee, terminable at the will of TTC or as otherwise
agreed to between the Buyer and such employee. Any such employee
shall (i) receive credit for his years of service with the Seller
with respect to eligibility and vesting under any employee
benefit plan of TTC, and (ii) shall be eligible for TTC's health
insurance benefits without regard to any pre-existing condition.
TTC shall provide any such employee with notice of such credit
and benefits and of the severance benefits described below. TTC
shall have complete discretion to change any of the terms or
conditions of employment, compensation or benefits relating to
any such employee at any time. TTC agrees that any such employee
whose employment with TTC is terminated by TTC (other than for
cause, as determined by TTC in its sole discretion) prior to
November 1, 1996 shall receive from TTC severance benefits equal
to those the employee would have received from the Seller on the
Closing Date, which severance benefits are set forth on Schedule
6.8 attached hereto. The Seller hereby consents to the hiring of
such employees by TTC and waives, with respect to the employment
by TTC of such employees, any claims or rights the Seller may
have against TTC or, to the extent such agreements relate to the
Business, any such employee under any noncompetition,
confidentiality or employment agreement.
TTC agrees that it will make an independent determination of
its decision to offer employment to any such employee and will
independently determine the terms of such employment, without any
representations from the Seller.
.8(b) The Seller agrees that Dr. Martin B. Sherwin
may, at TEIH's request, serve as a director of Margo and may, at
TTC's request, serve as a director of TTC, so long as the
requesting party, in each case, may desire.
6.9 Detachment of Machinery and Equipment. Following the
Closing, upon not less than 60 days' prior written notice by the
Buyer, Seller shall cause, at its own cost and expense, the
detachment from the Leased Premises of the machinery and
equipment described in Schedule 6.9. Following such detachment,
the machinery and equipment shall be in a condition as good as
that immediately prior to detachment. The machinery and
equipment shall be made available at the Leased Premises for
transport by TTC at TTC's cost and expense.
6.10 Defense of Patents. Following the Closing, TTC shall
assume the defense of the proceedings involving United States
Patent Number 5,124,349 (the "United States Defense") and
European Patent Number 0 436 257 (90250319.2) (the "European
Defense"). The costs and expenses of the United States Defense
shall be borne equally by TTC and the Seller following the
Closing Date until $150,000 shall have been expended or 18 months
shall have elapsed from the Closing Date. The costs and expenses
of the European Defense shall be borne equally by TTC and the
Seller until $100,000 shall have been expended or 18 months shall
PAGE
<PAGE>
have elapsed from the Closing Date. The Seller shall pay its
share of such expenses promptly on demand. All expenses in
excess of such amounts shall be the sole responsibility of TTC.
6.11 Intercompany Agreements. All contracts, licenses,
agreements, commitments or other arrangements between other units
of the Seller or its Affiliates and the business unit which
conducts the Business, whether written or oral, and whether
express or implied, pursuant to which the other unit of the
Seller or its Affiliates provides management, administrative,
legal, financial, accounting, data processing, insurance, human
resources, technical support or other services to the Business,
or the use of any assets of the other unit of the Seller or its
Affiliates other than the Acquired Assets, or pursuant to which
rights, privileges or benefits are accorded to the Business as a
unit of Seller, shall terminate as of the Closing. After the
Closing, Buyer shall have no rights or obligations under any
similar contract, license, agreement, commitment or arrangement
with Seller or its Affiliates except rights under the Ancillary
Agreements.
6.12 Margo Consents. To the extent that any approval,
consent, authorization or permit which is required to be obtained
from a Governmental Entity by TEIH in its capacity as a
transferee of the Margo Shares is not obtained and the
requirement to obtain such approval, consent, authorization, or
permit becomes known to TEIH following the Closing Date, the
Seller, commencing on the date TEIH gives the Seller notice of
such requirement and continuing until such approval, consent,
authorization or permit is obtained, shall use reasonable efforts
to (i) provide to TEIH the benefits of the ownership of the Margo
Shares, (ii) cooperate with TEIH to reach a reasonable and lawful
arrangement designed to provide such benefits to TEIH during such
period and (iii) enforce and exercise at the request of TEIH, or
allow TEIH to enforce and exercise (and, solely for such purpose,
the Seller hereby constitutes and appoints TEIH as its true and
lawful attorney-in-fact) any rights of the Seller as owner of the
Margo Shares; provided, however, that the reasonable costs and
expenses of the Seller (including reasonable professional fees
and expenses) incurred at TEIH's request with respect to any of
the actions contemplated above shall be promptly paid or
reimbursed by TEIH to the Seller.
6.13 Maintenance of Pesticide Registrations. To the extent
that any assignment of a Pesticide Registration requires the
filing of a notice following the Closing in order to become
effective, the Seller and Buyer, commencing on the Closing Date
and continuing until such transfer is effective, shall cooperate
to maintain (including applying for any extensions) such
Pesticide Registration in full force and effect and the Seller
shall make such Pesticide Registration available for use by TTC.
TTC shall promptly pay or reimburse to the Seller the reasonable
costs and expenses (including filing or maintenance fees)
incurred in performing its obligations under this Section 6.13.
ARTICLE VII
INDEMNIFICATION
PAGE
<PAGE>
7.1 Indemnification by Seller. The Seller shall indemnify
the Buyer in respect of, and hold the Buyer harmless against, any
and all debts, obligations and other liabilities (whether
absolute, accrued, contingent, fixed or otherwise, or whether
known or unknown, or due or to become due or otherwise), monetary
damages, fines, fees, penalties, interest obligations,
deficiencies, losses and expenses (including without limitation
amounts paid in settlement, court costs, costs of investigators,
fees and expenses of attorneys, accountants, financial advisors
and other experts, and other expenses of litigation) ("Damages")
incurred or suffered by the Buyer or any Affiliate thereof
resulting from, relating to, constituting (with respect to
Retained Liabilities) or arising out of:
.1(a) any misrepresentation or breach of warranty
by Seller contained in this Agreement;
.1(b) any failure to perform any covenant or
agreement of the Seller contained in this Agreement or the
Ancillary Agreements;
.1(c) any Retained Liabilities; or
.1(d) any payments required to be made by the Buyer
in respect of the liabilities assumed pursuant to
Sections 1.2(a)(iii), 1.2(a)(iv), 1.2(a)(vi) and 1.2(a)(vii) in
excess of the amounts specified in Section 1.2(c).
7.2 Indemnification by Buyer. The Buyer shall indemnify
the Seller in respect of, and hold the Seller harmless against,
any and all debts, obligations and other liabilities (whether
absolute, accrued, contingent, fixed or otherwise, or whether
known or unknown, or due or to become due or otherwise), monetary
damages, fines, fees, penalties, interest obligations,
deficiencies, losses and expenses (including without limitation
amounts paid in settlement, court costs, costs of investigators,
fees and expenses of attorneys, accountants, financial advisors
and other experts, and other expenses of litigation) ("Damages")
incurred or suffered by the Seller or any Affiliate thereof
resulting from, relating to or arising out of:
.2(a) any misrepresentation or breach of warranty
by Buyer contained in this Agreement or the Ancillary Agreements;
and
.2(b) any failure to perform any covenant or
agreement of the Buyer contained in this Agreement or the
Ancillary Agreements.
7.3 Claims for Indemnification. Whenever any claim shall
arise for indemnification hereunder, the Party seeking
indemnification (the "Indemnified Party") shall promptly notify
the Party from whom indemnification is sought (the "Indemnifying
Party") of the claim and, when known, the facts constituting the
basis for such claim; provided, however, that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party
shall relieve the Indemnifying Party from any liability or
PAGE
<PAGE>
obligation hereunder except to the extent of any damage or
liability caused by or arising out of such failure. In the event
of any such claim for indemnification hereunder resulting from or
in connection with any claim or legal proceedings by a third
party, the notice to the Indemnifying Party shall specify, if
known, the amount or an estimate of the amount of the liability
arising therefrom. The Indemnified Party shall not settle or
compromise any claim by a third party for which it is seeking
indemnification hereunder without the prior written consent of
the Indemnifying Party, unless the Indemnifying Party shall not
have taken control of the defense of such claim as provided in
Section 7.4 of this Agreement, after notification thereof
pursuant to this Section 7.3, in which case the Indemnified Party
may settle or compromise such claim without the Indemnifying
Party's consent.
7.4 Defense by the Indemnifying Party. In connection with
any claim for indemnification hereunder (other than a claim
pursuant to Section 7.1(d) to the extent such claim and all prior
claims pursuant to Section 7.1(d) aggregate less than $200,000)
resulting from or arising out of any claim or legal proceeding by
a third party, the Indemnifying Party at its sole cost and
expense may, upon written notice to the Indemnified Party given
at any time after the date of the notice of the claim from the
Indemnified Party pursuant to Section 7.2, assume the defense of
such claim or legal proceeding with counsel approved by the
Indemnified Party, which approval shall not be unreasonably
withheld, if (i) the Indemnifying Party acknowledges to the
Indemnified Party in writing the Indemnifying Party's obligations
to indemnify the Indemnified Party with respect to all elements
of such claim, (ii) the third party seeks monetary damages only
and (iii) an adverse resolution of the third party's claim would
not have a material adverse effect on the goodwill or the
reputation of the Indemnified Party or the Business or the future
conduct of the business of the Indemnified Party or the Business.
If the Indemnifying Party so assumes such defense, the
Indemnified Party shall be entitled to participate in (but not
control) such defense, with its counsel and at its own expense
(except that the Indemnifying Party will be responsible for the
reasonable fees and expenses of the separate co-counsel to the
extent the Indemnified Party reasonably concludes that the
counsel the Indemnifying Party has selected has a conflict of
interest). In addition, if the Indemnifying Party so assumes
such defense, it shall take all steps necessary in the defense or
settlement thereof; provided, however, that the Indemnifying
Party shall not consent to any settlement or to the entry of any
judgment with respect to a claim or legal proceeding which does
not include a complete release of the Indemnified Party from all
liability with respect thereto or which imposes any liability on
the Indemnified Party without the written consent of the
Indemnified Party. If the Indemnifying Party does not (or is not
permitted under the terms hereof to) assume the defense of any
such claim or legal proceeding, (a) the Indemnified Party may
defend against such claim or legal proceeding (with the
Indemnifying Party responsible for the reasonable fees and
expenses of counsel for the Indemnified Party if the Indemnifying
Party is obligated to indemnify with respect to the claim or
legal proceeding) in such manner as it may deem appropriate,
PAGE
<PAGE>
including, but not limited to, settling such claim or legal
proceeding on such terms as the Indemnified Party may deem
appropriate, and (b) the Indemnifying Party shall be entitled to
participate in (but not control) the defense of such action, with
its counsel and at its own expense.
7.5 Payment of Indemnification Obligation. All
indemnification by the Indemnifying Party hereunder shall be
effected by wire transfer of immediately available funds in the
amount of the indemnification liability.
7.6. Survival. All representations, warranties, covenants,
and obligations in this Agreement and any certificate delivered
pursuant to this Agreement will survive the Closing. If the
Closing occurs, an Indemnifying Party will have no liability for
indemnification with respect to Section 7.1(d) or with respect to
any representation or warranty in Article II or Article III,
other than those in Sections 2.1, 2.2, 2.3, 2.8, 3.1, 3.2, 3.3
and 3.5, unless on or before the date which is 18 months
following the Closing Date the Indemnifying Party is given notice
of claim pursuant to Section 7.3 hereof. However, the preceding
sentence of this Section 7.6 will not apply to any claim based
upon intentional misrepresentation or fraud. A claim with
respect to Sections 2.1, 2.2, 2.3, 2.8, 3.1, 3.2, 3.3 or 3.5, or
a claim for indemnification or reimbursements not based upon any
breach of a representation or warranty or not made pursuant to
Section 7.1(d) may be made at any time.
7.7 Limitations on Amount. An Indemnifying Party will have
no liability for indemnification pursuant to Section 7.1(a) or
7.2(a), as the case may be, until the total of all Damages with
respect to Section 7.1(a) or 7.1(b), as the case may be, exceeds
$150,000 and then only for the amount by which such Damages
exceed $150,000 and are less than $7,000,000. However, the
preceding sentence of this Section 7.7 will not apply to any
claim based upon intentional misrepresentation or fraud and will
not apply to any breach of the representations and warranties set
forth in Sections 2.1, 2.2, 2.3, 2.8, 3.1, 3.2, 3.3 or 3.5. In
calculating the total of Damages for purposes of this
Section 7.7, amounts expended on a single liability, claim,
action, suit, investigation, arbitration, proceeding or similar
matter which aggregate less than $5,000 shall not be considered;
provided, however, that amounts expended on matters that arise
from the same violation or alleged violation, events, facts or
circumstances shall be aggregated for purposes of this
calculation.
7.8 No Consequential or Lost Profit Damages. No Party to
this Agreement shall seek or be entitled to incidental, indirect
or consequential damages or damages for lost profits from the
operation of the Business in any claim relating to or arising
under this Agreement.
ARTICLE VIII
TERMINATION
PAGE
<PAGE>
8.1 Termination of Agreement. The Parties may terminate
this Agreement prior to the Closing as provided below:
.1(a) the Parties may terminate this Agreement by
mutual written consent;
.1(b) the Buyer may terminate this Agreement by
giving written notice to the Seller in the event the Seller is in
breach, and the Seller may terminate this Agreement by giving
written notice to the Buyer in the event the Buyer is in breach,
of any material representation, warranty, or covenant contained
in this Agreement, which breach is not cured within 15 days of
the receipt by the breaching Party of notice delivered in
accordance with the provisions of Section 10.7 of this Agreement;
or
.1(c) the Buyer may terminate this Agreement by
giving written notice to the Seller if the Closing shall not have
occurred (i) on or before 70 days following the date of this
Agreement if the Reserve Bank of India shall have disapproved the
transfer of the Margo Shares prior to such date and (ii) on or
before 120 days following the date of this Agreement by reason of
the failure of any condition precedent under Section 5.1 hereof
(unless the failure results primarily from a breach by the Buyer
of any representation, warranty or covenant contained in this
Agreement, in which event the period set forth in
clause (ii) shall be the later of (x) the date which is 50 days
after the date of disclosure of such breach to the Seller by the
Buyer or (y) 120 days.)
(d) the Seller may terminate this Agreement by giving
written notice to the Buyer if the Closing shall not have
occurred (i) on or before 70 days following the date of this
Agreement if the Reserve Bank of India shall have disapproved the
transfer of the Margo Shares and (ii) on or before 120 days
following the date of this Agreement by reason of the failure of
any condition precedent under Section 5.2 hereof (unless the
failure results primarily from a breach by the Seller of any
representation, warranty or covenant contained in this Agreement,
in which event the period set forth in clause (ii) shall be the
later of (x) the date which is 50 days after the disclosure of
the breach to the Buyer by the Seller or (y) 120 days).
8.2 Effect of Termination. If either Party terminates this
Agreement pursuant to Section 8.1, all obligations of the Parties
hereunder shall terminate without any liability of either Party
to the other Party. Upon termination of this Agreement, that
certain Purchase and Sale Agreement dated as of the date hereof
between Buyer and Seller relating to the sale of the Margo Shares
shall also terminate. Notwithstanding the foregoing, each Party
shall be liable to the other Party for breaches of this Agreement
occurring prior to such termination except as set forth below:
(a) If Buyer terminates this Agreement because the
condition set forth in Section 5.1(b) has not been satisfied as a
result of the occurrence of an "Intervening Event," Seller shall
have no liability to Buyer arising out of the occurrence of the
Intervening Event. An "Intervening Event" shall mean (I) an
PAGE
<PAGE>
event or circumstance which occurs after the date of this
Agreement and prior to the Closing, which was not caused by the
Seller's intentional actions or negligence and which is disclosed
to the Buyer by the Seller prior to the Closing or (II) with
respect to a representation qualified to the Seller's knowledge,
the receipt by the Seller after the date of this Agreement and
prior to the Closing of written notice of an event or
circumstance of which the Seller had no knowledge as of the date
of this Agreement and which was not caused by the Seller's
intentional actions or negligence; and
(b) If Buyer terminates this Agreement because the
condition set forth in Section 5.1(b) has not been satisfied as a
result of an occurrence or event other than (i) a fraudulent or
intentional misrepresentation on the part of the Seller or (ii)
an Intervening Event, then any claim brought by the Buyer in
respect of the failure of such condition to occur shall (I) be
brought no later than the earlier of (x) 450 days following the
date of this Agreement or (y) the one-year anniversary of the
date of termination of this Agreement and (II) allege Damages (as
defined in Section 7.1) of no less than $150,000. The Seller
shall have the benefit of the provisions of Section 7.7 with
respect to any such claim.
ARTICLE IX
DEFINITIONS
For purposes of this Agreement, each of the following
defined terms is defined in the Section of this Agreement
indicated below.
Defined Term Section
Accounts Receivable 1.1(a)(i)
Acquired Assets 1.1(a)
Affiliate 4.5
Ancillary Agreements 1.2(b)(ii)
Assigned Contracts 1.1(a)(v)
Assumed Liabilities 1.2(a)
Buyer Introduction
CERCLA 2.12
Closing 1.4(a)
Closing Statement 1.6(b)
Closing Date 1.4(a)
Contracts in Progress 1.1(a)(i)
Damages 7.1
Disclosure Schedule Article II
Environmental Law 2.12
Excluded Assets 1.1(b)
Financial Statements 2.4(a)
Foreign Companies 1.1(a)(vii)
Governmental Entity 1.1(a)(vii)
Initial Closing Statement 1.6(a)
Intellectual Property 1.1(a)(iv)
Intervening Event 8.2(a)
Knowledge 1.2(d)
PAGE
<PAGE>
Leased Premises 1.4(b)(vi)
Margo 1.1(a)(vii)
Materials of Environmental Concern 2.12
Neutral Accountants 1.6(b)
Ordinary Course of Business 1.2(a)(ii)
Organizational Documents 2.18
Parties Introduction
Permits 1.1(a)(vi)
Pesticide Registrations 1.1(a)(vi)
Purchase Price 1.3
Restricted Employee 6.2
Retained Liabilities 1.2(b)
Security Interest 2.3
Seller Introduction
TEIH Introduction
TTC Introduction
December 31, 1995 Balance Sheet 1.2(a)(i)
Working Capital 1.6(d)
ARTICLE X
MISCELLANEOUS
10.1 Press Releases and Announcements. Prior to the
Closing, neither Party shall issue any press release or
announcement relating to the subject matter of this Agreement
without the prior written approval of the other Party, which
shall not be unreasonably withheld; provided, however, that
(a) either Party may issue a press release or make other public
statements announcing the signing of this Agreement and the
principal terms thereof and (b) either Party may make any public
disclosure it believes in good faith is required by law or
regulation or the applicable rules of a stock exchange (in which
case the disclosing Party shall advise the other Party and
provide it with a copy of the proposed disclosure prior to making
such disclosure).
10.2 No Third Party Beneficiaries. This Agreement
(including, without limitation, Section 6.8 hereof) shall not
confer any rights or remedies upon any person other than the
Parties and their respective successors and permitted assigns.
10.3 Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement
between the Parties and supersedes any prior understandings,
agreements, or representations by or between the Parties, written
or oral, that may have related in any way to the subject matter
hereof. Notwithstanding the foregoing, the provisions of the
Confidentiality Agreement, dated November 21, 1995, by and
between Thermo Ecotek Corporation and Seller shall survive until
the Closing, whereupon it shall terminate.
10.4 Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein
and their respective successors and permitted assigns. Neither
Party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written
PAGE
<PAGE>
approval of the other Party; provided that the Buyer may assign
its rights, interests and/or obligations hereunder to an
Affiliate of the Buyer.
10.5 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
10.6 Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
10.7 Notices. All notices, requests, demands, claims, and
other communications hereunder shall be in writing. Any notice,
request, demand, claim, or other communication hereunder shall be
deemed duly delivered four business days after it is sent by U.S.
registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service, in each case to the
intended recipient as set forth below:
If to the Seller: Copy to:
W. R. Grace & Co. - Conn. W. R. Grace & Co. - Conn.
One Town Center Road One Town Center Road
Boca Raton, Florida 33486-1010 Boca Raton, Florida
33486-1010
Telecopy: (407) 362-1865 Telecopy: (407) 362-1635
Attention: Dr. Martin B. Sherwin Attention: Secretary
If to the Buyer: Copies to:
Thermo Trilogy Corporation Hale and Dorr
81 Wyman Street 60 State Street
P.O. Box 9046 Boston, MA 02109
Waltham, MA 02254-9046 Telecopy: (617) 526-5000
Telecopy: (617) 622-1296 Attention: Kenneth A. Hoxsie,
Esq.
Attention: Brian D. Holt
Thermo Ecotek International Thermo Electron Corporation
Holdings, Inc. 81 Wyman Street
81 Wyman Street P.O. Box 9036
P.O. Box 9046 Waltham, MA 02254-9036
Waltham, MA 02254-9046 Telecopy: (617) 622-1283
Telecopy: (617) 622-1296 Attention: Seth H. Hoogasian,
Esq.
Attention: Brian D. Holt
Either Party may give any notice, request, demand, claim, or
other communication hereunder by personal delivery or telecopy,
but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and
until it actually is received by the individual for whom it is
intended. Any notice sent by telecopy shall be followed by a
PAGE
<PAGE>
confirmation copy sent by reputable overnight business courier
service. Either Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are
to be delivered by giving the other Party notice in the manner
herein set forth.
10.8 Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws (and not the
law of conflicts) of the State of Delaware.
10.9 Amendments and Waivers. The Parties may mutually
amend any provision of this Agreement at any time prior to the
Closing. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by each
of the Parties. No waiver by either Party of any default,
misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
10.10 Severability. Any term or provision of Section 6.3
that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of
a court of competent jurisdiction declares that any term or
provision of such Section is invalid or unenforceable, the
Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the
scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and
such Section shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
10.11 Expenses. Except as specifically set forth in this
Agreement, each Party shall bear its own costs and expenses
(including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby. In the
event of any litigation, claim, proceeding or arbitration with
respect to this Agreement or the Ancillary Agreements, the
prevailing Party shall be paid its reasonable legal fees and
expenses by the opposing Party.
10.12 Specific Performance. Each Party acknowledges and
agrees that the other Party would be damaged irreparably in the
event any of the provisions of Sections 6.1, 6.2 and 6.3 hereof
are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each Party agrees that the
other Party shall be entitled to an injunction or injunctions to
prevent breaches of such provisions and to enforce specifically
the terms and provisions thereof in any action instituted in any
court of the United States or any state thereof having
jurisdiction over the Parties and the matter, in addition to any
PAGE
<PAGE>
other remedy to which it may be entitled, at law or in equity.
Nothing herein shall preclude any Party from enforcing any remedy
of specific performance to which it may be entitled pursuant to
the breach of any other provision hereof.
10.13 Submission to Jurisdiction. Each Party (a) submits
to the jurisdiction of any state or federal court sitting in the
State of Delaware in any action or proceeding arising out of or
relating to this Agreement or the Ancillary Agreements (other
than the Lease), (b) agrees that all claims in respect of the
action or proceeding may be heard and determined in any such
court, and (c) agrees not to bring any action or proceeding
arising out of or relating to this Agreement or the Ancillary
Agreements in any other court (other than actions or proceedings
arising out of or relating to the Lease, which shall be brought
in any state or federal court sitting in the State of Maryland).
Each Party hereby waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any
bond, surety or other security that might be required of the
other Party with respect thereto. Either Party may make service
on the other Party by sending or delivering a copy of the process
to the Party to be served at the address and in the manner
provided for the giving of notices in Section 10.7. Nothing in
this Section 10.13, however, shall affect the right of either
Party to serve legal process in any other manner permitted by
law.
10.14 Construction. The language used in this Agreement
shall be deemed to be the language chosen by the Parties hereto
to express their mutual intent, and no rule of strict
construction shall be applied against either Party. Any
reference to any federal, state, local, or foreign statute or law
shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.
10.15 Incorporation of Exhibits and Schedules. The
Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
Buyer:
THERMO TRILOGY CORPORATION
By:________________________________
Title:_____________________________
THERMO ECOTEK INTERNATIONAL
HOLDINGS, INC.
By:
PAGE
<PAGE>
Title:
Seller:
W. R. GRACE & CO.-CONN.
By:________________________________
Title:_____________________________
Thermo Ecotek Corporation
join in this Agreement
solely for the purpose
of guaranteeing Buyer's
obligations pursuant to
Sections 1.4(b), 1.6(d),
6.1, 6.4, 6.6, 6.8, 7.2
and 10.4 hereunder.
THERMO ECOTEK CORPORATION
By:______________________
Exhibit 4.0
FISCAL AGENCY AGREEMENT
among
THERMO ECOTEK CORPORATION, as Issuer,
THERMO ELECTRON CORPORATION, as Guarantor
and
CHEMICAL BANK, as Fiscal Agent
Dated as of March 14, 1996
U.S. $33,000,000 Principal Amount
Non-Interest Bearing Convertible Subordinated Debentures Due 2001
PAGE
<PAGE>
CONTENTS
Heading Page
1. The Securities 1
2. Appointment of Agents and Security Registrar 3
3. Registration of Transfer and Exchange;
Restrictions on Transfer 4
4. Closing Date; Exchange of Regulation S
Global Security 7
5. Payment 9
6. Redemption 11
7. Conversion of Securities 13
8. Surrendered Securities 19
9. Mutilated, Destroyed, Stolen or Lost
Securities 19
10. Signatures 19
11. Agreements Concerning Agents 20
12. Offices, Resignation, Successors, Etc. of
Agents, Paying, Conversion and
Transfer Agencies 23
13. Taxes 26
14. Meetings and Votes of Holders 26
15. Merger, Consolidation or Sale of Assets 30
16. Governing Law 31
17. Amendments 31
18. Agent for Service of Process 32
19. Notices 32
20. Counterparts 34
PAGE
<PAGE>
Exhibit A- Form of Registered Security
Form of Bearer Security
Exhibit B- Form of Regulation S Global Security
Exhibit C- Form of Certificate to be given by the Euroclear
Operator or Cedel with respect to the exchange of
all or a portion of the Regulation S Global
Security for Bearer Securities
Exhibit D- Form of Certificate of Beneficial Ownership for
Bearer Securities to be provided to the Euroclear
Operator or Cedel
Exhibit E- Form of Certificate of Beneficial Ownership for
Registered Securities to be provided to the
Euroclear Operator or Cedel
Exhibit F- Form of Certificate to be given by the Euroclear
Operator or Cedel with respect to the exchange of
all or a portion of the Regulation S Global
Security for Registered Regulation S Securities
PAGE
<PAGE>
FISCAL AGENCY AGREEMENT, dated as of March 14, 1996 (this
"Agreement"), among THERMO ECOTEK CORPORATION, a corporation
duly organized and validly existing under the laws of the State
of Delaware (the "Company"), THERMO ELECTRON CORPORATION, a
corporation duly organized and validly existing under the laws
of the State of Delaware (the "Guarantor"), and CHEMICAL BANK, a
banking corporation duly organized and validly existing under
the laws of the State of New York (the "Fiscal Agent").
1. The Securities.
(a) The Company has, by a Subscription Agreement,
dated March 7, 1996 (the "Subscription Agreement"), among the
Company, the Guarantor and the managers named therein (the
"Managers"), agreed to issue and sell to the Managers U.S.
$33,000,000 aggregate principal amount of its Non-Interest
Bearing Convertible Subordinated Debentures Due 2001 (hereinafter
referred to as the "Initial Securities" and together with the
Over-Allotment Securities (as defined below), if any, the
"Securities"). In addition, the Company has granted an option
to the Managers to subscribe for up to an additional U.S.
$4,000,000 principal amount of Securities (the "Over-Allotment
Securities") solely to cover over-allotments, if any. The
amount of Securities that may be issued hereunder may be
increased by agreement among Lehman Brothers International
(Europe) (the "Lead Manager"), the Company, the Guarantor and
the Fiscal Agent, and such additional securities shall be
"Securities" hereunder. The due and punctual payment of
principal and Additional Amounts (as defined in Section 2 of the
Securities) on the Securities when and as the same shall become
due and payable, whether at maturity, upon redemption or
otherwise, are unconditionally guaranteed on a subordinated
basis by the Guarantor. The Securities shall not bear interest.
(b) Pursuant to the Subscription Agreement, the
Managers (or their affiliates) may sell the Securities to persons
who are not "U.S. Persons" (as such term is defined in Regulation
S promulgated by the United States Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933,
as amended (the "Securities Act")) in transactions that meet the
requirements of Regulation S.
(c) The Securities will initially be issued in the
form of a temporary global debenture in bearer form without
conversion rights having endorsed thereon the guarantee of the
Guarantor (the "Guarantee"), which will be deposited with a
depository in London for Cedel and Euroclear for the accounts of
the subscribers of such Securities on the Closing Date (as
defined herein). Upon deposit of the temporary global debenture,
Cedel or Euroclear, as the case may be, will credit each
subscriber with a principal amount of Securities equal to the
principal amount thereof for which it has subscribed and paid,
substantially in the form of Exhibit B hereto (the "Regulation S
Global Security"). As hereinafter provided, the Regulation S
1PAGE
<PAGE>
Global Security may subsequently be exchanged for Securities in
printed definitive form with the Guarantees endorsed thereon
either as bearer Securities ("Bearer Securities") in
denominations of U.S. $1,000 and U.S. $10,000, or fully
registered Securities ("Registered Regulation S Securities") in
denominations of U.S. $1,000 and integral multiples thereof, in
accordance with the provisions of Section 3(c). Bearer
Securities shall be substantially in the form of Exhibit A
hereto. Registered Regulation S Securities also shall be
substantially in the form of Exhibit A hereto. The Securities
which are not Bearer Securities or the Regulation S Global
Security are hereinafter collectively referred to as the
"Registered Securities."
(d) During the period beginning on the Closing Date
and ending on the date which is three years (or the then
applicable holding period under Rule 144(k) under the Securities
Act (or successor provision)) after the later of the date of
original issuance thereof and the last date on which the Company
or any affiliate of the Company was the owner thereof (or any
predecessor), all Registered Securities and all Securities issued
upon registration of transfer of or in exchange for such
Securities, shall be "Restricted Securities" and shall be subject
to the restrictions on transfer in Section 3 hereof; provided,
however, that the term "Restricted Securities" shall not include
Registered Securities as to which such restrictions on transfer
have been terminated in accordance with Section 3(e) hereof.
All Restricted Securities shall bear the legend required by
Section 3(d) hereof.
(e) The Securities will be convertible as provided in
Section 4 of the Registered Securities and the Bearer Securities
and Section 7 hereof. The Securities may be redeemed by the
Company as provided in Section 3 of the Registered Securities and
the Bearer Securities and Section 6 hereof. The Securities will
be subordinated as provided in Section 7 of the Registered
Securities and the Bearer Securities. The Registered Securities,
the Bearer Securities and the Regulation S Global Security shall
contain such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Agreement
and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as
may, consistent herewith, be determined by the officer of the
Company executing such Securities, as evidenced by his execution
of such Securities.
(f) The Company in issuing the Securities shall use
CUSIP numbers, and the Fiscal Agent may use such CUSIP numbers in
any notice of redemption with respect to the Securities. The
Company shall obtain a CUSIP number for the Registered Regulation
S Securities. In addition, the Company shall obtain an ISIN
number and a Common Code for the Regulation S Global Security,
the Bearer Securities and the Registered Regulation S Securities.
2PAGE
<PAGE>
(g) Pursuant to the Subscription Agreement, the
Managers (or their affiliates) may sell the Securities to persons
who are not persons within the United States or its possessions
or "United States persons" as defined in the Internal Revenue
Code except as provided in U.S. Treasury Regulation Section
1.163-5(c)(2)(i)(D). In compliance with United States tax laws
and regulations, Bearer Securities may not be offered or sold
during the 40-day period beginning on the Closing Date, or at
any time if part of a Manager's unsold allotment, to a person
who is within the United States or to a United States person
other than (a) foreign branches of United States financial
institutions if such institutions agree in writing to comply
with the requirements of Section 165(j)(3)(A), (B), or (C) of
the Internal Revenue Code of 1986, as amended, and the
regulations thereunder, (b) United States offices of exempt
distributors, or (c) United States offices of international
organizations or foreign central banks. United States tax laws
and regulations also require that Bearer Securities not be
delivered within the United States.
(h) The Company will use its reasonable best efforts
to have the Securities approved for listing on the Luxembourg
Stock Exchange or such other exchange as shall be agreed upon by
the Managers and the Company, as soon as practicable after the
date hereof.
2. Appointment of Agents and Security Registrar.
(a) The Company and the Guarantor hereby appoint
Chemical Bank, at present having its principal corporate trust
office at 450 West 33rd Street, New York, New York 10001, and
having its main office in London at Chemical Bank House, 125
London Wall, London EC2Y 5AJ, England, as their fiscal agent in
respect of the Securities and the Guarantees upon the terms and
subject to the conditions herein set forth. (Chemical Bank and
its successor or successors as such fiscal agent qualified and
appointed in accordance with Section 12 hereof are herein called
the "Fiscal Agent.") The Fiscal Agent shall have the powers and
authority granted to and conferred upon it herein and in the
Securities, and such further powers and authority, acceptable to
it, to act on behalf of the Company and the Guarantor as the
Company and the Guarantor may hereafter grant to or confer upon
it.
(b) The Company and the Guarantor hereby appoint
Chemical Bank, at present located at 450 West 33rd Street, New
York, New York 10001, and having its main office in London at
Chemical Bank House, 125 London Wall, London EC2Y 5AJ, England,
as their paying agent in respect of the Securities and the
Guarantees upon the terms and subject to the conditions herein
set forth. (Chemical Bank and its successor or successors as such
paying agent qualified and appointed in accordance with Section
12 hereof are herein called the "Paying Agent.") The Paying Agent
shall have the powers and authority granted to and conferred
3PAGE
<PAGE>
upon it herein and in the Securities, and such further powers
and authority, acceptable to it, to act on behalf of the Company
and the Guarantor as the Company and the Guarantor may hereafter
grant to or confer upon it. As used herein, "paying agencies"
shall mean paying agencies maintained by the Company as provided
in Section 12(f) hereof.
(c) The Company hereby appoints Chemical Bank, at
present located at 450 West 33rd Street, New York, New York
10001, and having its main office in London at Chemical Bank
House, 125 London Wall, London EC2Y 5AJ, England, as its
conversion agent in respect of the Securities upon the terms and
subject to the conditions herein set forth. (Chemical Bank and
its successor or successors as such conversion agent qualified
and appointed in accordance with Section 12 hereof are herein
called the "Conversion Agent," and the Paying Agent, the
Conversion Agent, the Transfer Agents (as herein defined) and the
Fiscal Agent are sometimes herein referred to severally as an
"Agent" and, collectively, as the "Agents."). The Conversion
Agent shall have the powers and authority granted to and
conferred upon it herein and in the Securities, and such further
powers and authority, acceptable to it, to act on behalf of the
Company as the Company may hereafter grant to or confer upon it.
As used herein, "conversion agencies" shall mean conversion
agencies maintained by the Company as provided in Section 12(f)
hereof.
(d) The Company shall cause to be kept at the
principal corporate trust office of the Fiscal Agent a register
(the registers maintained in such office and in any other office
or agency designated for such purpose (which office shall be
located outside of the United Kingdom) being herein sometimes
collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as the Fiscal Agent may
prescribe, the Company shall provide for the registration of
Registered Securities and of transfers of Registered Securities.
The Fiscal Agent is hereby appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers
of Registered Securities as herein provided.
3. Registration of Transfer and Exchange; Restrictions on
Transfer.
(a) Upon surrender for registration of transfer of any
Registered Security at any office or agency designated for such
purpose by the Company pursuant to Section 12(g) hereof, the
Company shall execute, and the Fiscal Agent shall authenticate,
register and deliver, in the name of the designated transferee
or transferees, one or more new Registered Securities of any
authorized denominations and of a like aggregate principal
amount, having endorsed thereon a Guarantee duly executed by the
Guarantor, and bearing such restrictive legends as may be
required by this Agreement; provided, however, that, with
respect to any Registered Security that is a Restricted
4PAGE
<PAGE>
Security, the Fiscal Agent shall not register the transfer of
such Security unless the conditions in Sections 3(b) hereof
shall have been satisfied. The holder of each Restricted
Security, by such holder's acceptance thereof, agrees to be
bound by the transfer restrictions set forth herein and in the
legend on such Restricted Security.
(b) Whenever any Restricted Security is presented or
surrendered for registration of transfer or exchange for a
Registered Security registered in a name other than that of the
holder, no registration of transfer or exchange shall be made
unless the Fiscal Agent has received transfer documentation
indicating that the transfer is being made pursuant to an
exemption from, or a transaction not otherwise subject to, the
registration requirements of the Securities Act. For purposes
of this Section 3(b), the Transfer Notice set forth on the
reverse of such Security shall be completed and delivered to the
Fiscal Agent. In addition, the Company and the Fiscal Agent may
require that the registered holder deliver an opinion of
counsel, certifications or other information acceptable to them
in form and substance. The Fiscal Agent shall notify the
Company upon receipt of such Transfer Notice and the Company
shall immediately advise the Fiscal Agent as to whether an
opinion of counsel, certifications or other information as
described herein shall be required for such transfer.
(c) Bearer Securities may, at the option of the holder
thereof, be exchanged at, subject to applicable laws and
regulations, the offices of the paying agencies in London and,
if the Securities are listed on the Luxembourg Stock Exchange
and so long as listed thereon, Luxembourg or as designated by
the Company for such purposes pursuant to Section 12(g), for an
equal aggregate principal amount of Registered Securities in
denominations of $1,000 and integral multiples thereof and/or
Bearer Securities of authorized denominations. Bearer Securities
are transferable upon delivery.
Registered Securities may, at the option of the holder
thereof, be exchanged at the Corporate Trust Office of the
Fiscal Agent in New York City, or subject to applicable laws and
regulations, the offices of the paying agencies in London and,
if the Securities are listed on the Luxembourg Stock Exchange
and so long as listed thereon, Luxembourg or as designated by
the Company for such purposes pursuant to Section 12(g), for an
equal aggregate principal amount of Registered Securities of
different denominations. Registered Securities shall not be
exchangeable for Bearer Securities. Whenever any Registered
Securities are so surrendered for exchange, the Company shall
execute, and the Fiscal Agent shall authenticate and deliver,
the Registered Securities which the holder making the exchange
is entitled to receive, having endorsed thereon a Guarantee duly
executed by the Guarantor.
5PAGE
<PAGE>
(d) Each certificate evidencing Restricted Securities
shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHIN
THE "UNITED STATES" OR TO "U.S. PERSONS" (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. ANY OFFER,
SALE OR OTHER DISPOSITION IS SUBJECT TO THE RIGHT OF THE
ISSUER OF THIS SECURITY AND THE FISCAL AGENT FOR SUCH ISSUER
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN
FORM AND SUBSTANCE.
(e) The restrictions imposed by Section 3(b) upon the
transferability of any particular Restricted Security shall
cease and terminate when such Restricted Security has been
transferred pursuant to Rule 144 under the Securities Act (or
any successor provision thereto), unless the holder is an
affiliate of the Company within the meaning of said Rule 144 (or
such successor provision). Any Restricted Security as to which
such restrictions on transfer shall have expired in accordance
with their terms or shall have terminated may, upon surrender of
such Restricted Security for exchange to the Fiscal Agent in
accordance with the provisions of this Section 3(e) accompanied,
by an opinion of counsel reasonably acceptable to the Company,
addressed to the Company and the Fiscal Agent and in form and
scope satisfactory to the Company, to the effect that the
transfer of such Restricted Security has been made in compliance
with Rule 144 (or such successor provision), be exchanged for a
new Registered Security, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by
Section 3(d) hereof.
(f) All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid obligations
of the Company, and the Guarantees endorsed thereon shall be the
valid obligations of the Guarantor, evidencing the same
obligations, and entitled to the same benefits under this
Agreement, as the Securities surrendered upon such registration
of transfer or exchange.
(g) Every Registered Security presented for
registration of transfer or surrendered for exchange shall be
duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Fiscal Agent
and the Transfer Agent to which such Security is presented or
surrendered and the Security Registrar, duly executed by the
holder thereof or his attorney duly authorized in writing. All
such instruments shall comply with the applicable provisions of
6PAGE
<PAGE>
this Section 3. The registration of the transfer of a Registered
Security by the Security Registrar shall be deemed to be the
written acknowledgment of such transfer on behalf of the Company.
(h) No service charge shall be made for any
registration of transfer or exchange (other than the cost of
delivery), but the Company or the Transfer Agent may require
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 4 hereof or not involving any
registration of transfer.
(i) Neither the Company nor the Fiscal Agent nor any
of the offices or agencies designated for the purposes specified
in Section 12(f) nor any Transfer Agent shall be required (i) to
exchange any Bearer Security (or portion thereof) for a
Registered Security if the Company shall determine and inform
the Fiscal Agent in writing that, as a result thereof, the
Company would incur adverse consequences under the United States
Federal income tax laws at the time of such exchange, or (ii) in
the event of a redemption in part, (A) to register the transfer
of Registered Securities or to exchange any Bearer Securities
for Registered Securities for a period of 15 days immediately
preceding the date notice is given pursuant to Section 3(e) of
the Registered Securities and the Bearer Securities identifying
the serial numbers of any Securities to be redeemed, or (B) to
register the transfer of or exchange of any Registered Security
so selected for redemption in whole or in part, except portions
not being redeemed of Securities being redeemed in part, or (C)
to exchange any Bearer Security called for redemption; provided,
however, that a Bearer Security called for redemption may be
exchanged, on the terms and conditions set forth above, for a
Registered Security that is simultaneously surrendered, with
written instruction for payment on the date fixed for redemption.
4. Closing Date; Exchange of Regulation S Global Security.
(a) At any time and from time to time after the
execution and delivery of this Agreement, the Company may
deliver Securities executed by the Company in accordance with
this Agreement bearing the Guarantees of the Guarantor endorsed
thereon to the Fiscal Agent for authentication together with an
officer's certificate of the Company directing such
authentication, and the Fiscal Agent shall thereupon authenticate
and make such Securities available for delivery upon and in
accordance with the written order of the Company. No Security
shall be valid or enforceable for any purpose unless and until
the certificate of authentication thereon shall have been
manually signed by a duly authorized signatory of the Fiscal
Agent and such duly executed certificate of authentication on any
Security shall be conclusive evidence that the Security has been
duly authenticated and delivered hereunder. The Regulation S
Global Security will be issued upon payment to the Company or its
7PAGE
<PAGE>
order in United States dollars in same-day funds by check or wire
transfer to a United States dollar account designated by the
Company, at 4:00 p.m., London time, on March 14, 1996, or at such
other time on the same or such other date, not later than 5:00
p.m., London time, on the fourth Business Day (as such term is
defined in Section 5(h) hereof) in London thereafter, as the
Managers and the Company may agree (the "Closing Date"). Such
payment will be made (1) upon authorization from the Managers and
(2) against delivery of the Regulation S Global Security for the
Securities to The Chase Manhattan Bank, N.A., London office, as
depositary (the "Common Depositary") for Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the
Euroclear System (the "Euroclear Operator"), and Cedel Bank
societe anonyme ("Cedel"). The Regulation S Global Security shall
be held on deposit with the Common Depositary for the accounts of
the Euroclear Operator and Cedel, for credit to the Managers'
respective Securities Clearance Accounts (or to such other
accounts as the Lead Manager may have specified) with the
Euroclear Operator or Cedel.
(b) On or before the Exchange Date, the Company will
execute and deliver to the Fiscal Agent, at its office in London,
definitive Registered Regulation S Securities and Bearer
Securities bearing the Guarantees of the Guarantor endorsed
thereon in the aggregate principal amount outstanding in the
Regulation S Global Security and in such proportion of Registered
Regulation S Securities to Bearer Securities as the Fiscal Agent
may specify. "Exchange Date" means the date following the
expiration of the 40-day period commencing on the Closing Date.
On or after the Exchange Date, the Regulation S Global Security
may be surrendered to the Fiscal Agent to be exchanged, as a
whole or in part, for definitive Bearer Securities without
charge, and the Fiscal Agent shall authenticate and deliver, in
exchange for such Regulation S Global Security or the portions
thereof to be exchanged, an equal aggregate principal amount of
definitive Bearer Securities, but only upon presentation to the
Fiscal Agent at its office in London of a certificate of the
Euroclear Operator or Cedel with respect to the Regulation S
Global Security or portions thereof being exchanged,
substantially in the form of Exhibit C hereto, to the effect that
it has received a certificate or certificates in substantially
the form set forth in Exhibit D hereto dated no earlier than 15
days prior to the Exchange Date and signed by the person
appearing in its records as the owner of the Regulation S Global
Security or portions thereof being exchanged. Similarly, on or
after the Exchange Date, portions of the Regulation S Global
Security may be exchanged for an equal aggregate principal amount
of definitive Registered Regulation S Securities upon
presentation to the Fiscal Agent of a certificate substantially
in the form of Exhibit F hereto, to the effect that it has
received a certificate or certificates in substantially the form
set forth in Exhibit E hereto dated no earlier than 15 days prior
to the Exchange Date and signed by the person appearing in its
8PAGE
<PAGE>
records as the owner of the Regulation S Global Security or
portions thereof being exchanged.
(c) The definitive Securities shall be printed,
lithographed or engraved or produced by any combination of these
methods or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be
listed, all as determined by the officers executing such
Securities, as evidenced by such execution.
(d) Only Bearer Securities may be issued upon receipt
by the Euroclear Operator or Cedel of a certificate or
certificates in the form of Exhibit D hereto. Bearer Securities
will be delivered only outside the United States, its territories
or its possessions. Only Registered Securities may be issued
upon receipt by the Euroclear Operator or Cedel of a certificate
or certificates in the form of Exhibit E hereto.
(e) The delivery to the Fiscal Agent by the Euroclear
Operator or Cedel of any certificate referred to above may be
relied upon by the Company and the Fiscal Agent as conclusive
evidence that a corresponding certificate or certificates has or
have been delivered to the Euroclear Operator or Cedel pursuant
to the terms of this Agreement. The Fiscal Agent shall receive
such certificate on behalf of the Company and shall promptly
deliver the original certificate to the Company, retaining a copy
of such certificate for its records.
(f) Upon any such exchange of a portion of the
Regulation S Global Security for a definitive Bearer Security or
Securities or a definitive Registered Regulation S Security or
Securities, the Regulation S Global Security shall be endorsed by
the Fiscal Agent to reflect the reduction of its principal amount
by an amount equal to the aggregate principal amount of such
definitive Security or Securities. Until so exchanged in full,
the Regulation S Global Security shall in all respects be
entitled to the same benefits under this Agreement as definitive
Securities authenticated and delivered hereunder.
5. Payment.
(a) The Company will pay or cause to be paid to the
Paying Agent the amounts, at the times and for the purposes, set
forth herein and in the text of the Securities, and the Company
hereby authorizes and directs the Paying Agent to make payment of
the principal and Additional Amounts (as defined in Section 2 of
the Registered Securities and the Bearer Securities), if any, on
the Securities from such payments.
(b) At least 15 days prior to the date on which any
payment of Additional Amounts shall be required to be made
pursuant to Section 2 of the Registered Securities and the Bearer
Securities, the Company will furnish the Paying Agent, each
9PAGE
<PAGE>
other paying agency of the Company and the Fiscal Agent with a
certificate of one of its duly authorized officers instructing
the Paying Agent and each other paying agency of the Company as
to the amounts required (i) to be deducted or withheld for or on
account of any taxes described in Section 2 of the Registered
Securities and the Bearer Securities from a payment to be made
on that date and (ii) to be paid to each holder of Securities as
Additional Amounts pursuant to that Section. If the foregoing
amounts are not uniform for all holders, then the Company's
certificate shall specify by country of residence or other
factor the amounts required to be deducted or withheld and to be
paid as Additional Amounts for each holder or class of holders
of the Securities. In the absence of its receipt of any such
certificate from the Company, the Paying Agent may make payment
without deduction or withholding. The Company and the Guarantor
hereby agree to indemnify the Paying Agent, each other paying
agency of the Company and the Fiscal Agent for, and to hold them
harmless against, any loss, liability or expense reasonably
incurred without gross negligence or bad faith on their part,
arising out of or in connection with actions taken or omitted by
any of them in reliance on any certificate furnished pursuant to
this Section.
(c) In order to provide for the payment of the
principal of the Securities as the same shall become due and
payable, the Company shall pay to the Paying Agent at its office
in London, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment
of public and private debts therein, and in same day funds, the
following amounts (and the Company shall give notice to the
Fiscal Agent at least one full Business Day prior to the date
payment is due to the Paying Agent as to the means of such
payment), to be held and applied by the Paying Agent as
hereinafter set forth:
(i) If the Company shall elect, or shall be
required, to redeem the Securities in accordance with
Section 6 hereof, the Company will pay to the Paying Agent
on the Business Day immediately prior to the date fixed for
redemption thereof in same day funds an amount sufficient
(with any amount then held by the Paying Agent and available
for the purpose) to pay the redemption price of the
Securities called for redemption on the redemption date or
entitled to be redeemed, together with Additional Amounts,
if any, thereon and the Paying Agent shall apply such amount
to the payment of the redemption price and Additional
Amounts, if any, thereon in accordance with the terms of the
Securities.
(ii) On the Business Day immediately prior to the
maturity date of the Securities, the Company shall pay to
the Paying Agent in same day funds an amount which, together
with any amounts then held by the Paying Agent, and
available for payment thereof, shall be equal to the entire
10PAGE
<PAGE>
amount of principal (and Additional Amounts, if any) to be
due on such maturity date on all the Securities then
outstanding, and the Paying Agent shall apply such amount to
each payment of the principal of (Additional Amounts, if
any, on) the Securities in accordance with the terms of the
Securities.
(d) Notwithstanding anything in this Section to the
contrary, if any payment of principal (or Additional Amounts, if
any) is due on a day that is not a Business Day, payment shall be
made on the next succeeding Business Day, with the same effect as
if made on the day such payment was due. A "Business Day" is
defined, with respect to any act to be performed pursuant hereto
or to the Securities, as any day which is not a Saturday, Sunday
or a day on which banking institutions in the place where such
act is to occur are authorized or obligated by applicable law,
regulation or executive order to close.
6. Redemption.
(a) If, under the circumstances described in Section 3
of the Registered Securities and Bearer Securities, the Company
shall elect or be required to redeem outstanding Securities, the
following provisions shall be applicable:
(i) The Company shall, at least 35 days in the case of
a redemption in whole or 75 days in the case of a redemption
in part (or such shorter period as shall be reasonably
acceptable to the Fiscal Agent) before the date designated
for such redemption, give written notice to the Agents of
its election to redeem the Securities on the redemption date
specified in such notice and state in such notice that the
conditions precedent to such redemption have occurred and
describe them, and in case of redemptions pursuant to
Section 3(b) of the Registered Securities and the Bearer
Securities, shall provide to the Fiscal Agent an opinion of
counsel satisfactory to the Fiscal Agent stating that the
legal conditions precedent to the right of the Company to
effect such redemption have occurred, and shall request the
Fiscal Agent to arrange for publication and mailing of the
notice specified in clause (a) (ii) below.
(ii) In case the Company shall give notice to the
Agents of its election to redeem the Securities, the Fiscal
Agent shall cause to be published on behalf of and at the
expense of the Company a notice of redemption in accordance
with the provisions of Section 3 of the Registered
Securities and Bearer Securities and shall mail by
first-class mail a copy of the notice to each holder of a
Registered Security at the address of such holder as it
shall appear in the Security Register. The Fiscal Agent
shall send a copy of such notice of redemption to the
Company, the Guarantor, the Paying Agent (if different from
11PAGE
<PAGE>
the Fiscal Agent) and each other paying agency of the
Company.
(iii) Such notice shall be published on behalf and at
the expense of the Company in an Authorized Newspaper (as
defined in Section 19 hereof) on a Business Day in New York
City and in London and, if the Securities are listed on the
Luxembourg Stock Exchange and so long as listed thereon, in
an Authorized Newspaper in Luxembourg, or, if publication in
either London or Luxembourg is not practical, in an
Authorized Newspaper in any country in Western Europe, as
set forth in Section 19 of this Agreement and Section 3 of
the Registered Securities and Bearer Securities. In the
case of a redemption in whole, notice will be given once not
more than 60 nor less than 30 days prior to the date fixed
for redemption. In the case of partial redemption, notice
will be given twice, the first such notice to be given not
more than 75 nor less than 60 days prior to the date fixed
for redemption and the second such notice to be given not
more than 60 and not less than 30 days prior to the date
fixed for redemption. The Fiscal Agent shall notify the
Company promptly of the portions of outstanding Securities
to be called for redemption as determined pursuant to
Section 3(a) of the Registered Securities and Bearer
Securities.
(b) Under the circumstances described in Section 3(d)
of the Registered Securities and Bearer Securities concerning the
redemption of outstanding Securities at the option of the
holders thereof, the following provisions shall be applicable:
(i) The Company shall give notice to the Fiscal
Agent of the occurrence of a Redemption Event (as defined in
Section 3(d) of the Registered Securities and Bearer
Securities) immediately upon the occurrence of such
Redemption Event. Such notice shall state:
(A) The nature of the Redemption Event;
(B) The Holder Redemption Date (as defined
in Section 3(d) of the Registered Securities and Bearer
Securities) in respect of such Redemption Event; and
(C) The redemption price as set forth in
Section 3(d) of the Registered Securities and Bearer
Securities.
(ii) The Fiscal Agent shall cause to be published
on behalf of the Company a notice of entitlement to redeem
in accordance with the provisions of Section 3 of the
Registered Securities and Bearer Securities and shall mail
by first-class mail a copy of such notice to each holder of
12PAGE
<PAGE>
a Registered Security at the address of such holder as it
shall appear in the Security Register. The Fiscal Agent
shall send a copy of such notice of entitlement to redeem to
the Company, the Guarantor, the Paying Agent (if different
from the Fiscal Agent) and each other paying agency of the
Company hereunder. Such notice shall be published on behalf
and at the expense of the Company in Authorized Newspapers
on a Business Day in New York City and in London and, if the
Securities are listed on the Luxembourg Stock Exchange and
so long as listed thereon, in an Authorized Newspaper in
Luxembourg, or, if either publication in London or
Luxembourg is not practical, in an Authorized Newspaper in
any country in Western Europe, as set forth in Section 19 of
this Agreement. Notice shall be given not later than 10 days
after the later of the Exchange Date or the date of the
occurrence of a Redemption Event.
(iii) Upon the deposit of any of the Registered
Securities or Bearer Securities with the agency designated
by the Company as the place for payment of the Registered
Securities and Bearer Securities together with a duly signed
and completed redemption notice in the form set forth on the
reverse of the Bearer Securities and Registered Securities,
all in accordance with the provisions of Section 3 of the
Registered Securities and Bearer Securities, the holder of
such Registered Security and Bearer Security shall be
entitled to receive a non-transferable receipt evidencing
such deposit.
(iv) The Fiscal Agent shall notify the Company on
each Business Day in the five Business Days prior to the
Holder Redemption Date for outstanding Securities to be
redeemed under this Section 6(b) of the amount required to
redeem such Securities.
7. Conversion of Securities.
(a) Subject to and upon compliance with the provisions
of this Section 7, at the option of the holder thereof, any
outstanding Registered Security or Bearer Security or, in the
case of any outstanding Registered Security or Bearer Security of
a denomination other than $1,000, any portion of the principal
amount thereof which is $1,000 or an integral multiple of
$1,000, may be converted into shares of the Company's common
stock, par value $.10 per share ("Common Stock"), issuable upon
conversion of the Securities, at the principal amount thereof,
or of such portion thereof, into fully paid and nonassessable
shares of Common Stock ("Conversion Shares") as set forth in the
Registered Securities and Bearer Securities. Such Registered
Securities or Bearer Securities may be converted on or after the
date which is the later of: (i) the Exchange Date, and (ii) May
30, 1996, and in any event prior to redemption or maturity. The
right to convert Securities called for redemption will terminate
at the close of business on the fifteenth day next preceding the
13PAGE
<PAGE>
date fixed for redemption (or if such date is not a Business
Day, then the next succeeding Business Day), and will be lost if
not exercised prior to that time. No payment or adjustment
shall be made upon any conversion on account of any dividends on
the Common Stock issued upon conversion. The price at which
Conversion Shares shall be delivered upon conversion (herein
called the "Conversion Price") shall be initially U.S. $20.34
per share of Common Stock. The Conversion Price shall be
adjusted in certain instances as provided in paragraphs (c)(i),
(ii), (iii), (iv), (vi) and (vii) of Section 4 of the Registered
Securities and Bearer Securities.
(b) In order to exercise the conversion privilege, the
holder of any Security to be converted shall surrender such
Security, or, if less than the entire principal amount of a
Registered Security or Bearer Security of a denomination other
than $1,000 is to be converted, the portion thereof to be
converted, at the office of the Conversion Agent or any office or
agency of the Company maintained for that purpose pursuant to
Section 12(f) hereof, accompanied by a duly signed and completed
Conversion Notice, in substantially the form set forth in the
Registered Securities and Bearer Securities, to the Company, at
such office or agency that the holder elects to convert such
Security (or specified portion thereof).
(c) Securities shall be deemed to have been converted
immediately prior to the close of business on the day of
surrender of such Securities for conversion in accordance with
the foregoing provisions, and at such time the rights of the
holders of such Securities as holders shall cease, and the
person or persons entitled to receive the Common Stock issuable
upon conversion shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the
Company shall cause to be issued or delivered at such office or
agency a certificate or certificates for the number of full
shares of Common Stock issuable or deliverable upon conversion,
together with payment, in lieu of any fraction of a share, as
provided below. The Paying Agent shall, within five business
days after the conversion date, make a payment for the
Additional Amounts, if any, thereon.
(d) In the case of any Registered Security or Bearer
Security of a denomination other than $1,000 which is converted
in part only, upon such conversion the Company shall execute and
the Fiscal Agent shall authenticate and deliver to the holder
thereof, at the expense of the Company, a new Security or
Securities of any authorized kind or denomination as requested
by such holder, in aggregate principal amount equal to the
unconverted portion of the principal amount of such Security,
having endorsed thereon a Guarantee duly executed by the
Guarantor.
14PAGE
<PAGE>
(e) No fractional shares of Common Stock shall be
issued or delivered upon conversion of Securities. If more than
one Security shall be surrendered for conversion at one time by
the same holder, the number of full shares of Common Stock which
shall be issuable or deliverable upon conversion thereof shall
be computed on the basis of the aggregate principal amount of
the Securities (or, in the case of Registered Securities or
Bearer Securities of a denomination other than $1,000, specified
portions thereof) so surrendered. Instead of any fractional
share of Common Stock which would otherwise be issuable or
deliverable upon conversion of any Security or Securities (or,
in the case of Registered Securities or Bearer Securities of a
denomination other than $1,000, specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction
in an amount equal to the same fraction of the Closing Price (as
defined in Section 4(c)(v) of the Registered Securities and
Bearer Securities) for a share of Common Stock at the close of
business on the day preceding the day of conversion.
(f) Whenever the Conversion Price is adjusted as
provided in the Registered Securities and Bearer Securities:
(i) the Company shall compute the adjusted Conversion
Price in accordance with the terms of the Registered
Securities and Bearer Securities and shall prepare a
certificate signed by the President, any Vice President or
the Treasurer of the Company setting forth the adjusted
Conversion Price and showing in reasonable detail the facts
upon which such adjustment is based, and such certificate
shall forthwith be filed with the Conversion Agent and at
each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 12(f) hereof;
and
(ii) a notice stating that the Conversion Price has
been adjusted and setting forth the adjusted Conversion
Price shall forthwith be prepared, and, as soon as
practicable after it is prepared, the Company shall promptly
cause a notice setting forth the adjusted Conversion Price
to be given to the holders of the Securities. Such notice
shall be published on behalf and at the expense of the
Company in Authorized Newspapers on a Business Day in New
York City and in London and, if the Securities are listed on
the Luxembourg Stock Exchange and so long as listed thereon,
in an Authorized Newspaper in Luxembourg, or, if publication
in either London or Luxembourg is not practical, in an
Authorized Newspaper in any country in Western Europe, as
set forth in Section 19 of this Agreement and Section 4 of
the Registered Securities and Bearer Securities.
(g) In case:
(i) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in
15PAGE
<PAGE>
cash out of its retained earnings (excluding dividends
payable in stock for which adjustment is made pursuant to
the terms of the Registered Securities and Bearer
Securities); or
(ii) the Company shall authorize the granting to the
holders of its Common Stock of rights or warrants to
subscribe for or purchase any shares of capital stock of any
class or of any other rights; or
(iii) of any reclassification of the Common Stock of
the Company (other than a subdivision or combination of its
outstanding shares of Common Stock), or of any consolidation
with, or merger of the Company into, any other corporation,
or of any merger of another corporation into the Company
(other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock of the Company), or of
any sale or transfer of all or substantially all of the
assets of the Company (which shall not include the sale or
transfer of any portion of the assets of the Company to any
corporation which, immediately following such transfer is at
least 51% owned by the Company, provided that such sale or
transfer does not result in the reclassification,
conversion, exchange or cancellation of outstanding shares
of Common Stock of the Company); or
(iv) of the involuntary dissolution, liquidation or
winding up of the Company; or
(v) the Company proposes to take any other action
which would require an adjustment of the Conversion Price
pursuant to the Registered Securities and Bearer Securities;
then the Company shall cause to be filed with the Conversion
Agent and at each office or agency maintained for the
purpose of conversion of Securities a notice setting forth
the adjusted Conversion Price and shall cause notice to be
given as provided in Section 19 except that notice need be
given once at least 20 days (or 10 days in any case
specified in clause (i) or (iii) above) prior to the
applicable record date hereinafter specified, stating (x)
the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants or, if a
record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants is to be determined, or (y)
the date on which a reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for
the securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer,
16PAGE
<PAGE>
dissolution, liquidation or winding up. The failure to give
notice required by this Section or any defect therein shall
not affect the legality or validity of any dividend,
distribution, rights, warrants, reclassification,
consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, or the vote on any such action.
(h) The Company shall, at all times, have reserved and
available, free from preemptive rights, out of its authorized
but unissued shares of Common Stock, for the purpose of
effecting the conversion of Securities, the full number of
Conversion Shares then issuable upon the conversion of all
Securities (based on the aggregate principal amount of
Securities outstanding).
(i) The Company shall in good faith use its best
efforts, to (i) cause all registrations with, and to obtain any
approvals by, any governmental authority under any Federal or
State law of the United States that may be required in connection
with the conversion of the Securities into Common Stock and the
resale thereof and (ii) to list the shares of Common Stock
required to be issued or delivered upon conversion of securities
(or other securities issuable upon conversion of the Securities)
prior to such issue or delivery on such national securities
exchange or automated over-the-counter trading market where such
Common Stock is listed or traded at the time of such delivery.
(j) The Company covenants that all shares of Common
Stock which may be issued or delivered upon conversion of
Securities (or other securities issuable upon conversion of the
Securities) will upon issuance be fully paid and nonassessable
and, except as provided in Section 13 hereof, the Company will
pay all stamp, excise or similar taxes or duties, liens and
charges with respect to the issue thereof.
(k) All converted Securities shall be held by the
Company, and may, at any time, be delivered to the Fiscal Agent
for cancellation, which shall hold or dispose of the same in
accordance with its policy for disposal of canceled securities
or as otherwise directed by the Company. Converted Securities
shall not be transferred. The Conversion Agent shall give the
Company prompt notice of all Securities which have been
converted, and if the Fiscal Agent is not also the Conversion
Agent, the Company will promptly give, or cause to be given,
written notice to the Fiscal Agent of the serial numbers of all
Securities which have been converted.
(l) In case of any consolidation with, or merger of
the Company into, any other corporation, or in case of any merger
of another corporation into the Company (other than a merger
which does not result in any reclassification, conversion,
17PAGE
<PAGE>
exchange or cancellation of outstanding shares of Common Stock of
the Company), or in case of any sale or transfer of all or
substantially all of the assets of the Company (which shall not
include the sale or transfer of any portion of the assets of the
Company to any corporation which, immediately following such
transfer is at least 51% owned by the Company, provided that
such sale or transfer does not result in the reclassification,
conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), the corporation formed by such
consolidation or resulting from such merger, or which acquires
such assets, as the case may be, shall execute and deliver to
the Fiscal Agent an amendment to the Fiscal Agency Agreement
providing that the holder of each Registered Security and Bearer
Security shall have the right during the period such Security
shall be convertible as specified in the Registered Securities
and Bearer Securities to convert such Security only into the
kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by
a holder of the number of shares of Common Stock of the Company
into which such Security might have been converted immediately
prior to such consolidation, merger, sale or transfer, assuming,
if such consolidation, merger, sale or transfer is prior to the
period such Security shall be convertible as specified in the
Registered Securities and Bearer Securities, that the Securities
were convertible at such time at the initial Conversion Price as
adjusted pursuant to the terms of the Registered Securities and
Bearer Securities. Such amendment shall provide for adjustments
which, for events subsequent to the effective date of such
amendment, shall be as nearly equivalent as may be practicable
to the adjustments provided for in the Registered Securities and
the Bearer Securities. The above provisions of this Section
shall similarly apply to successive consolidations, mergers,
sales or transfers.
(m) Subject to Section 11(j) hereof, neither the
Fiscal Agent nor the Conversion Agent or conversion agency
appointed by the Company shall at any time be under any duty or
responsibility to any holder of Securities to determine whether
any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any
such adjustment when made, or with respect to the method
employed, or herein or in the Registered Securities and Bearer
Securities provided to be employed, in making the same. Neither
the Fiscal Agent nor the Conversion Agent or conversion agency
appointed by the Company shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common
Stock or of any securities or property which may at any time be
issued or delivered upon the conversion of any Security; and
neither the Fiscal Agent nor the Conversion Agent or conversion
agency appointed by the Company makes any representation with
respect thereto. Neither the Fiscal Agent nor the Conversion
Agent or conversion agency appointed by the Company shall be
responsible for any acts or omissions of the Company including
without limitation any failure of the Company to issue, transfer
18PAGE
<PAGE>
or deliver any certificates representing shares of Common Stock
or other securities or property or to make any cash payment upon
the delivery of any Security for the purpose of conversion or to
comply with any of the covenants contained in this Section 7.
(n) Any Common Stock issued upon conversion of a
Restricted Security ("Restricted Common Stock") at any time prior
to the date which is three years (or the then applicable holding
period under Rule 144(k) under the Securities Act (or successor
provision)) after the date of original issuance of such
Restricted Security and the last date on which the Company or
any affiliate of the Company was the owner thereof (or any
predecessor), shall be subject to the restrictions on transfer
set forth in Section 3 hereof to the same extent as such
Restricted Securities which were so converted. All shares of
Restricted Common Stock shall bear the legend and transfer
requirements set forth in Section 3(d) hereof, with such
modifications thereto as the Company shall deem appropriate.
8. Surrendered Securities.
All Securities surrendered for payment, redemption,
retirement, transfer or exchange and all Securities purchased by
the Company or any subsidiary shall be delivered to the Fiscal
Agent. In any such case the Fiscal Agent shall cancel all
Securities not previously canceled and destroy all such
Securities and coupons so delivered and shall furnish to the
Company and the Guarantor a certificate with respect to such
destruction. Such certificate shall state, in the case of
destruction of the Regulation S Global Security, that all
certificates of the Euroclear Operator or Cedel as to beneficial
ownership required by Section 4 hereof have been duly presented
by the Euroclear Operator or Cedel.
9. Mutilated, Destroyed, Stolen or Lost Securities.
The Fiscal Agent is hereby authorized, in accordance
with the provisions of the Securities and this Section, from time
to time to authenticate and deliver Securities in exchange for or
in lieu of Securities that become mutilated, destroyed, stolen or
lost, upon receipt of indemnity and such other documents or
proof as may be required in form and substance satisfactory to
the Fiscal Agent, the Company and the Guarantor. Every Security
authenticated and delivered in exchange for or in lieu of any
such Security shall have endorsed thereon a Guarantee and shall
be considered obligations of the Company and the Guarantor .
10. Signatures.
(a) Securities shall be executed on behalf of the
Company by its President, its Secretary, any Vice President or
its Treasurer, any of whose signatures may be manual or in
facsimile. Any signature in facsimile may be imprinted or
otherwise reproduced on the Securities. The Company may adopt
and use the signature or facsimile signature of any person who
19PAGE
<PAGE>
shall be a President, Secretary, Vice President or Treasurer at
the time of the execution of the Securities, notwithstanding the
fact that at the time the Securities shall be authenticated and
delivered, or disposed of, such person shall have ceased to have
held such office by virtue of which such person so executed such
security.
(b) The Guarantees shall be executed on behalf of the
Guarantor by its President, any Vice President, or its
Treasurer, manually or in facsimile, and a facsimile of its
corporate seal shall be impressed, imprinted or engraved thereon
and shall be attested by its Secretary or one of its Assistant
Secretaries, whose signature may be manual or in facsimile,
prior to the authentication of the Securities on which they are
endorsed. Any signature in facsimile may be imprinted or
otherwise reproduced on the Guarantees. The Guarantor may adopt
and use the signature or facsimile signature of any person who
shall be any such officer of the Guarantor at the time of the
execution of the Guarantee, notwithstanding the fact that at the
time the Securities shall be authenticated and delivered, or
disposed of, such person shall have ceased to be such officer of
the Guarantor.
11. Agreements Concerning Agents.
Each of the Agents accepts its obligations herein and
in the Securities, upon the terms and conditions hereof and
thereof, including the following, to all of which the Company and
the Guarantor agree and to all of which the rights hereunder of
the holders from time to time of the Securities and coupons shall
be subject:
(a) Each of the Agents shall be entitled to reasonable
compensation for all services rendered by such Agent, as
separately agreed by the Company and the Agent, and the Company
and the Guarantor agree promptly to pay such compensation and to
reimburse each of the Agents for the reasonable out-of-pocket
expenses (including, but not limited to, counsel fees) incurred
by such Agent in connection with the services rendered by it
hereunder. The Company and the Guarantor also agree to
indemnify each of the Agents and each other paying agency and
conversion agency of the Company for, and to hold it harmless
against, any loss, liability or expense (including the costs and
expenses of defending against any claim of liability) incurred
without negligence or bad faith on the part of such Agent or
other paying agency and conversion agency of the Company
hereunder. The obligations of the Company and the Guarantor
under this clause (a) shall survive payment of the Securities or
the resignation or removal of any Agent or paying agency or
conversion agency.
(b) In acting under this Agreement and in connection
with the Securities, each of the Agents and each other paying
agency and conversion agency of the Company is acting solely as
20PAGE
<PAGE>
agent of the Company, and does not assume any obligation, or
relationship of agency or trust, for or with any of the owners or
holders of the Securities or coupons, except that all funds held
by the Paying Agent or any other paying agency of the Company for
payment of principal of (or Additional Amounts, if any, on) the
Securities shall be held in trust but need not be segregated
from other funds except as required by law and as set forth
herein and in the Securities, and shall be applied as set forth
herein and in the Securities; provided, however, that monies
paid by the Company or the Guarantor to the Paying Agent or any
other paying agency of the Company for the payment of principal
of (or Additional Amounts, if any, on) Securities remaining
unclaimed at the end of two years after such principal (or
Additional Amounts, if any) shall have become due and payable
shall be repaid to the Company or the Guarantor, as provided and
in the manner set forth in the Securities, whereupon the
aforesaid trust shall terminate and all liability of the Paying
Agent or such other paying agency or the Company with respect
thereto shall cease.
(c) Each of the Agents and each other paying agency
and conversion agency of the Company may consult with one or more
counsel satisfactory to it (including counsel to the Company or
the Guarantor), and the written opinion of such counsel shall be
full and complete authorization and protection in respect of any
action taken, omitted or suffered by it hereunder in good faith
and in accordance with the opinion of such counsel.
(d) Each of the Agents and each other paying agency
and conversion agency of the Company shall be protected and shall
incur no liability for or in respect of any action taken,
omitted or suffered by it in reliance upon any Security,
Guarantee, notice, direction, consent, certificate, affidavit,
statement or other paper or document believed in good faith by
such Agent or such other paying agency and conversion agency of
the Company to be genuine and to have been signed by the
property parties.
(e) Each of the Agents and each other paying agency
and conversion agency of the Company, its officers, directors and
employees may become the owner of, or acquire any interest in,
any Securities, with the same rights that it or they would have
if it were not an Agent or such other paying agency of the
Company hereunder, and may engage or be interested in any
financial or other transaction with the Company, the Guarantor
and their affiliates and may act on, or as depositary, trustee
or agent for, any committee or body of holders of Securities or
other obligations of the Company or the Guarantor, as freely as
if it were not an Agent or a paying agency or conversion agency
of the Company hereunder.
(f) Neither the Paying Agent nor any other paying
agency of the Company shall be under any liability for interest
21PAGE
<PAGE>
on any monies at any time received by it pursuant to any of the
provisions of this Agreement or of the Securities.
(g) The recitals contained herein and in the
Securities (except in the Fiscal Agent's certificates of
authentication), shall be taken as the statements of the Company
or the Guarantor, as the case may be, and the Agents assume no
responsibility for the correctness of the same. None of the
Agents makes any representation as to the validity or sufficiency
of this Agreement or the Securities or the Guarantees, except for
such Agent's due authorization to execute this Agreement.
Neither the Agents nor any other paying agency or conversion
agency of the Company shall be accountable for the use or
application by the Company of the proceeds of any Securities
authenticated and delivered by the Fiscal Agent in conformity
with the provisions of this Agreement.
(h) The Agents and each other paying agency and
conversion agency of the Company shall be obligated to perform
such duties and only such duties as are herein and in the
Securities specifically set forth and no implied duties or
obligations shall be read into this Agreement or the Securities
against the Agents or any other paying agency of the Company.
The Agents shall not be under any obligation to take any action
hereunder which may tend to involve them in any expense or
liability, the payment of which, within a reasonable time, is
not, in their reasonable opinion, assured to them.
(i) Unless herein or in the Securities otherwise
specifically provided, any order, certificate, notice, request,
direction, or other communication, from the Company or the
Guarantor made by or given by it under any provision of this
Agreement shall be sufficient if signed by the President, the
Secretary, any Vice President or the Treasurer of the Company or
the Guarantor, as the case may be.
(j) Anything in this Agreement to the contrary
notwithstanding, none of the Agents shall incur any liability
hereunder, except as a result of negligence or bad faith
attributable to it or its officers or employees, and shall incur
no liability for the negligence or bad faith of its agents
appointed by it with due care; provided that the Agent shall
notify the Company and the Guarantor of the appointment of any
such agents.
(k) The Agents shall not be liable for any loss caused
by events beyond the reasonable control of the Agents, including
any malfunction, interruption of or error in the transmission of
information caused by any machines or systems or interruption of
communication facilities, abnormal operating conditions or acts
of God. The Agents shall have no liability whatsoever for any
consequential, special, indirect or speculative losses or
damages.
22PAGE
<PAGE>
12. Offices, Resignation, Successors, Etc. of Agents,
Paying, Conversion and Transfer Agencies.
(a) The Company agrees that, until none of the
Securities are outstanding or until monies for the payment of all
principal of (and Additional Amounts, if any, on) all outstanding
Securities shall have been made available at the office of the
Paying Agent and shall have been returned to the Company as
provided in the Securities, there shall at all times be a Fiscal
Agent in the Borough of Manhattan, New York City, which shall be
a bank or trust company organized and doing business under the
laws of the United States of America or of any State of the
United States of America, in good standing and authorized under
such laws to exercise corporate trust powers, a Paying Agent, a
Conversion Agent and a Transfer Agent having offices in one city
in Western Europe and in New York City, which shall be a bank or
trust company organized, in good standing and doing business
under the laws of the United States of America or of any State of
the United States of America, and a paying agency, a conversion
agency and a transfer agency in at least one city in Western
Europe, which shall be Luxembourg if the Securities are listed
on the Luxembourg Stock Exchange and so long as listed thereon.
(b) Each of the Agents may at any time resign as such
Agent by giving written notice to the Company and to the
Guarantor of such intention on its part, specifying the date on
which its desired resignation shall become effective; provided,
however, that such date shall not be less than 90 days after
receipt of such notice by the Company and the Guarantor unless
the Company and the Guarantor agree to accept less notice. Each
of the Agents hereunder may be removed at any time by the filing
with it of any instrument in writing signed on behalf of the
Company and the Guarantor and specifying such removal and the
date when it is intended to become effective. Such resignation
or removal shall take effect upon the date of the appointment by
the Company and the Guarantor, as hereinafter provided, of a
successor Fiscal Agent, Conversion Agent or Paying Agent, as the
case may be, and the acceptance of such appointment by such
successor Agent. Upon its resignation or removal, each of the
Agents shall be entitled to the payment by the Company and the
Guarantor of its compensation for the services rendered
hereunder and to the reimbursement of all reasonable
out-of-pocket expenses incurred in connection with the services
rendered hereunder by such Agent.
(c) In case at any time any of the Agents shall
resign, or shall be removed, or shall be incapable of acting, or
shall file a voluntary petition as a debtor under Chapter 7 or 11
of Title 11 of the United States Code or have an order for relief
entered against it as a debtor under Chapter 7 or 11 of Title 11
of the United States Code or make an assignment for the benefit
of its creditors or consent to the appointment of a receiver of
all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or
23PAGE
<PAGE>
if an order of any court shall be entered approving any petition
filed by or against the Fiscal Agent under any legislation
similar to the provisions of Title 11 of the United States Code
or against any of the Agents under the provisions of any
legislation similar to the provisions of Title 11 of the United
States Code, or if a receiver of it or of all or any substantial
part of its property shall be appointed, or if any public officer
shall take charge or control of it or of its property or
affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Agent, qualified as aforesaid, shall be
appointed by the Company and the Guarantor by an instrument in
writing. Upon the appointment as aforesaid of a successor Agent
and acceptance by it of such appointment, the Agent so superseded
shall cease to be such Agent hereunder. If no successor Agent
shall have been so appointed by the Company and the Guarantor and
shall have accepted appointment as hereinafter provided, any
holder of a Security, on behalf of itself and all others
similarly situated, or any Agent may petition any court of
competent jurisdiction for the appointment of a successor Agent
and shall promptly notify the Company and the Guarantor of such
action.
(d) Any successor Fiscal Agent, Conversion Agent,
Transfer Agent or Paying Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company
and the Guarantor an instrument accepting such appointment
hereunder, and thereupon such successor Agent, without any
further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if
originally named as such Agent hereunder, and such predecessor,
upon payment of its charges and disbursements then unpaid, shall
thereupon become obligated to transfer, deliver and pay over,
and such successor Agent shall be entitled to receive, all
monies, securities or other property on deposit with or held by
such predecessor, as such Agent hereunder.
(e) Any corporation or bank into which any of the
Agents hereunder may be merged or converted, or any corporation
or bank with which such Agent may be consolidated, or any
corporation or bank resulting from any merger, conversion or
consolidation to which such Agent shall be a party, or any
corporation or bank to which such Agent shall sell or otherwise
transfer all or substantially all the assets and business of such
Agent, or any corporation to which the Fiscal Agent shall sell or
otherwise transfer all or substantially all of its corporate
trust business, provided that it shall be qualified as aforesaid,
shall be the successor to such Agent under this Agreement
without the execution or filing of any document or any further
act on the part of any of the parties hereto.
(f) So long as there shall be a Fiscal Agent and
Paying Agent hereunder, the Company shall maintain agencies (i)
where Registered Securities (but not Bearer Securities or
24PAGE
<PAGE>
coupons) may be presented for surrender for payment (and for the
payment of Additional Amounts on the Registered Securities, if
any) and where Securities may be surrendered for conversion in
the Borough of Manhattan, New York City, and (ii) where Bearer
Securities may be surrendered for payment (and for the payment
of Additional Amounts (pursuant to Section 2 of the Bearer
Securities) on Bearer Securities, if any) and where Bearer
Securities may be surrendered for conversion in at least one
city in Western Europe, which shall be Luxembourg if the
Securities are listed on the Luxembourg Stock Exchange and so
long as listed thereon. The Company now intends to maintain
additional agencies (subject to applicable laws and regulations)
where Bearer Securities may be surrendered for payment (and for
the payment of Additional Amounts (pursuant to Section 2 of the
Bearer Securities) on Bearer Securities, if any), where
Registered Securities may be surrendered for payment and where
Securities may be surrendered for conversion in London, England
and, if the Securities are listed on the Luxembourg Stock
Exchange and so long as listed thereon, Luxembourg, and during
such period to keep the Agents advised of the names and
locations of such agencies. Unless the Company shall otherwise
notify each of the Agents in writing, the sole such paying
agencies and conversion agencies shall be the agencies specified
in the Securities. The Company authorizes the Paying Agent to
pay to or to the order of the aforesaid agencies, upon demand by
such agencies, funds for the payment of the principal of (and
Additional Amounts pursuant to Section 2 of the Registered
Securities and Bearer Securities, if any, on) the Securities.
Except as otherwise arranged by the Company, the Fiscal Agent
shall arrange for the payment of the compensation of such paying
agencies for their services as such, and the Company and the
Guarantor shall pay to the Fiscal Agent from time to time
sufficient funds to make such payments.
(g) So long as there shall be a Fiscal Agent, Paying
Agent and Conversion Agent hereunder, the Company shall maintain
a Security Registrar and additional transfer agencies (the
"Transfer Agents") (i) where Registered Securities may be
surrendered for exchange for other Registered Securities in New
York City and (ii) in at least one city in Western Europe, which
shall be Luxembourg if the Securities are listed on the
Luxembourg Stock Exchange and so long as listed thereon, where
Bearer Securities may be delivered in exchange for Bearer
Securities or for Registered Securities. Consistent with
applicable laws and regulations, including the provisions of the
federal income tax laws of the United States, such agencies may
be the same agencies as or different agencies from those
maintained by the Company pursuant to Section 12(f).
The Company hereby appoints, subject to the listing of
the Securities on the Luxembourg Stock Exchange, Banque
Internationale a Luxembourg, 69, route d'Esch, L-1470 Luxembourg
Ville, Luxembourg, as Transfer Agent for such exchanges. The
transfer, exchange and registration of transfer or exchange of
25PAGE
<PAGE>
Registered Securities shall be made by the Fiscal Agent in New
York City.
13. Taxes.
The Company will pay all stamp taxes and other similar
duties, if any, that may be imposed by the United States of
America or the United Kingdom, or any state or political
subdivision thereof or taxing authority therein, with respect to
the execution or delivery of this Agreement, or the issuance of
the Regulation S Global Security or the Guarantees, or the
exchange from time to time of the Regulation S Global Security
for Registered Securities and Bearer Securities, or with respect
to the issue or delivery of shares of Common Stock on conversion
of Securities; provided, however, that the Company shall not be
required to pay any tax or duty 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
Security or Securities to be converted, and no such issue or
delivery shall be made unless and until the person requesting
such issue has paid to the Company the amount of any such tax or
duty or has established to the satisfaction of the Company that
such tax or duty has been paid.
14. Meetings and Votes of Holders.
(a) A meeting of holders of Securities may be called
at any time and from time to time pursuant to this Section for
any of the following purposes: (i) to give any notice to the
Company, to the Guarantor or to the Fiscal Agent, or to give any
directions to the Fiscal Agent, or to consent to the waiving of
any default hereunder or under the Registered Securities and
Bearer Securities and its consequences, or to take any other
action authorized to be taken by holders of Securities pursuant
to Section 9 of the Registered Securities and Bearer Securities;
or (ii) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal
amount of the Securities under any other provision of this
Agreement, the Registered Securities and Bearer Securities or
under applicable law.
(b) Meetings of holders of Securities may be held at
such place or places in New York City or London as the Fiscal
Agent or, in case of its failure to act, the Company, the
Guarantor or the holders calling the meeting shall from time to
time determine.
(c) The Fiscal Agent may at any time call a meeting of
holders of Securities to be held at such time and at such place
in any of the locations designated in Section 14(b) hereof as the
Fiscal Agent shall determine. Notice of every meeting of
holders shall be made as specified in Section 19 hereof, except
that such notice shall set forth the time and the place of such
meeting, in general terms the action proposed to be taken at
26PAGE
<PAGE>
such meeting and a general description of regulations applicable
to such meeting, and shall be published at least three times in
the publications specified in such Section 19, the first
publication to be not less than 21 nor more than 180 days prior
to the date fixed for the meeting.
(d) In case at any time the Company, the Guarantor or
the holders of at least 25% in aggregate principal amount of the
Securities shall have requested the Fiscal Agent to call a
meeting of the holders, by written request setting forth in
reasonable detail the action proposed to be taken at the
meeting, and the Fiscal Agent shall not have given the first
notice of such meeting within 21 days after receipt of such
request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Company, the Guarantor or
the holders of Securities in the amount above specified may
determine the time and the place in either of the locations
designated in Section 14(b) hereof for such meeting and may call
such meeting to take any action authorized in Section 14(a)
hereof by giving notice thereof as provided in Section 14(c)
hereof.
(e) To be entitled to vote at any meeting of holders
of Securities, a person shall be (i) a holder of one or more
Securities, or (ii) a person appointed by an instrument in
writing as proxy for a holder or holders of Securities by such
holder or holders, which proxy need not be a holder of
Securities. The only persons who shall be entitled to be
present or to speak at any meeting of holders shall be the
persons entitled to vote at such meeting and their counsel and
any representatives of the Fiscal Agent and its counsel and any
representatives of the Company and its counsel and any
representatives of the Guarantor and its counsel.
(f) The persons entitled to vote a majority in
principal amount of the outstanding Securities shall constitute a
quorum for the transaction of all business specified in Section
14(a) hereof. No business shall be transacted in the absence of a
quorum unless a quorum is represented when the meeting is called
to order. In the absence of a quorum within 30 minutes of the
time appointed for any such meeting, the meeting shall, if
convened at the request of the holders of Securities (as
provided in Section 14(d) hereof), be dissolved. In any other
case the meeting shall be adjourned for a period of not less
than 10 days as determined by the chairman of the meeting prior
to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided
in Section 14(c) hereof except that such notice need be
published only once but must be given not less than five days
prior to the date on which the meeting is scheduled to be
reconvened. Subject to the foregoing, at the reconvening of any
meeting adjourned for a lack of a quorum the persons entitled to
vote 25% in principal amount of the Securities outstanding shall
constitute a quorum for the taking of any action set forth in
27PAGE
<PAGE>
the notice of the original meeting. Notice of the reconvening
of an adjourned meeting shall state expressly the percentage of
the aggregate principal amount of the Securities that shall
constitute a quorum. At a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid, any
resolution and all matters (except as limited by Section 9 of
the Registered Securities and Bearer Securities) shall be
effectively passed and decided if passed or decided by the
persons entitled to vote a majority in principal amount of the
Securities represented and voting at such meeting, provided that
such amount shall be not less than 25% in principal amount of
the Securities outstanding. Any holder of a Security who has
executed an instrument in writing appointing a person as his
proxy shall be deemed to be present for the purposes of
determining a quorum and be deemed to have voted; provided,
however, that such holder shall be considered as present or
voting only with respect to the matters covered by such
instrument in writing. Any resolution passed or decision taken
at any meeting of the holders of Securities duly held in
accordance with this Section 14 shall be binding on all the
holders of Securities whether or not present or represented at
the meeting.
(g) Notwithstanding any other provision of this
Agreement, the Fiscal Agent may make such reasonable regulations
as it may deem advisable for any meeting of holders of Securities
in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Bearer
Securities shall be proved by the production of the Bearer
Securities or by a certificate executed, as depositary, by, and
the appointment of any proxy shall be proved by having the
signature of the person executing the proxy witnessed or
guaranteed by, in each case, any trust company, bank or banker
satisfactory to the Fiscal Agent. Such regulations may provide
that written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof
specified herein or other proof. The holding of Registered
Securities shall be proved by the registry books maintained in
accordance with Section 2(d) hereof or by a certificate or
certificates of the Fiscal Agent in its capacity as Company's
agent for the maintenance of such books.
(h) The Fiscal Agent shall, by an instrument in
writing, appoint a temporary chairperson and a temporary
secretary of the meeting, unless the meeting shall have been
called by the Company, the Guarantor or by the holders of
Securities or the Fiscal Agent at the request of the Company, the
Guarantor or the holders of Securities as provided in Section
14(d) hereof and in the Securities, in which case the Company,
28PAGE
<PAGE>
the Guarantor or the holders calling the meeting, as the case may
be, shall in like manner appoint a temporary chairperson and a
temporary secretary. A permanent chairperson and a permanent
secretary of the meeting shall be elected by vote of the holders
of a majority in principal amount of the Securities represented
at the meeting and entitled to vote.
(i) At any meeting each holder or proxy shall be
entitled to one vote for each U.S. $1,000 principal amount of
Securities held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any
Securities challenged as not outstanding and ruled by the
chairperson of the meeting to be not outstanding. The
chairperson of the meeting shall have no right to vote, except
as a holder or proxy.
(j) Any meeting of holders of Securities duly called
pursuant to Section 14(c) or 14(d) hereof at which a quorum is
present may be adjourned from time to time by vote of the holders
(or proxies for the holders) of a majority in principal amount of
the Securities represented at the meeting and entitled to vote;
and the meeting may be held as so adjourned without further
notice.
(k) The vote upon any resolution submitted to any
meeting of holders of Securities shall be by written ballots on
which shall be subscribed the signatures of the holders of
Securities or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them.
The permanent chairperson of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record, at least
in triplicate, of the proceedings of each meeting of holders of
Securities shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing
that said notice was published as provided in Section 14(c) or
14(d) hereof and, if applicable, Section 14(f) hereof. Each copy
shall be signed and verified by the affidavits of the permanent
chairperson and secretary of the meeting, and one such copy shall
be delivered to the Company, another to the Guarantor and another
to the Fiscal Agent to be preserved by the Fiscal Agent, the copy
delivered to the Fiscal Agent to have attached thereto the
ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
15. Merger, Consolidation or Sale of Assets.
(a) If at any time there shall be a merger,
consolidation, sale or conveyance of assets or assumption of
29PAGE
<PAGE>
obligations to which any of the covenants contained in Section 6
of the Registered Securities and Bearer Securities or Section 3
of the Guarantees, is applicable, then in any such event the
successor or assuming corporation referred to therein will
promptly deliver to the Fiscal Agent:
(i) a certificate signed by an executive officer of
such successor or assuming corporation stating that as of
the time immediately after the effective date of any such
transaction, the covenants of the Company or the Guarantor,
as the case may be, contained in the Registered Securities
and Bearer Securities or the Guarantees, as applicable, have
been complied with and the successor or assuming corporation
is not in default under the provisions of this Agreement or
the Securities or the Guarantees, as applicable; and
(ii) a written opinion of legal counsel (who may be an
employee of or counsel to the successor or assuming
corporation) stating that, in such counsel's opinion, such
covenants have been complied with and that any instrument or
instruments executed in the performance of such covenants
comply with the requirements thereof.
In case of any such merger, consolidation, sale,
conveyance or assumption, such successor or assuming corporation
shall succeed to and be substituted for the Company or the
Guarantor, as the case may be, with the same effect, subject to
(in the case of a merger to which the Company is a party) Section
6(b) of the Registered Securities and Bearer Securities, as if
such successor or assuming corporation had been named herein and
in the Registered Securities and Bearer Securities or the
Guarantees, as applicable, as the Company or the Guarantor, as
the case may be; the Company or the Guarantor, as the case may
be, shall thereupon be relieved of any further obligation or
liability hereunder or upon the Securities or the Guarantees, as
applicable, provided that any successor or assuming corporation
shall have the right to redeem the Securities, pursuant to
Section 3(b) of the Registered Securities and Bearer Securities,
only as a result of circumstances which occur subsequent to such
merger, consolidation, sale, conveyance or assumption and as a
result of which the Company would have had such right if the
Company had remained the obligor on the Securities. The Company
or the Guarantor, as the case may be, as the predecessor
corporation may thereupon or at any time thereafter be
dissolved, wound up or liquidated. If applicable, such
successor or assuming corporation thereupon may cause to be
signed, and may issue either in its own name or in the name of
the Company any or all of the Securities issuable hereunder
which theretofore shall not have been executed on behalf of the
Company and delivered to the Fiscal Agent; and, upon the order
of such successor or assuming corporation, instead of the
Company, and subject to all the terms, conditions and
limitations in this Agreement prescribed, the Fiscal Agent shall
authenticate and shall deliver any Securities which previously
30PAGE
<PAGE>
shall have been signed and delivered by the officers of the
Company to the Fiscal Agent for authentication, and any
Securities which such successor or assuming corporation
thereafter shall cause to be signed and delivered to the Fiscal
Agent for that purpose. If applicable, such successor or
assuming corporation may cause to be endorsed either in its own
name or in the name of the Guarantor, Guarantees on any or all
of the Securities issuable hereunder which theretofore shall not
have been so endorsed and delivered to the Fiscal Agent. All
the Securities so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Securities
theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Securities had been issued
at the date of the execution hereof.
In case of any merger, consolidation, sale, conveyance
or assumption, such changes in phraseology and form (but not in
substance) may be made in the Securities or the Guarantees
thereafter to be issued as may be appropriate.
(b) The Fiscal Agent may rely on the documents
delivered pursuant to this Agreement by any successor or assuming
corporation pursuant to this Section 15 as conclusive evidence
that any such merger, consolidation, sale, conveyance or
assumption complies with the provisions of this Section and the
Securities.
16. Governing Law.
THIS AGREEMENT, THE SECURITIES AND THE GUARANTEES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS, UNITED STATES OF AMERICA, WITHOUT
GIVING EFFECT TO ITS CONFLICTS OF LAW RULES.
17. Amendments.
This Agreement may be amended by the parties hereto,
and certain provisions hereof may be waived, in the manner
provided in Section 9 of the Registered Securities and Bearer
Securities. This Agreement may also be amended by the parties
hereto, without the consent of the holder of any Security, for
the purposes set forth in Section 9 of the Registered Securities
and Bearer Securities and for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any
defective provision contained herein or in any manner that the
parties may mutually deem necessary or desirable, and that shall
not materially adversely affect the interests of the holders of
the Securities.
18. Agent for Service of Process.
As long as any of the Securities remain outstanding,
the Company and the Guarantor will at all times have an
authorized agent in the City of New York, upon whom process may
31PAGE
<PAGE>
be served in any legal action or proceeding arising out of or
relating to this Agreement or any Security or any Guarantee.
Service of process upon such agent and written notice of such
service mailed or delivered to the Company or the Guarantor, as
the case may be, shall to the extent permitted by law be deemed
in every respect effective service of process upon the Company or
the Guarantor, as the case may be, in any such legal action or
proceeding. Each of the Company and the Guarantor hereby
appoints the Fiscal Agent as its agent for such purpose, and
covenants and agrees that service of process in any legal action
or proceeding may be made upon it at the office of such agent
located at 450 West 33rd Street, 15th Floor, New York, New York
10001 (or such other address in the City of New York, as may be
the principal corporate trust office of such agent), unless and
until the Company or the Guarantor, as the case may be, shall
designate another agent for such purpose by written notice to
the Fiscal Agent. If the Fiscal Agent receives any such service
of process, it shall promptly notify the Company and the
Guarantor of such service.
19. Notices.
All notices hereunder shall be deemed to have been given
when deposited in the mail as first-class mail, registered or
certified, return receipt requested, postage prepaid, addressed
to any party hereto as follows:
The Company: 81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
Attn: President
with a copy to the
Guarantor and the
General Counsel of
the Guarantor
The Guarantor: 81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
Attn: Secretary,
with a copy to the General Counsel
The Fiscal Agent: 450 West 33rd Street
15th Floor
New York, New York 10001
Attn: Corporate Trust Department
Chemical Bank House
125 London Wall
London EC2Y 5AJ
England
32PAGE
<PAGE>
Attn: Corporate Agency
The Paying Agent: 450 W. 33rd Street
15th Floor
New York, New York 10001
Attn: Corporate Trust Department
Chemical Bank House
125 London Wall
London EC2Y 5A4J
England
Attn: Corporate Agency
The Transfer Agent: Banque Internationale a Luxembourg,
S.A.
69, Route d'Esch
L-1470 Luxembourg Ville, Luxembourg
or at any other address of which any of the foregoing shall have
notified the others in writing.
Notices to holders of the Securities shall be given by
publication on a Business Day in an Authorized Newspaper. For
purposes of this Agreement, the term "Authorized Newspaper"
means an English language newspaper, customarily published on
each business day in morning editions, whether or not it shall
be published in Saturday, Sunday or holiday editions, such as
The Wall Street Journal (Eastern edition) in New York City, the
Financial Times in London and the Luxemburger Wort in
Luxembourg. If by reason of the temporary or permanent
suspension of publication of any newspaper or by reason of any
other cause it shall be impossible to make publication of such
notice in an Authorized Newspaper as herein provided, then such
publication or other notice in lieu thereof as shall be made by
the Fiscal Agent shall constitute sufficient publication of such
notice, if such publication or other notice shall, so far as may
be possible, approximate the terms and conditions of the
publication in lieu of which it is given. Notices will be
mailed by the Fiscal Agent, on behalf of and at the expense of
the Company, by first-class mail to registered holders of
Registered Securities at their registered address as the same
shall appear on the books of the Fiscal Agent on the day 15 days
prior to such mailing. The Fiscal Agent shall promptly furnish
to the Company and to each other paying agency of the Company a
copy of each notice so published or mailed.
20. Counterparts.
This Agreement may be executed in separate
counterparts, and by each party separately in a separate
counterpart, each such counterpart, when so executed and
delivered, to be an original. Such counterparts shall together
constitute but one and the same instrument.
33PAGE
<PAGE>
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
34PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Fiscal Agency Agreement as of the date first above written.
THERMO ECOTEK CORPORATION
By: Jonathan W. Painter
Name: Jonathan W. Painter
Title: Treasurer
THERMO ELECTRON CORPORATION
By: Jonathan W. Painter
Name: Jonathan W. Painter
Title: Treasurer
CHEMICAL BANK,
as Fiscal Agent
By: Trevor J. Hearn
Name: Trevor J. Hearn
Title: Attorney-in-Fact
35PAGE
<PAGE>
EXHIBIT A
(FORM OF FACE OF REGISTERED SECURITY)
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHIN THE "UNITED
STATES" OR TO "U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. ANY OFFER, SALE OR OTHER DISPOSITION IS
SUBJECT TO THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE
FISCAL AGENT FOR SUCH ISSUER TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION
ACCEPTABLE TO THEM IN FORM AND SUBSTANCE.
A-1PAGE
<PAGE>
THERMO ECOTEK CORPORATION
(Incorporated in the State of Delaware)
NON-INTEREST BEARING CONVERTIBLE SUBORDINATED DEBENTURE DUE 2001
GUARANTEED ON A SUBORDINATED BASIS BY
THERMO ELECTRON CORPORATION
(Incorporated in the State of Delaware)
No. R-________________ U.S.$_______
Thermo Ecotek Corporation, a corporation duly
incorporated and existing under the laws of the State of Delaware
(the "Company"), for value received, hereby promises to pay to
________________, or registered assigns, the principal sum of
__________________ United States Dollars on March 15, 2001 upon
presentation and surrender hereof. This Security shall not bear
interest.
Reference is hereby made to the further provisions of
this Security set forth under Terms and Conditions of the
Securities on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this
place.
This Security shall not become valid or enforceable for
any purpose unless and until the certificate of authentication
hereon shall have been manually signed by a duly authorized
signatory of the Fiscal Agent.
IN WITNESS WHEREOF, the Company has caused this
Security to be duly executed in its corporate name by the manual
or facsimile signature of a duly authorized officer.
Dated: __________
THERMO ECOTEK CORPORATION
By: ______________________
Name: ____________________
Title: ___________________
Attest:
_______________________________
A-2PAGE
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-
mentioned Fiscal Agency Agreement.
CHEMICAL BANK,
as Fiscal Agent
By: _______________________
Authorized Signatory
Dated: ______________
A-3PAGE
<PAGE>
(FORM OF FACE OF BEARER SECURITY)
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO U.S. PERSONS EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,
INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a)
OF THE UNITED STATES INTERNAL REVENUE CODE.
THERMO ECOTEK CORPORATION
(Incorporated in the State of Delaware)
NON-INTEREST BEARING CONVERTIBLE SUBORDINATED DEBENTURE DUE 2001
GUARANTEED ON A SUBORDINATED BASIS BY
THERMO ELECTRON CORPORATION
(Incorporated in the State of Delaware)
No. B-______________ U.S.$ ______
Thermo Ecotek Corporation, a corporation duly
incorporated and existing under the laws of the State of Delaware
(the "Company"), for value received, hereby promises to pay to
bearer upon presentation and surrender of this Security the
principal sum of __________ United States Dollars on March 15,
2001. This Security shall not bear interest. Such payment shall
be made in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment
of public and private debts, subject to any laws or regulations
applicable thereto and to the right of the Company (limited as
provided in the Fiscal Agency Agreement (as defined on the
reverse hereof)) to terminate the appointment of any paying
agency, at the London office of Chemical Bank located at Chemical
Bank House, 125 London Wall, London EC2Y 5AJ, England, or, if the
Securities are listed on the Luxembourg Stock Exchange and so
long as listed thereon, Banque Internationale a Luxembourg S.A.,
69, Route d'Esch, L-1470 Luxembourg or at such other offices or
A-4PAGE
<PAGE>
agencies outside the United States of America, its territories or
its possessions as the Company may designate, by United States
dollar check drawn on a bank in the City of New York, or (if
arrangements satisfactory to the Company and the Fiscal Agent
(as defined on the reverse hereof) are made) by wire transfer to
a United States dollar account maintained by the holder at a
bank outside the United States, its territories and its
possessions. No payment on this Security will be made at the
corporate trust office of the Fiscal Agent or any other paying
agency maintained by the Company in the United States its
territories and possessions, nor will any payment be made by
transfer to an account in, or by mail to an address in, the
United States, its territories or possessions, except as may be
permitted by United States tax laws and regulations in effect at
the time of such payment without detriment to the Company.
Notwithstanding the foregoing, payment of this Security may be
made at the office of the Fiscal Agent in the City of New York
if full payment at all paying agencies outside the United States
is illegal or effectively precluded by exchange controls or
other similar restrictions.
Reference is hereby made to the further provisions of
this Security set forth under Terms and Conditions of the
Securities on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this
place.
This Security shall not become valid or enforceable for
any purpose unless and until the certificate of authentication
hereon shall have been manually signed by a duly authorized
signatory of the Fiscal Agent.
IN WITNESS WHEREOF, the Company has caused this
Security to be duly executed in its corporate name by the manual
or facsimile signature of a duly authorized signatory.
Dated: ______________
THERMO ECOTEK CORPORATION
By: _____________________
Name: ___________________
Title: __________________
Attest:
_______________________________
A-5PAGE
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-
mentioned Fiscal Agency Agreement.
CHEMICAL BANK,
as Fiscal Agent
By: ________________
Authorized Signatory
Dated: ____________
A-6PAGE
<PAGE>
(FORM OF REVERSE OF REGISTERED AND BEARER SECURITIES)
Terms and Conditions of the Securities
1. General.
(a) This Security is one of a duly authorized issue of
Securities of the Company designated as its Non-Interest Bearing
Convertible Subordinated Debentures Due 2001 (herein called the
"Securities"). The Company, for the benefit of the holders from
time to time of the Securities, has entered into a Fiscal Agency
Agreement dated as of March 14, 1996 (the "Fiscal Agency
Agreement") among the Company, Thermo Electron Corporation, a
corporation duly organized and existing under the laws of the
State of Delaware, as Guarantor (the "Guarantor") and Chemical
Bank, as Fiscal Agent, Paying Agent, Security Registrar and
Conversion Agent (the "Fiscal Agent"), to which Fiscal Agency
Agreement reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Guarantor, the Fiscal Agent, and
the holders of Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The
holders of the Securities will be entitled to the benefits of,
be bound by, and be deemed to have notice of, all of the
provisions of the Fiscal Agency Agreement. A copy of the Fiscal
Agency Agreement is on file and may be inspected at the office
of paying agencies appointed by the Company.
(b) The Securities are issuable as bearer securities
(the "Bearer Securities"), in the denominations of U.S. $1,000
and U.S. $10,000, and as registered securities (the "Registered
Securities"), in denominations of U.S. $1,000 and integral
multiples thereof. The Registered Securities, and transfers
thereof, shall be registered as provided in Section 8 hereof and
in the Fiscal Agency Agreement. The holder of any Bearer
Security and the registered holder of a Registered Security
shall (to the fullest extent permitted by applicable law) be
treated at all times, by all persons and for all purposes as the
absolute owner of such Security regardless of any notice of
ownership, theft or loss or of any writing thereon.
(c) The Securities are direct and unsecured
obligations of the Company, subordinated as set forth in Section
7 hereof. There are no restrictions herein on other indebtedness
or securities which may be incurred or issued by the Company.
2. Additional Amounts. The Company will pay to the holder of
this Security who is a United States Alien (as defined below)
such additional amounts ("Additional Amounts") as may be
necessary in order that every net payment of the principal of
this Security, after withholding for or on account of any
present or future tax, assessment or governmental charge imposed
upon or as a result of such payment by the United States or any
A-7PAGE
<PAGE>
political subdivision or taxing authority thereof or therein,
will not be less than the amount provided herein to be then due
and payable; provided, however, that the foregoing obligation to
pay Additional Amounts shall not apply to any one or more of the
following:
(a) any tax, assessment or other governmental charge
which would not have been so imposed but for (i) the existence of
any present or former connection between such holder (or between
a fiduciary, settlor, beneficiary, member or stockholder of, or a
person holding a power over, such holder, if such holder is an
estate, trust, partnership or corporation) and the United
States, including, without limitation, such holder (or such
fiduciary, settlor, beneficiary, member, stockholder or person
holding a power) being or having been a citizen or resident or
treated as a resident thereof or being or having been engaged in
a trade or business therein or being or having been present
therein or having or having had a permanent establishment
therein, or (ii) such holder's present or former status as a
personal holding company, foreign personal holding company,
passive foreign investment company, foreign private foundation
or other foreign tax-exempt entity or controlled foreign
corporation for United States tax purposes or a corporation
which accumulates earnings to avoid United States Federal income
tax, or (iii) such holder's status as a bank extending credit
pursuant to a loan agreement entered into in the ordinary course
of business;
(b) any tax, assessment or other governmental charge
which would not have been so imposed but for the presentation by
the holder of this Security for payment on a date more than 10
days after the date on which such payment became due and payable
or on the date on which payment thereof is duly provided,
whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer or
personal property tax or any similar tax, assessment or other
governmental charge;
(d) any tax, assessment or other governmental charge
which would not have been imposed but for the failure to comply
with certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
present or former connection with the United States of the
holder or beneficial owner of such Security if such compliance
is required by statute, regulation or ruling of the United
States or any political subdivision or taxing authority thereof
as a precondition to relief or exemption from such tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental charge
which is payable otherwise than by deduction or withholding from
payments of principal of this Security;
A-8PAGE
<PAGE>
(f) any tax, assessment or other governmental charge
required to be withheld by any paying agent from any payment of
principal of any Security if such payment can be made without
such withholding by any other paying agent; nor will Additional
Amounts be paid with respect to any payment of the principal of
this Security (or cash in lieu of issuance of shares of Common
Stock upon conversion) to a person other than the sole
beneficial owner of such payment, or that is a partnership or
fiduciary to the extent such beneficial owner, member of such
partnership or beneficiary or settlor with respect to such
fiduciary would not have been entitled to the payment of
Additional Amounts had such beneficial owner, member,
beneficiary or settlor been the holder of this Security or any
coupon appertaining hereto.
The term "United States Alien" means any person who,
for United States Federal income tax purposes, is a foreign
corporation, a non-resident alien individual, a foreign
partnership, or an estate or trust subject to United States
Federal income tax on net income basis, and the term "United
States" means the United States of America (including the
several States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction.
Except as specifically provided herein and in the
Fiscal Agency Agreement, the Company shall not be required to
make any payment with respect to any tax, assessment or other
governmental charge imposed by any government or any political
subdivision or taxing authority thereof or therein.
Whenever any Additional Amounts are to be paid on the
Securities, the Company will give notice to the Guarantor, the
Fiscal Agent, the Paying Agent and any paying agency of the
Company, all as provided in the Fiscal Agency Agreement.
3. Redemption.
(a) The Company, at its option, may redeem the
Securities, in whole or in part, at any time on or after March
15, 1999, upon notice as hereinafter prescribed, at a redemption
price equal to 100% of the principal amount thereof. In the
event of a partial redemption, the Securities to be redeemed will
be selected by the Fiscal Agent not more than 75 days before the
date fixed for redemption by such method as the Fiscal Agent
shall deem fair and appropriate. Provisions of this Security that
apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Fiscal Agent shall
notify the Company promptly of the Securities or portions of
Securities to be called for redemption.
(b) If, at any time, the Company shall determine that
as a result of any change in or amendment to the laws or any
regulations or rulings of the United States or any political
A-9PAGE
<PAGE>
subdivision or taxing authority thereof or therein affecting
taxation, or any amendment to, or change in, an official
application or interpretation of such laws, regulations or
rulings, which amendment or change is announced or becomes
effective on or after March 7, 1996, the Company has or will
become obligated to pay to the holder of any Security (other
than the Restricted Securities) Additional Amounts and such
obligation cannot be avoided by the Company taking reasonable
measures available to it, then the Company may, at its election
exercised at any time when such conditions continue to exist,
redeem such Securities as a whole but not in part, upon notice
as hereinafter prescribed, at a redemption price equal to 100%
of the principal amount; provided that no such notice of
redemption shall be given earlier than 90 days prior to the
earliest date on which the Company would be obligated to pay
such Additional Amounts were a payment in respect of such
Securities then due; and provided further that, at the time
such notice is given, such obligations to pay such Additional
Amounts remains in effect.
Prior to any redemption of the Securities pursuant to
the preceding paragraph, the Company shall provide the Fiscal
Agent with one or more certificates (signed by the President or
any Vice President and the Treasurer or the Secretary) of the
Company on which the Fiscal Agent may conclusively rely to the
effect that the Company is entitled to redeem such Securities
pursuant to such paragraph and that the conditions precedent to
the right of the Company to redeem such Securities pursuant to
such paragraph have occurred and a written opinion of counsel
(who may be an employee of the Company or the Guarantor) stating
that all legal conditions precedent to the right of the Company
to redeem such Securities pursuant to such paragraph have
occurred.
(c) Except as set forth in the next succeeding
paragraph, the Company shall redeem the Bearer Securities as a
whole but not in part, upon notice as hereinafter prescribed, at
100% of their principal amount, less applicable withholding
taxes, if any, plus any applicable Additional Amounts payable, in
the event that the Company determines that payment of principal
of a Bearer Security made outside the United States by the
Company or a paying agent, based on a written opinion of counsel,
would under any present or future laws or regulations of the
United States be subject to any certification, identification or
information reporting requirement with regard to the
nationality, residence or identity of a beneficial owner of a
Bearer Security who is a United States Alien (other than a
requirement (a) that would not be applicable to a payment made
by the Company or any one of its paying agents (i) directly to
the beneficial owner or (ii) to a custodian, nominee or other
agent of the beneficial owner, or (b) that can be satisfied by
the custodian, nominee or other agent certifying that the
beneficial owner is a United States Alien, provided, however, in
each case referred to in clauses (a)(ii) and (b), payment by
A-10PAGE
<PAGE>
such custodian, nominee or other agent of the beneficial owner
is not otherwise subject to any such requirement). The Company
shall make such determination on the basis of a written opinion
of counsel and will notify the Fiscal Agent thereof in writing
as soon as practicable, stating in the notice the effective date
of such certification, identification, or information reporting
requirement and the dates within which the redemption shall
occur, and the Fiscal Agent shall give prompt notice thereof to
the holders of the Securities in accordance with the Fiscal
Agency Agreement. The Company shall determine the redemption
date by notice to the Fiscal Agent at least 75 days before the
redemption date, unless shorter notice is acceptable to the
Fiscal Agent. Such redemption of the Bearer Securities must
take place on such date, not later than one year after the
publication of the initial notice of the Company's determination
of the existence of such certification, identification or
information reporting requirement. The Company shall not so
redeem the Bearer Securities, however, if the Company, based on
a written opinion of counsel, determines not less than 30 days
prior to the date fixed for redemption, that no such payment
would be subject to any requirement described above, in which
case the Company shall notify the Fiscal Agent, which shall give
prompt notice of that determination in accordance with the
Fiscal Agency Agreement and any earlier redemption notice shall
thereupon be revoked and of no further effect.
Notwithstanding the next preceding paragraph, if and so
long as the certification, identification or information
reporting requirement referred to in the next preceding paragraph
would be fully satisfied by payment of United States withholding,
backup withholding or similar taxes, the Company may elect, prior
to publication of the notice of redemption and in lieu of
redemption of the Bearer Securities, to have the provisions of
this paragraph apply in lieu of the provisions of the next
preceding paragraph. In that event, the Company will pay such
Additional Amounts (without regard to Section 2 hereof) as are
necessary in order that, following the effective date of such
requirements, every net payment made outside the United States
by the Company or a paying agent of the principal of a Bearer
Security to a holder who is a United States Alien (without
regard to a certification, identification or information
reporting requirement as to the nationality, residence or
identity of such holder), after deduction for United States
withholding, backup withholding or similar taxes (other than a
tax (i) that would not be applicable in the circumstances
referred to in the parenthetical clause of the first sentence of
the next preceding paragraph or (ii) are imposed as a result of
presentation of such Bearer Security for payment more than 10
days after the date on which such payment becomes due and
payable or on which payment thereof is duly provided for,
whichever occurs later), will not be less than the amount
provided in the Bearer Security to be then due and payable. If
the Company elects to pay such Additional Amounts and as long as
it is obligated to pay such Additional Amounts, the Company may
A-11PAGE
<PAGE>
subsequently redeem the Bearer Securities, at any time, in whole
but not in part, upon not more than 60 days nor less than 30
days notice, given as hereinafter prescribed, at 100% of their
principal amount, plus Additional Amounts, if any.
(d) Each Security is subject to redemption in whole or
in part (which shall be in a principal amount hereof which is
U.S. $1,000 or an integral multiple thereof) at the option of the
holder thereof on any Holder Redemption Date (as defined below)
at a redemption price equal to 100% of the principal amount
thereof, if a Redemption Event shall occur or have occurred.
For purposes hereof a "Redemption Event" shall have occurred if
the Company's Common Stock (or other equity securities into
which the Securities are then convertible) is neither listed for
trading on a United States national securities exchange nor
approved for trading on an established automated
over-the-counter trading market in the United States. The
"Holder Redemption Date" with respect to any Redemption Event
shall be the ninetieth day after the later of the Exchange Date
or the date a Redemption Event has occurred.
Notwithstanding the fact that a Security or a portion
thereof is called for redemption by the Company, each holder of a
Security desiring to exercise the option for redemption set
forth in this Section 3(d) shall, as a condition to such
redemption, on or before the close of business on the fifth day
prior to the Holder Redemption Date, surrender the Security to
be redeemed in whole or in part together with the redemption
notice hereon duly executed at the place or places specified in
the notice required by Section 3(e) and otherwise comply with
the provisions of Section 3(f). A holder of a Security who has
tendered a redemption notice (i) will be entitled to revoke its
election by delivering a written notice of such revocation
together with the holder's non-transferable receipt for such
Security to the office or agency of the Company designated as
the place for the payment of the Securities to be so redeemed on
or before the Holder Redemption Date and (ii) will retain the
right to convert its Securities into shares of Common Stock of
the Company to the extent set forth in Section 4.
(e) Notice of redemption will be given by publication
in Authorized Newspapers (as defined in the Fiscal Agency
Agreement) on a Business Day (as defined in the Fiscal Agency
Agreement) in New York City and in London and, if the Securities
are listed on the Luxembourg Stock Exchange and so long as
listed thereon, in an Authorized Newspaper in Luxembourg, or, if
either publication in London or Luxembourg is not practical, in
an Authorized Newspaper in any country in Western Europe, and by
mail to holders of Registered Securities, all as provided in the
Fiscal Agency Agreement. In the case of a redemption at the
option of the Company, notice will be given once not more than
60 nor less than 30 days prior to the date fixed for redemption.
In the case of a partial redemption at the option of the
Company, notice will be given twice, the first such notice to be
A-12PAGE
<PAGE>
given not more than 75 nor less than 60 days prior to the date
fixed for redemption and the second such notice to be given not
more than 60 nor less than 30 days prior to the date fixed for
redemption. In the case of a redemption by the Company at the
option of a holder of a Security pursuant to Section 3(d)
hereof, notice will be given by the Fiscal Agent setting forth
the information described below not later than 10 days after the
later of the Exchange Date or the occurrence of a Redemption
Event. Neither the failure to give notice nor any defect in any
notice given to any particular holder of a Security shall affect
the sufficiency of any notice with respect to other Securities.
Notices relating to the redemption of Securities
whether at the option of the Company or the holder hereof shall
specify: the date fixed for redemption or the Holder Redemption
Date, as the case may be; the redemption price; the date the
conversion privilege expires; the place or places of payment; and
that payment will be made upon presentation and surrender of the
Securities to be redeemed. In the case of a redemption by the
Company at the option of the holder of a Security pursuant to
Section 3(d), the notices given by the Fiscal Agent informing a
holder of such holder's entitlement to redeem shall also specify
that a holder electing redemption will be entitled to revoke its
election by delivering a written notice of such revocation,
together with the holder's non-transferable receipt for such
Security, to the agency designated by the Company as the place
for the payment of the Securities to be so redeemed not later
than the fifth day prior to the Holder Redemption Date. In the
case of a redemption in part at the option of the Company,
notices shall specify the aggregate principal amount of
Securities to be redeemed and the aggregate principal amount of
Securities outstanding after such partial redemption. The first
notice shall specify the last date on which exchanges or
transfers of Securities may be made, and the second notice shall
specify the serial numbers of the Securities and the portions
thereof called for redemption. In the case of a redemption in
whole or in part by the Company, notices shall specify the date
the conversion privilege expires in accordance with Section 4(a)
hereof. Such notices shall also state that the conditions
precedent, if any, to such redemption have occurred.
(f) If (i) notice of redemption has been given in the
manner set forth in Section 3(e) hereof with respect to
Securities to be redeemed at the option of the Company, or (ii)
notice of redemption has been given by the holder of a Security
to be redeemed pursuant to Section 3(d) hereof, the Securities so
to be redeemed shall become due and payable on the applicable
redemption date specified in such notice and upon presentation
and surrender of the Securities at the place or places specified
in the notices given by the Company with respect to such
redemption, the Securities shall be paid and redeemed by the
Company, at the places and in the manner and currency herein
specified and at the redemption price.
A-13PAGE
<PAGE>
4. Conversion.
(a) Subject to and upon compliance with the provisions
of the Fiscal Agency Agreement, a holder of Securities is
entitled, at its option, at any time on or after the date that is
the later of (i) the Exchange Date and (ii) May 30, 1996 and on
or before the close of business on March 15, 2001, or in the case
of a Security or portion thereof that is called for redemption by
the Company, or the holder thereof elects to have such Security
or portion thereof redeemed by the Company pursuant to Section
3(d) hereof, then in respect of such Security or such portion
thereof until and including, but (unless the Company and the
Guarantor default in making the payment due upon redemption) not
after, the close of business on the 15th day next preceding the
date fixed for redemption (or if such date is not a business day,
as described in Section 11 hereof in New York City, then the next
succeeding business day), to convert such Security (or any
portion of the principal amount thereof which is U.S. $1,000 or
an integral multiple thereof), at the principal amount thereof,
or of such portion, into fully paid and nonassessable shares
("Conversion Shares") (calculated as to each conversion to the
nearest 1/1000 of a share) of common stock, par value $.10 per
share of the Company ("Common Stock"), at a Conversion Price
equal to U.S. $20.34 aggregate principal amount of Securities
for each Conversion Share (the "Conversion Price") (or at the
current adjusted Conversion Price if an adjustment has been made
as provided herein) by surrender of the Security, or in the case
of a Security submitted for redemption pursuant to Section 3(d)
hereof, satisfactory evidence of such submission, together with
(i) if a Registered Security (if so required by the Company or
the Fiscal Agent), instruments of transfer in form satisfactory
to the Company and the Fiscal Agent, duly executed by the
registered holder or by his duly authorized attorney, and (ii)
the conversion notice hereon duly executed (x) at the principal
corporate trust office of the Fiscal Agent, or at such other
office or agency of the Company as may be designated by it for
such purpose in New York City, or (y) subject to any laws or
regulations applicable thereto and subject to the right of the
Company to terminate the appointment of any such conversion
agency, at Chemical Bank, Chemical Bank House, 125 London Wall,
London EC2Y 5AJ, England, and if the Securities are listed on
the Luxembourg Stock Exchange and so long as listed thereon,
Banque Internationale a Luxembourg, S.A., 69, Route d'Esch,
L-1470 Luxembourg, or at such other offices or agencies as the
Company may designate.
(b) No payment or adjustment shall be made upon any
conversion for dividends on the Common Stock delivered on
conversion. Additional Amounts, if any, thereon will be paid to
the holder within five business days after presentment for
conversion. No fractions of shares or scrip representing
fractions of shares will be issued or delivered on conversion,
but instead of any fractional interest the Company shall pay a
A-14PAGE
<PAGE>
cash adjustment as provided in the Fiscal Agency Agreement. Such
conversion shall be so affected by the Company, except payment of
Additional Amounts, if any, thereon which will be paid by the
Paying Agent.
(c) (i) In case at any time the Company shall pay or
make a dividend or other distribution on any class of capital
stock of the Company in shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following
the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced so
that the same shall equal the price determined by multiplying
such Conversion Price by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the
total number of shares of Common Stock constituting such
dividend or other distribution, such adjustment to become
effective immediately after the opening of business on the day
following the date fixed for such determination.
(ii) In the case at any time the Company shall (A)
subdivide its outstanding shares of Common Stock, (B) combine its
outstanding shares of Common Stock into a smaller number of
shares, or (C) issue by reclassification of its shares of Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing
corporation) any shares of capital stock, the Conversion Price
in effect at the effective date of such subdivision, combination
or reclassification shall be proportionately adjusted so that
the holder of any Security surrendered for conversion after such
time shall be entitled to receive the aggregate number and kind
of shares which, if such Security had been converted immediately
prior to such time, the holder would have owned upon such
conversion and been entitled to receive upon such subdivision,
combination or reclassification. Such adjustment shall become
effective immediately after the effectiveness of such
subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall
occur.
(iii) In case at any time the Company shall fix a
record date for the issuance of rights or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase
Common Stock at a price per share less than the current market
price per share of Common Stock (determined as provided in
paragraph (v) of this subsection (c)) on such record date, the
Conversion Price in effect at the opening of business on the day
following such record date shall be reduced so that the same
shall equal the price determined by multiplying such Conversion
Price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business
on such record date plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of
A-15PAGE
<PAGE>
shares so offered for subscription or purchase would purchase at
such current market price per share of Common Stock and the
denominator shall be the number of shares of Common Stock
outstanding at the close of business on such record date plus
the number of shares so offered for subscription or purchase,
such reduction to become effective immediately after the opening
of business on the day following such record date. Such
reduction shall be made successively whenever such a record date
is fixed; and in the event that such rights or warrants are not
so issued, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such
record date had not been fixed.
(iv) In case at any time the Company shall fix a
record date for the making of a distribution, by dividend or
otherwise, to all holders of its shares if Common Stock, of
evidences of its indebtedness or assets (including securities,
but excluding any dividend or distribution referred to in
paragraph (i) of this subsection (c), any rights or warrants
referred to in paragraph (iii) of this subsection (c), and any
dividend or distribution paid in cash out of the retained
earnings of the Company), then in each such case the Conversion
Price in effect after such record date shall be determined by
multiplying the Conversion Price in effect immediately prior to
such record date by a fraction, of which numerator shall be the
total number of outstanding shares of Common Stock multiplied by
the current market price per share of Common Stock (determined as
provided in paragraph (v) of this subsection (c)) on such record
date, less the fair market value (as determined by the Board of
Directors of the Company, whose determination shall be
conclusive and described in a statement filed with the Fiscal
Agent) of the portion of the assets or evidences of indebtedness
so to be distributed, and of which denominator shall be the
total number of outstanding shares of Common Stock multiplied by
such current market price per share of Common Stock. Such
adjustment shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so
made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such record
date has not been fixed.
(v) For the purpose of any computation under
paragraphs (iii) and (iv) of this subsection (c), the current
market price per share of Common Stock on any date shall be
deemed to be the average of the Closing Prices (as defined below)
for the 15 consecutive trading days upon which the principal
trading market for the Common Stock is open and selected by the
Company commencing not less than 20 nor more than 30 days before
the day in question. The "Closing Price" for any day shall be
the last reported sales prices regular way or, in case no such
reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case
on the American Stock Exchange or, if the Common Stock is not or
admitted to trading on such exchange, on the principal national
A-16PAGE
<PAGE>
securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on
any national securities exchange, the closing sale price quoted
on the Nasdaq National Market, or if not so quoted, as
determined by the Company.
(vi) The Company may make such adjustments in the
Conversion Price, in addition to those required by paragraphs
(i), (ii) and, (iii) selected by the Company of this section, as
it considers to be advisable in order that any event treated for
United States Federal income tax purposes as a dividend of stock
or stock rights shall not be taxable to the recipients.
(vii) No adjustment in the Conversion Price shall
be required unless such adjustment would require an increase or
decrease of at least U.S. $.25 in such Conversion Price;
provided, however, that any adjustment which by reason of this
paragraph (vii) is not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this subsection (c) shall be made to the
nearest cent or to the nearest 1/1000 of a share, as the case
may be.
(d) Whenever the Conversion Price is adjusted and in
the event of certain other corporate actions, as herein provided,
the Company shall give notice, all as provided in the Fiscal
Agency Agreement.
(e) The Company shall in good faith use its best
efforts, to (i) cause all registrations with, and to obtain any
approvals by, any governmental authority under any Federal or
State law of the United States that may be required in connection
with the conversion of the Securities into Common Stock and the
resale thereof and (ii) to list the shares of Common Stock
required to be issued or delivered upon conversion of securities
(or other securities issuable upon conversion of the Securities)
prior to such issue or delivery on such national securities
exchange or automated over-the-counter trading market where such
Common Stock is listed or traded at the time of such delivery.
(f) The Company shall, at all times, have reserved and
available, free from preemptive rights, out of its authorized
but unissued shares of Common Stock, for the purpose of
effecting the conversion of Securities, the full number of
shares of Common Stock then issuable upon the conversion of all
Securities (based on the aggregate principal amount of
Securities outstanding). The Company covenants that all shares
of Common Stock which may be issued or delivered upon conversion
of Securities will upon issuance be fully paid and nonassessable.
(g) In case of any consolidation with, or merger of
the Company into, any other corporation, or in case of any merger
A-17PAGE
<PAGE>
of another corporation into the Company (other than a merger
which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of
the Company), or in case of any sale or transfer of all or
substantially all of the assets of the Company (which shall not
include the sale or transfer of any portion of the assets of the
Company to any corporation which, immediately following such
transfer is at least 51% owned by the Company, provided that
such sale or transfer does not result in the reclassification,
conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), the corporation formed by such
consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to
the Fiscal Agent an amendment to the Fiscal Agency Agreement
providing that the holder of each Security shall have the right
during the period such Security shall be convertible as
specified in section (a) hereof to convert such Security only
into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by
a holder of the number of shares of Common Stock of the Company
into which such Security might have been converted immediately
prior to such consolidation, merger, sale or transfer assuming,
if such consolidation, merger, sale or transfer is prior to the
period such Security shall be convertible as specified in
subsection (a) hereof, that the Securities were convertible at
such time at the initial Conversion Price as adjusted from March
7, 1996 to such time pursuant to paragraphs (i), (ii), (iii),
(iv) and (vi) of subsection (c) hereof. Such amendment shall
provide for adjustments which, for events subsequent to the
effective date of such amendment, shall be as nearly equivalent
as may be practicable to the adjustments provided for herein.
The above provisions of this subsection shall similarly apply to
successive consolidations, mergers, sales or transfers.
5. Events of Default. In the event that any of the
following ("Events of Default") shall occur and be continuing:
(a) the Company shall fail to pay when due the
principal of any of the Securities whether at maturity or upon
redemption or otherwise; or
(b) the Company shall fail to pay any required payment
of any Additional Amounts (as described in Section 2 hereof) on
any of the Securities for a period of 10 days after the date when
due; or
(c) the Company shall fail duly to perform or observe
any other term, covenant or agreement contained in any of the
Securities or in the Fiscal Agency Agreement or the Guarantor
shall fail to perform or observe any term, covenant or
agreement contained in a Guarantee endorsed on any of the
Securities or in the Fiscal Agency Agreement, for a period of 60
days after the date on which written notice of such failure,
requiring the Company or the Guarantor, as the case may be, to
A-18PAGE
<PAGE>
remedy the same, shall first have been given to the Company and
the Fiscal Agent by the holders of at least 25% in aggregate
principal amount of the Securities at the time outstanding;
provided, however, that in the event the Company or the
Guarantor shall within the aforesaid period of 60 days commence
legal action in a court of competent jurisdiction seeking a
determination that the Company or the Guarantor, as the case may
be, had not failed duly to perform or observe the term or terms,
covenant or covenants or agreement or agreements specified in
the aforesaid notice, such failure shall not be an Event of
Default unless the same continues for a period of 10 days after
the date of any final determination to the effect that the
Company or the Guarantor had failed to duly perform or observe
one or more of such terms, covenants or agreements; or
(d) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company or
the Guarantor in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other
similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Company or the Guarantor or for any
substantial part of the property of either of them or ordering
the winding-up or liquidation of the affairs of either of them
and such decree or order shall remain unstayed and in effect for
a period of 20 consecutive days; or
(e) the Company or the Guarantor shall commence a
voluntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter
in effect, or shall consent to the entry of an order for relief
in an involuntary case under any such law, or shall consent to
the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or
similar official) of the Company or the Guarantor, as the case
may be, or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts as they
become due or shall take any corporate action in furtherance of
any of the foregoing; or
(f) an event of default, as defined in any indenture
or instrument evidencing or under which the Company shall have at
least $10,000,000 outstanding (or its equivalent in another
currency), in aggregate principal amount of indebtedness for
borrowed money, shall happen and be continuing and such default
shall involve the failure to pay the principal of such
indebtedness (or any part thereof), when due and payable after
the expiration of any applicable grace period with respect
thereto, or such indebtedness shall have been accelerated so the
same shall be or become due and payable prior to the date on
which the same would otherwise have become due and payable, and
failure to pay shall not have been cured by the Company within
20 days after such failure or such acceleration shall not be
A-19PAGE
<PAGE>
rescinded or annulled within 20 days after notice thereof shall
have first been given to the Company; provided that if such
event of default under such indenture or instrument shall be
remedied or cured by the Company or waived by the holders of
such indebtedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon
remedied, cured or waived without further action upon the part
of any of the holders of Securities; then the holder of this
Security may, at such holder's option, declare the principal of
this Security (and Additional Amounts under Section 2 hereof, if
any, thereon) to be due and payable immediately by written
notice to the Company, the Guarantor and the Fiscal Agent, and
if any such Event of Default shall continue at the time of
receipt of such written notice, the principal of this Security
(and Additional Amounts, if any, hereon) shall become
immediately due and payable, subject to the proviso of
subsection (c) of this Section 5. Upon payment of such amount of
principal (and Additional Amounts pursuant to Section 2 hereof,
if any), all of the Company's obligations in respect of payment
of principal of (and Additional Amounts, if any, on) this
Security shall terminate. Interest on overdue principal (and
Additional Amounts, if any) shall accrue from the date on which
such principal (and Additional Amounts, if any) were due and
payable to the date such principal (and Additional Amounts, if
any) are paid or duly provided for, at the rate of 5% per annum
(to the extent payment of such interest shall be legally
enforceable). Any acceleration of this Security pursuant to
this Section 5 shall not affect the subordination provisions of
Section 7 hereof.
If an Event of Default, as defined in this Section 5,
with respect to the Securities, or an event which would, with the
passing of time or the giving of notice, or both, be an Event of
Default, shall occur and be continuing, the Company or the
Guarantor, as the case may be, shall within five Business Days
of becoming aware thereof notify the Company or the Guarantor,
as the case may be, and the Fiscal Agent in writing of such
Event of Default, and the Fiscal Agent shall thereupon promptly
notify all of the holders of the Securities of such Event of
Default.
6. Merger, Consolidation, Sale, Conveyance or Assumption.
(a) The Company will not merge or consolidate with, or
sell or convey all or substantially all of its assets to, any
other corporation, unless (i) either (A) the Company shall be the
surviving corporation in the case of a merger, (B) the assets
sold or conveyed shall be owned by a corporation which,
immediately following such sale or conveyance, is at least 51%
owned by the Company, provided that such sale or conveyance does
not result in the reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the
Company, or (C) (I) the surviving, resulting or transferee
corporation shall expressly assume the due and punctual payment
A-20PAGE
<PAGE>
(including Additional Amounts pursuant to Section 2 hereof, if
any) of all the Securities, according to their tenor, and the
due and punctual performance of all of the covenants and
obligations of the Company under the Securities and the Fiscal
Agency Agreement, by supplemental agreement reasonably
satisfactory to the Fiscal Agent and (II) the Fiscal Agent shall
have received the documentation required in the context by the
Fiscal Agency Agreement, (ii) the surviving, resulting or
transferee corporation, if not organized and validly existing
under the laws of the United States, shall expressly agree to
make payments under the Securities free of any deduction or
withholding for any and all then existing or future withholding
taxes, levies, imposts and charges whatsoever imposed by or for
the account of the jurisdiction where such successor corporation
is generally subject to taxation (or any political subdivision
or taxing authority thereof or therein) in a manner equivalent
to that set forth herein, subject to the exceptions contained in
such forms of the Securities, and (iii) the Company or such
successor corporation, as the case may be, shall not,
immediately after such merger, consolidation, sale or
conveyance, be in default in the performance of any covenants or
obligations of the Company under the Securities or the Fiscal
Agency Agreement.
(b) Upon any merger, consolidation, sale, conveyance
or assumption as provided in Section 6(a), the successor or
assuming corporation shall succeed to and be substituted for,
and may exercise every right and power of and be subject to all
the obligations of, the Company under the Securities and Fiscal
Agency Agreement, with the same effect as if such successor or
assuming corporation had been named as the Company therein and
herein and the Company shall be released from its liability as
obligor under the Securities and Fiscal Agency Agreement;
provided that any successor or assuming corporation shall have
the right to redeem the Securities pursuant to Section 3(b)
hereof only as a result of circumstances which occur subsequent
to such merger, consolidation, sale, conveyance or assumption
and as a result of which the Company would have had such right
if the Company had remained the obligor on the Securities.
7. Agreement of Subordination of Securities.
(a) The Company, for itself, its successors and
assigns, covenants and agrees, and each holder of Securities by
his acceptance thereof, likewise covenants and agrees, that the
payment of the principal of and Additional Amounts (pursuant to
Section 2 hereof) on each and all of the Securities is hereby
expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment
in full of all Senior Indebtedness of the Company (as defined
below).
A-21PAGE
<PAGE>
"Senior Indebtedness of the Company" or "Senior
Indebtedness" shall mean the principal of, premium, if any, and
interest on and all other amounts due on or with respect to the
following whether outstanding at the date of execution of the
Fiscal Agency Agreement or thereafter incurred or created:
(i) indebtedness of the Company for money borrowed by
the Company (excluding the Securities, but including, without
limitation, purchase money obligations), whether or not
evidenced by debentures, bonds, notes or other corporate debt
securities or similar instruments issued by the Company;
provided, however, that Senior Indebtedness shall not include
the Company's 4% Convertible Subordinated Debentures due 2001
issued to the Guarantor, the obligations represented by which
shall rank pari passu with the obligations represented hereby in
right of payment;
(ii) obligations to reimburse any bank or other person
in respect of amounts paid under letters of credit;
(iii) leases of real property, equipment or other
assets, which leases are capitalized in the Company's financial
statements in accordance with generally accepted accounting
principles;
(iv) commitment, standby and other fees due and payable
to financial institutions with respect to credit facilities
available to the Company;
(v) obligations of the Company under interest rate and
currency swaps, floors, caps or other similar arrangements
intended to hedge interest rates or currency exposure;
(vi) indebtedness secured by any mortgage, pledge, lien
or other encumbrance on property which is owned or held by the
Company subject to such mortgage, pledge, lien or other
encumbrance, whether or not the indebtedness secured thereby
shall have been assumed by the Company;
(vii) obligations of the Company constituting
guarantees of indebtedness of or joint obligations with another
or others which would be included in the preceding clauses (i),
(ii), (iii), (iv), (v) or (vi); and
(viii) modifications, renewals, extensions or
refundings of any of the indebtedness, leases, fees or
obligations referred to in the preceding clauses (i), (ii),
(iii), (iv), (v), (vi) or (vii), or debentures, notes or other
evidences of indebtedness issued in exchange therefor;
provided that Senior Indebtedness shall not include any
particular indebtedness, lease, fee, obligation, modification,
renewal, extension, refunding or exchanged securities if, under
the express provisions of the instrument creating or evidencing
A-22PAGE
<PAGE>
the same, or pursuant to which the same is outstanding, such
indebtedness, lease, fee or obligation or such modification,
renewal, extension, refunding or exchanged security is stated to
be not superior in right to payment to the Securities.
(b) (i) In the event of any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization or
other similar proceedings in connection therewith, relative to
the Company or to its creditors, in their capacity as such
creditors, or to its property, or in the event of any
proceedings for voluntary liquidation, dissolution or other
winding up of the Company, whether or not involving insolvency
or bankruptcy, or in the event of any assignment for the benefit
of creditors of the Company or any marshalling of assets of the
Company, then the holders of Senior Indebtedness of the Company
shall first be entitled to receive payment in full of the
principal of (and premium, if any, on) and interest, including
interest thereon accruing after the commencement of any such
proceeding, and other amounts due on or with respect to, all
Senior Indebtedness of the Company before the holders of any of
the Securities shall be entitled to receive any payment on
account of the principal of and Additional Amounts (pursuant to
Section 2 hereof) on the Securities, and to that end the holders
of Senior Indebtedness of the Company shall be entitled to
receive for application in payment thereof any payment or
distribution of any kind or character, whether in cash, property
or securities, which may be payable or deliverable in any such
proceedings in respect of the Securities, other than securities
of the Company as reorganized or readjusted or securities of the
Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinate, at least to the extent provided in this Section 7
with respect to the Securities, to the payment of all Senior
Indebtedness of the Company, provided that the rights of the
holders of Senior Indebtedness of the Company are not altered by
such reorganization or readjustment. For the purposes of this
Section 7, no consolidation, merger, conveyance or transfer made
pursuant to the provisions of Section 6 shall be deemed to be a
liquidation, reorganization, dissolution or other winding up of
the Company.
(ii) If under the circumstances set forth in paragraph
(i) of this subsection, and notwithstanding the provisions
thereof, any payment or distribution of assets of the Company of
any kind, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted or
securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment the payment of which
is subordinated, at least to the extent provided in this Section
7 with respect to the Securities, to the payment of all Senior
Indebtedness of the Company, provided that the rights of the
holders of Senior Indebtedness of the Company are not altered by
such reorganization or readjustment), shall be received by the
holders of the Securities before all Senior Indebtedness of the
A-23PAGE
<PAGE>
Company is paid in full, such payment or distribution shall be
paid over to the holders of Senior Indebtedness of the Company,
ratably, for application to the payment of all Senior
Indebtedness of the Company remaining unpaid until all Senior
Indebtedness of the Company shall have been paid in full, after
giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness of the Company.
(iii) Upon any distribution of assets of the Company
referred to in this Section, the holders of Securities shall be
entitled to rely upon any final order or decree of a court of
competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, and the
holders of Securities shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person
making any distribution to the holders of Securities for the
purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness of the
Company and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Section.
(c) (i) Upon the maturity of any Senior Indebtedness
of the Company by lapse of time, acceleration or otherwise, all
principal thereof (and premium, if any) and interest due
thereon, including interest thereon accruing after the
commencement of any proceeding of the type referred to in
paragraph (i) of Section 7(b) above, and all other amounts due
on or with respect thereto, shall first be paid in full, or such
payment duly provided for in cash, before any payment, directly
or indirectly, is made on account of the principal of and
Additional Amounts (pursuant to Section 2 hereof) on the
Securities.
(ii) Upon the happening of an event of default with
respect to any Senior Indebtedness of the Company, as defined
therein or in the instrument under which it is outstanding
permitting the holders to accelerate the maturity thereof, then,
unless and until such event of default shall have been cured or
waived or shall have ceased to exist, no payment shall be made by
the Company, directly or indirectly, on account of the principal
of, premium and Additional Amounts (pursuant to Section 2 hereof)
on the Securities.
(d) In case cash, securities or other property
otherwise payable or deliverable to the holders of the Securities
shall have been applied, pursuant to Section 7(b) or 7(c), to the
payment of Senior Indebtedness of the Company, then, upon the
payment in full of all Senior Indebtedness of the Company, the
holders of the Securities shall be subrogated to any rights of
any holders of Senior Indebtedness of the Company to receive any
further payment or distributions applicable to Senior
Indebtedness of the Company until the principal of and
A-24PAGE
<PAGE>
Additional Amounts (pursuant to Section 2 hereof) on the
Securities shall have been paid in full, and such payments or
distributions received by the holders of the Securities, by
reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the
holders of Senior Indebtedness of the Company shall, as between
the Company and its creditors other than the holders of Senior
Indebtedness of the Company, on the one hand, and the holders of
the Securities, on the other hand, be deemed to be a payment by
the Company on account of Senior Indebtedness of the Company and
not on account of the Securities.
(e) No present or future holder of any Senior
Indebtedness of the Company shall be prejudiced in any way in the
right to enforce the subordination of the Securities by any act
or failure to act on the part of the Company. The provisions of
this Section are solely for the purpose of defining the relative
rights of the holders of Senior Indebtedness of the Company, on
the one hand, and the holders of the Securities, on the other
hand, against the Company and its assets, and nothing contained
in this Section shall impair, as between the Company and the
holder of any Security, the obligation of the Company, which is
unconditional and absolute, to pay to the holder thereof, the
principal thereof and Additional Amounts (pursuant to Section 2
hereof) thereon as and when the same shall become due and
payable in accordance with the terms thereof, or prevent the
holder of any Security, upon default hereunder or under such
Security, from exercising all rights, powers and remedies
otherwise provided herein or therein or by applicable law, all
subject to the rights of the holders of Senior Indebtedness of
the Company under this Section to receive cash, property or
securities otherwise payable or deliverable to the holders of
the Securities.
(f) Nothing contained in this Section or in any of the
Securities shall prevent at any time, except under the
conditions described in Sections 7(b) and (c) hereof or during
the pendency of any dissolution, winding up, liquidation or
reorganization proceedings therein referred to, the Company from
making payments at any time of principal of or Additional
Amounts (pursuant to Section 2 hereof) on the Securities.
Nothing contained in this Section shall prevent conversions of
Securities.
8. Replacement, Transfer and Exchange of Securities.
(a) In case any Security shall at any time become
mutilated, destroyed, stolen or lost and such Security or
evidence of the loss, theft or destruction thereof (together with
the indemnity hereinafter referred to and such other documents or
proof as may be required) shall be delivered to the Fiscal Agent,
a new Security of like tenor and date and having the Guarantee
endorsed thereon will be issued by the Company in exchange for
the Security so mutilated, or in lieu of the Security so
A-25PAGE
<PAGE>
destroyed, stolen or lost, but, in the case of a destroyed,
stolen or lost Security only upon receipt of evidence
satisfactory to the Fiscal Agent, the Company and the Guarantor
that such Security was destroyed, stolen or lost, and if
required by the Fiscal Agent, the Company or the Guarantor, upon
receipt also of indemnity satisfactory to the Fiscal Agent, the
Company and the Guarantor. All expenses and reasonable charges
associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Security shall
be borne by the owner of the Security so mutilated, destroyed,
stolen or lost.
(b) As provided in the Fiscal Agency Agreement and
subject to certain limitations therein set forth, Bearer
Securities are exchangeable at, subject to applicable laws and
regulations, the offices of the paying agencies in London and, if
the Securities are listed on the Luxembourg Stock Exchange and so
long as listed thereon, Luxembourg or as designated by the
Company for such purpose pursuant to the Fiscal Agency Agreement,
for an equal aggregate principal amount of Registered Securities
in the denominations of $1,000 and integral multiples thereof
and/or Bearer Securities of authorized denominations, and
Registered Securities are exchangeable at the Corporate Trust
Office of the Fiscal Agent in New York City or, subject to
applicable laws and regulations, the offices of the paying
agencies in London and, if the Securities are listed on the
Luxembourg Stock Exchange and so long as listed thereon,
Luxembourg or as designated by the Company for such purpose
pursuant to the Fiscal Agency Agreement, for an equal aggregate
principal amount of Registered Securities of authorized
denominations as requested by the holder surrendering the same.
Registered Securities will not be exchangeable for Bearer
Securities. The Company shall not be required (a) to exchange
Bearer Securities for Registered Securities, if as a result, the
Company or the Guarantor would incur adverse consequences under
United States Federal income tax laws in effect of the time of
exchange, or (b) in the event of a redemption in part, (i) to
register the transfer of Registered Securities or to exchange
Bearer Securities for Registered Securities for a period of 15
days immediately preceding the date notice is given identifying
the serial numbers of the Securities called for such redemption;
(ii) to register the transfer or exchange of any such Registered
Securities, or portion thereof, called for redemption; or (iii)
to exchange any such Bearer Securities called for redemption;
provided, however, that a Bearer Security called for redemption
may be exchanged for a Registered Security that is
simultaneously surrendered, with written instruction for payment
on the date fixed for redemption. In the event of redemption or
conversion of a Security in part only, a new Security or
Securities for the unredeemed or unconverted portion hereof will
be issued in the name of the holder thereof.
A-26PAGE
<PAGE>
(c) The costs and expenses of effecting any exchange
or registration of transfer pursuant to the foregoing provisions,
except for the expenses of delivery by other than regular mail
(if any) and except, if the Company shall so require, the
payment of a sum sufficient to cover any tax or other
governmental charge or insurance charges that may be imposed in
relation thereto, will be borne by the Company.
(d) The Company has initially appointed as registrar
and transfer agent the Fiscal Agent acting through the Corporate
Trust Office in New York. The Company has also initially
appointed Banque Internationale a Luxembourg as a transfer
agent, subject to the listing of the Securities on the
Luxembourg Stock Exchange. The Company may at any time
terminate the appointment of the registrar and transfer agent
and appoint additional or other registrars and transfer agents
or approve any change in an office through which the registrar
and transfer agent acts; provided that, until all of the
Securities have been delivered to the Fiscal Agent for
cancellation, or monies sufficient to pay the Securities have
been made available for payment and either paid or returned to
the Company as provided in the Securities, the Company will
maintain a registrar and transfer agent in the City of New York
in the United States.
(e) For purposes of the provisions of this Security
and the Fiscal Agency Agreement, any Security authenticated and
delivered pursuant to the Fiscal Agency Agreement shall, as of
any date of determination, be deemed to be "outstanding", except
for:
(i) Securities previously canceled by the Fiscal
Agent or delivered to the Fiscal Agent for cancellation;
(ii) Securities which have been called for
redemption by the Company in accordance with Section 3 hereof or
which have become due and payable at maturity or otherwise and
with respect to which monies sufficient to pay the principal
thereof (including Additional Amounts, if any) shall have been
made available to the Fiscal Agent; or
(iii) Securities in lieu of or in substitution
for which other Securities have been authenticated and delivered
pursuant to the Fiscal Agency Agreement;
provided, however, that in determining whether the holders of
the requisite principal amount of outstanding Securities are
present at a meeting of holders of Securities for quorum
purposes or have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned
by the Company or the Guarantor or any subsidiary thereof shall
be disregarded and deemed not to be outstanding.
9. Modifications and Amendments.
A-27PAGE
<PAGE>
(a) Without the consent of any holders of Securities,
modifications of or amendments to the Fiscal Agency Agreement or
the Terms and Conditions of the Securities may be made for any
of the following purposes:
(i) to evidence the succession of another
corporation to the Company or the Guarantor and the assumption by
any such successor of the covenants of the Company or the
Guarantor, as the case may be, in the Fiscal Agency Agreement,
the Securities or the Guarantees;
(ii) to add to the covenants of the Company or the
Guarantor for the benefit of the holders of Securities, or to
surrender any right or power herein conferred upon the Company or
the Guarantor;
(iii) to permit payment of principal of Bearer
Securities in the United States, provided that such payment is
permitted by United States tax laws and regulations then in
effect;
(iv) to make provision with respect to the
conversion rights of holders of Securities in the event of a
consolidation, merger or sale of substantially all of the assets
of the Company;
(v) to cure any ambiguity, to correct or
supplement any defective provision in the Fiscal Agency Agreement
which may be inconsistent with any other provision therein, or to
make any other provisions with respect to matters or questions
arising under this Security or the Fiscal Agency Agreement,
provided such action pursuant to this clause (v) will not
materially adversely affect the interests of the holders of
Securities; or
(vi) to increase the principal amount of
Securities that may e issued pursuant to the Fiscal Agency
Agreement; or
(vii) to delete the agreement of subordination
contained in Section 7 hereof or in Section 4 of the Guarantee
and any other references thereto.
(b) Modifications and amendments to the Fiscal Agency
Agreement or to the Terms and Conditions of the Securities may
be made, and future compliance with or past default by the
Company under any of the provisions thereof may be waived, with
the written consent of the holders of not less than a majority
in aggregate principal amount of the Securities at the time
outstanding (excluding for purposes of this calculation the
aggregate principal amount of Securities held by the Company or
the Guarantor or any of its subsidiaries), or of such lesser
percentage as may act at a meeting of holders of Securities held
A-28PAGE
<PAGE>
in accordance with the provisions set forth herein; provided
that no such modification, amendment or waiver may, without the
consent of the holder of each such Security affected thereby:
(i) waive a default in the payment of the
principal of any Security;
(ii) change the stated maturity of the principal
of any Security, or reduce the principal amount thereof or change
the obligation of the Company to pay Additional Amounts pursuant
to Section 2 hereof (except as permitted by subsection (a) of
Section 9 or by the Fiscal Agency Agreement), or change the coin
or currency in which any Security is payable, or, except as
otherwise permitted or contemplated by the provisions concerning
corporate reorganizations, adversely affect the right to redeem
(pursuant to Section 3(d) hereof) or convert any Securities as
provided in Sections 3 and 4, respectively, or modify the
provisions of the Guarantees in a manner adverse to the holders;
(iii) reduce the requirements of Section 10
hereof for the adoption of a resolution of the quorum required at
any meeting of holders of Securities at which a resolution is
adopted, or reduce the percentage in principal amount of the
outstanding Securities the consent of whose holders is required
for any amendment or modification of the Fiscal Agency Agreement
or the Terms and Conditions of the Securities or the consent of
whose holders is required for any waiver (of compliance with
certain provisions of the Fiscal Agency Agreement or the
Securities or certain defaults hereunder and thereunder and their
consequences) provided for in the Terms and Conditions of the
Securities;
(iv) modify the obligation of the Company and the
Guarantor to maintain an office or agency in the City of New York
and outside the United States; or
(v) modify any of the provisions of this section
except to increase any such percentage or to provide that certain
other provisions of the Fiscal Agency Agreement or the Securities
cannot be modified or waived without the consent of the holder
of each outstanding Security affected thereby.
It shall not be necessary for any act of holders of Securities
under this Section to approve the particular form of any
proposed amendment, modification or waiver, but it shall be
sufficient if such act shall approve the substance thereof. Any
modifications, amendments or waivers to the Fiscal Agency
Agreement or to these Terms and Conditions will be conclusive
and binding on all holders of the Securities, whether or not
they have given such consent or were present at such meeting and
whether or not notation of such modifications, amendments or
waivers is made upon the Securities, and on all future holders
of Securities. Any instrument given by or on behalf of any
holder of a Security in connection with any consent to any such
A-29PAGE
<PAGE>
modification, amendment or waiver will be irrevocable once given
and will be conclusive and binding on all subsequent holders of
such Security.
10. Meetings and Votes of Holders.
(a) A meeting of holders of Securities may be called
at any time and from time to time pursuant to this Section for
any of the following purposes: (i) to give any notice to the
Company, to the Guarantor or to the Fiscal Agent, or to give any
directions to the Fiscal Agent, or to consent to the waiving of
any default hereunder and its consequences, or to take any other
action authorized to be taken by holders of Securities pursuant
to these Terms and Conditions; or (ii) to take any other action
authorized to be taken by or on behalf of the holders of any
specified aggregate principal amount of the Securities under any
other provision of the Fiscal Agency Agreement, under applicable
law or under these Terms and Conditions.
(b) Meetings of holders of Securities may be held at
such place or places in New York City or London as the Fiscal
Agent or, in case of its failure to act, the Company, the
Guarantor or the holders calling the meeting shall from time to
time determine.
The Fiscal Agent may at any time call a meeting of
holders of the Securities to be held at such time and at such
place in any of such designated locations as the Fiscal Agent
shall determine. Notice of every meeting of holders shall be
made as specified in the Fiscal Agency Agreement.
In case at any time the Company, the Guarantor or the
holders of at least 25% in aggregate principal amount of the
Securities shall have requested the Fiscal Agent to call a
meeting of the holders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting,
and the Fiscal Agent shall not have given the first notice of
such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company , the Guarantor or the holders
of Securities in the amount above specified may determine the
time and the place in such designated locations for such meeting
and may call such meeting to take any action authorized herein by
giving notice thereof as provided in the Fiscal Agency Agreement.
(c) To be entitled to vote at any meeting of holders
of Securities, a person shall be (i) a holder of one or more
Securities, or (ii) a person appointed by an instrument in
writing as proxy for a holder or holders of Securities by such
holder or holders, which proxy need not be a holder of
Securities. The only persons who shall be entitled to be present
or to speak at any meeting of holders shall be the persons
entitled to vote at such meeting and their counsel and any
representatives of the Fiscal Agent and its counsel and any
A-30PAGE
<PAGE>
representatives of the Company and its counsel and any
representatives of the Guarantor and its counsel. The persons
entitled to vote a majority in principal amount of outstanding
Securities shall constitute a quorum for the transaction of all
business specified in subsection (a) hereof. No business shall
be transacted in the absence of a quorum unless a quorum is
represented when the meeting is called to order. In the absence
of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of the
holders of Securities, be dissolved. In any other case the
meeting shall be adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided
in the Fiscal Agency Agreement. Subject to the foregoing, at
the reconvening of any meeting adjourned for a lack of a quorum
the persons entitled to vote 25% in principal amount of the
Securities outstanding shall constitute a quorum for the taking
of any action set forth in the notice of the original meeting.
Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the aggregate principal amount of
the Securities that shall constitute a quorum. At a meeting or
an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid, any resolution and all matters (except as
limited by Section 9 of these Terms and Conditions) shall be
effectively passed and decided if passed or decided by the
persons entitled to vote a majority in principal amount of the
Securities represented and voting at such meeting, provided that
such amount shall not be less than 25 % in principal amount of
the Securities outstanding. Any holder of a Security who has
executed an instrument in writing appointing a person as his
proxy shall be deemed to be present for the purposes of
determining a quorum and be deemed to have voted; provided,
however, that such holder shall be considered as present or
voting only with respect to the matters covered by such
instrument in writing. Any resolution effectively passed or
decision taken at any meeting of the holders of Securities duly
held in accordance with this Section 10 shall be binding on all
the holders of Securities whether or not present or represented
at the meeting.
(d) Notwithstanding any other provision of this
Security, the Fiscal Agent may make such reasonable regulations
as it may deem advisable for any meeting of holders of Securities
in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Bearer
Securities shall be proved by the production of the Bearer
Securities or by a certificate executed, as depositary, by, and
the appointment of any proxy shall be proved by having the
A-31PAGE
<PAGE>
signature of the person executing the proxy witnessed or
guaranteed by, in each case, any trust company, bank or banker
satisfactory to the Fiscal Agent. Such regulations may provide
that written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof
specified herein or other proof. The holding of Registered
Securities shall be proved by the registry books maintained in
accordance with the Fiscal Agency Agreement or by a certificate
or certificates of the Fiscal Agent in its capacity as the
Company's agent for the maintenance of such books.
(e) The Fiscal Agent shall, by an instrument in
writing, appoint a temporary chairperson and a temporary
secretary of the meeting, unless the meeting shall have been
called by the Company, the Guarantor or by the holders of
Securities as provided herein and in the Fiscal Agency Agreement,
in which case the Company, the Guarantor or the holders calling
the meeting, as the case may be, shall in like manner appoint a
temporary chairperson and a temporary secretary. A permanent
chairperson and a permanent secretary of the meeting shall be
elected by vote of the holders of a majority in principal amount
of the Securities represented at the meeting and entitled to
vote. At any meeting each holder or proxy shall be entitled to
one vote for each U.S. $1,000 principal amount of Securities
held or represented by him; provided, however, that no vote
shall be cast or counted at any meeting in respect of the
Securities challenged as not outstanding and ruled by the
chairperson of the meeting to be not outstanding. The
chairperson of the meeting shall have no right to vote, except
as a holder or proxy. Any meeting of holders of Securities duly
called at which a quorum is present may be adjourned from time
to time by vote of the holders (or proxies for the holders) of a
majority in principal amount of the Securities represented at
the meeting and entitled to vote; and the meeting may be held as
so adjourned without further notice.
(f) The vote upon any resolution submitted to any
meeting of holders of Securities shall be written ballots on
which shall be subscribed the signatures of the holders of
Securities or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them.
The permanent chairperson of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record, at least
in triplicate, of the proceedings of each meeting of holders of
Securities shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing
that said notice was published as provided in the Fiscal Agency
Agreement. Each copy shall be signed and verified by the
A-32PAGE
<PAGE>
affidavits of the permanent chairperson and secretary of the
meeting, and one of such copy shall be delivered to the Company,
another to the Guarantor and another to the Fiscal Agent to be
preserved by the Fiscal Agent, the copy delivered to the Fiscal
Agent to have attached thereto by ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
11. Business Days. Notwithstanding anything herein or in
the Fiscal Agency Agreement to the contrary, if any payment of
principal (or Additional Amounts, if any) is due on a day that
is not a Business Day, payment shall be made on the next
succeeding Business Day, with the same effect as if made on the
day such payment was due. A "Business Day" is defined, with
respect to any act to be performed pursuant hereto or to the
Fiscal Agency Agreement, as any day which is not a Saturday,
Sunday or a day on which banking institutions in the place where
such act is to occur are authorized or obligated by applicable
law, regulation or executive order to close.
12. Fiscal and Paying Agent.
(a) In acting under the Fiscal Agency Agreement and in
connection with the Securities, the Fiscal Agent is acting
solely as agent of the Company and the Guarantor and does not
assume any obligation, or relationship of agency or trust, for
or with the owner or holder of this Security, except that funds
held by the Fiscal Agent for payment on this Security shall be
held in trust by it and applied as set forth herein, but need
not be segregated from other funds held by it, except as
required by law. For a description of the duties and the
immunities and rights of the Fiscal Agent under the Fiscal
Agency Agreement, reference is made to the Fiscal Agency
Agreement, and the obligations of the Fiscal Agent to the holder
hereof are subject to such immunities and rights.
(b) Any monies paid by the Company to any paying
agency for payment of principal of any Security (including
Additional Amounts, if any, in respect thereof) and remaining
unclaimed for two years after such payment has been made shall be
repaid to the Company and to the extent permitted by law the
holder of any Security shall thereafter look only to the Company
or the Guarantor for any payment thereof as a general unsecured
obligation thereof and all liability of the Fiscal Agent with
respect thereto shall cease.
(c) No reference herein to the Fiscal Agency Agreement
and no provision of this Security or of the Fiscal Agency
Agreement shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and
Additional Amounts, as described above) on this Security at the
times, places and rate, and in the coin or currency, herein
prescribed or to convert or redeem (at the request of a holder)
this Security as provided herein or in the Fiscal Agency
A-33PAGE
<PAGE>
Agreement.
Title to Bearer Securities and coupons shall pass by
delivery. As provided in the Fiscal Agency Agreement and subject
to certain limitations therein set forth, the transfer of
Registered Securities is registrable on the Security Register
upon surrender of a Registered Security for registration of
transfer at the office or agency of the Company in the City of
New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and
the Security Registrar duly executed by, the holder thereof or
his attorney duly authorized in writing, and thereupon one or
more new Registered Securities, of authorized denominations and
for the same aggregate principal amount, having endorsed thereon
a Guarantee executed by the Guarantor, will be issued to the
designated transferee or transferees.
13. Notices. All notices to the holders of Securities will
be published on a Business Day in an Authorized Newspaper (as
defined in the Fiscal Agency Agreement) in New York City and in
London, and, if the Securities are listed on the Luxembourg
Stock Exchange and so long as listed thereon , in Luxembourg or,
if either publication in London or Luxembourg is not practical,
in an Authorized Newspaper in any country in Western Europe. It
is expected that publication in New York City will be made in
The Wall Street Journal (Eastern edition), in London in the
Financial Times and in Luxembourg in the Luxemburger Wort.
Notices shall be deemed to have been given on the date of
publication as aforesaid or, if published on different dates, on
the date of the first such publication. A copy of each such
notice will be mailed by the Fiscal Agent, on behalf of and at
the expense of the Company, by first-class mail to each holder
of a Registered Security at the registered address of such
holder as the same shall appear in the Security Register (as
defined in the Fiscal Agency Agreement) on the day fifteen days
prior to such mailing.
14. Governing Law.
(a) THE FISCAL AGENCY AGREEMENT, THE SECURITIES AND
THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, UNITED
STATES OF AMERICA WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS
RULES.
(b) The Company and the Guarantor have appointed the
Fiscal Agent as its agent upon whom process may be served in any
suit, action or proceeding initially at its office located at 450
West 33rd Street, 15th Floor, New York, New York 10001, with a
copy to the Company at 81 Wyman Street, Waltham, MA 02254-9046,
Attention: President and with a copy to the Guarantor at 81
Wyman Street, Waltham, Massachusetts 02254-9046, Attention:
General Counsel.
A-34PAGE
<PAGE>
15. Authentication. This Security shall not become valid
or obligatory for any purpose until the certificate or
authentication hereon shall have been duly signed by the Fiscal
Agent acting under the Fiscal Agency Agreement.
16. Warranty of the Issuer. Subject to Section 15 hereof,
the Company hereby certifies and warrants that all acts,
conditions and things required to be done and performed and to
have happened precedent to the creation and issuance of this
Security, and to constitute the same legal, valid and binding
obligations of the Company enforceable in accordance with their
terms, have been done and performed and have happened in due and
strict compliance with all applicable laws.
17. Accounting Terms. All accounting terms not otherwise
defined herein shall have the meanings assigned to them in
accordance with generally accepted accounting principles as
applied in the United States.
18. Descriptive Headings. The descriptive headings
appearing in these Terms and Conditions are for convenience of
reference only and shall not alter, limit or define the
provisions hereof.
A-35PAGE
<PAGE>
GUARANTEE OF THERMO ELECTRON CORPORATION
1. FOR VALUE RECEIVED, Thermo Electron Corporation, a
corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Guarantor"), hereby
unconditionally guarantees to the holder of the Security upon
which this Guarantee is endorsed the due and punctual payment of
the principal of and any Additional Amounts (payable in
accordance with Section 2 of such Security) on such Security
when and as the same shall become due and payable, whether at
the stated maturity or by declaration of acceleration, call for
redemption, redemption at the option of the holder thereof or
otherwise, according to the terms of such Security and of the
Fiscal Agency Agreement referred to in the Security upon which
this Guarantee is endorsed. In case of the failure of the
Company referred to in the Security upon which this Guarantee is
endorsed punctually to make any such payment of principal or
such Additional Amounts, if any, the Guarantor hereby agrees to
cause any such payment to be made punctually when and as the
same shall become due and payable, whether at the stated
maturity or by declaration of acceleration, call for redemption,
redemption at the option of the holder thereof or otherwise, and
as if such payment were made by the Company.
2. The Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Security or the Fiscal
Agency Agreement, the absence of any action to enforce the same,
any waiver or consent by the holder of such Security or by the
Fiscal Agent with respect to any provisions thereof or of the
Fiscal Agency Agreement, the recovery of any judgment against
the Company or any action to enforce the same or any other
circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. The Guarantor
hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against
the Company, protest or notice with respect to such Security or
the indebtedness evidenced thereby and all demands whatsoever,
and covenants that this Guarantee will not be discharged except
by complete performance of the obligations contained in such
Security and in this Guarantee.
3. (a) The Guarantor will not merge or consolidate with,
or sell or convey all or substantially all of its assets to, any
other corporation, unless (i) either (A) the Guarantor shall be
the surviving corporation in the case of a merger, (B) the
assets sold or conveyed shall be owned by a corporation which,
immediately following such sale or conveyance, is at least
51%-owned by the Guarantor, provided that such sale or
conveyance does not result in the reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock
of the Guarantor, or (C) (I) the surviving, resulting or
transferee corporation shall expressly assume the due and
A-36PAGE
<PAGE>
punctual performance of all of the covenants and obligations of
the Guarantor under the Guarantees and Fiscal Agency Agreement,
by supplemental agreement reasonably satisfactory to the Fiscal
Agent, and (II) the Fiscal Agent shall have received the
documentation required in the context by the Fiscal Agency
Agreement and (ii) the Guarantor or such successor corporation,
as the case may be, shall not, immediately after such merger,
consolidation, sale or conveyance, be in default in the
performance of any covenants or obligations of the Guarantor
under the Guarantees or the Fiscal Agency Agreement.
(b) Upon any merger, consolidation, sale, conveyance
or assumption as provided in Section 3(a), the successor or
assuming corporation shall succeed to and be substituted for,
and may exercise every right and power of and be subject to all
the obligations of, the Guarantor under the Guarantees and
Fiscal Agency Agreement, with the same effect as if such
successor or assuming corporation had been named as the
Guarantor therein and herein and the Guarantor shall be released
from its obligations as obligor under the Guarantees and Fiscal
Agency Agreement.
4. (a) The Guarantor, for itself, its successors and
assigns, covenants and agrees, and each holder of Securities by
his acceptance thereof, likewise covenants and agrees, that all
obligations of the Guarantor relating to payment of the
principal of and Additional Amounts (pursuant to Section 2 of
the Securities) on each and all of the Securities is hereby
expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment
in full of all Senior Indebtedness of the Guarantor (as defined
below).
"Senior Indebtedness of the Guarantor" or "Senior
Indebtedness" shall mean the principal of, premium, if any, and
interest on and all other amounts due on or with respect to the
following, whether outstanding at the date hereof or hereafter
created or incurred:
(i) indebtedness of the Guarantor for money
borrowed by the Guarantor (excluding the Guarantees, but
including purchase money obligations) whether or not evidenced by
debentures, bonds, notes or other corporate debt securities or
similar instruments issued by the Guarantor (including the
Guarantor's obligations with respect to its 5% Senior Convertible
Debentures due 2001 and its 4-5/8% Senior Convertible Debentures
due 1997); provided, however, that Senior Indebtedness shall not
include (a) the Guarantor's 4-7/8% Convertible Subordinated
Debentures due 1997, the obligations represented by which shall
rank pari passu with the obligations represented hereby in right
of payment, (b) the Guarantor's subordinated guarantee of the
principal, premium, if any, and interest on the 6-5/8%
Convertible Subordinated Debentures due 2001 of Thermo
Instrument Systems Inc., on the 6-1/2% Convertible Subordinated
A-37PAGE
<PAGE>
Debentures due 1997 of Thermo TerraTech Inc., on the
Non-Interest Bearing Convertible Subordinated Debentures due
1997 of Thermo Cardiosystems Inc., on the 3-3/4% Convertible
Subordinated Debentures due 2000 of Thermo Voltek Corp., on the
4-7/8% Convertible Subordinated Debentures due 2000 of Thermo
Remediation Inc., on the 5% Convertible Subordinated Debentures
due 2000 of ThermoQuest Corporation, and on the 5% Convertible
Subordinated Debentures due 2000 of Thermo Optek Corporation,
the obligations represented by which shall rank pari passu with
the obligations represented hereby in right of payment and (c)
the Guarantor's subordinated guarantee of the obligations to
redeem the common stock of ThermoLyte Corporation, the
obligations represented by which shall rank pari passu with the
obligations represented hereby in right of payment;
(ii) obligations to reimburse any bank or other
person in respect of amounts paid under letters of credit;
(iii) leases for real property, equipment or
other assets, which leases are capitalized in the Guarantor's
consolidated financial statements in accordance with generally
accepted accounting principles;
(iv) commitment, standby and other fees due and
payable to financial institutions with respect to credit
facilities available to the Guarantor;
(v) obligations of the Guarantor under interest
rate and currency swaps, floors, caps or other similar
arrangements intended to fix or hedge interest rate obligations
or currency exposure;
(vi) indebtedness secured by any mortgage, pledge,
lien or other encumbrance on property which is owned or held by
the Guarantor subject to such mortgage, pledge, lien or other
encumbrance, whether or not the indebtedness secured thereby
shall have been assumed by the Guarantor;
(vii) obligations of the Guarantor constituting
guarantees of indebtedness of or joint obligations with another
or others which would be included in the preceding clauses (i),
(ii), (iii), (iv), (v) or (vi) (including the Guarantor's
guarantee of the principal, premium, if any, and interest on the
3-3/4% Senior Convertible Debentures due 2000 of Thermo
Instrument Systems Inc.); or
(viii) modifications, renewals, extensions or
refundings of any of the indebtedness, leases, fees or
obligations referred to in the preceding clauses (i), (ii),
(iii), (iv), (v), (vi) and (vii), or debentures, notes or other
evidences of indebtedness issued in exchange therefor;
provided that Senior Indebtedness shall not include any
particular indebtedness, lease, fee, obligation, modification,
A-38PAGE
<PAGE>
renewal, extension, refunding or exchanged security if, under
the express provisions of the instrument creating or evidencing
the same, or pursuant to which the same is outstanding, such
indebtedness, lease, fee or obligation or such modification,
renewal, extension, refunding or exchanged security is stated to
be not superior in right of payment to the Guarantees.
(b) (i) In the event of any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization or
other similar proceedings in connection therewith, relative to
the Guarantor or it its creditors, in their capacity as such
creditors, or to its property, or in the event of any
proceedings for voluntary liquidation, dissolution or other
winding up of the Guarantor, whether or not involving insolvency
or bankruptcy, or in the event of any assignment for the benefit
of creditors of the Guarantor or any marshalling of assets of
the Guarantor, then the holders of Senior Indebtedness of the
Guarantor shall first be entitled to receive payment in full of
the principal of (and premium, if any) and interest, including
interest thereon accruing after the commencement of any such
proceeding, and other amounts due on or with respect to, all
Senior Indebtedness of the Guarantor before the holders of any
of the Securities shall be entitled to receive any payment on
account of the obligations of the Guarantor relating to the
principal of and Additional Amounts (pursuant to Section 2 of
the Securities) on the Securities, and to that end the holders
of Senior Indebtedness of the Guarantor shall be entitled to
receive for application in payment thereof any payment or
distribution of any kind or character, whether in cash, property
or securities, which may be payable or deliverable in any such
proceedings in respect of the obligations of the Guarantor
relating to the Securities, other than securities of the
Guarantor as reorganized or readjusted or securities of the
Guarantor or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Section 4
with respect to the obligations of the Guarantor relating to the
Securities, to the payment of all Senior Indebtedness of the
Guarantor, provided that the rights of the holders of Senior
Indebtedness of the Guarantor are not altered by such
reorganization or readjustment. For the purposes of this
Section 4, no consolidation, merger, conveyance or transfer made
pursuant to the provisions of Section 3 shall be deemed to be a
liquidation, reorganization, dissolution or other winding up of
the Guarantor.
(ii) If under the circumstances set forth in
paragraph (i) of this subsection, and notwithstanding the
provisions thereof, any payment or distribution of assets of the
Guarantor of any kind, whether in cash, property, or securities
(other than securities of the Guarantor as reorganized or
readjusted or securities of the Guarantor or any other
corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinated, at least to
A-39PAGE
<PAGE>
the extent provided in this Section 4 with respect to the
obligations of the Guarantor relating to the Securities to the
payment of all Senior Indebtedness of the Guarantor, provided
that the rights of the holders of Senior Indebtedness of the
Guarantor are not altered by such reorganization or
readjustment), shall be received by the holders of the Securities
in respect of the obligations of the Guarantor before all Senior
Indebtedness of the Guarantor is paid in full, such payment or
distribution shall be paid over to the holders of Senior
Indebtedness of the Guarantor, ratably, for application to the
payment of all Senior Indebtedness of the Guarantor remaining
unpaid until all Senior Indebtedness of the Guarantor shall have
been paid in full, after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness of the
Guarantor.
(iii) Upon any distribution of assets of the
Guarantor referred to in this Section, the holders of Securities
shall be entitled to rely upon any final order or decree of a
court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are
pending, and the holders of Securities shall be entitled to rely
upon a certificate of the liquidating trustee or agent or other
person making any distribution to the holders of Securities for
the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of Senior Indebtedness of the
Guarantor and other indebtedness of the Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Section.
(c) (i) Upon the maturity of any Senior Indebtedness
of the Guarantor by lapse of time, acceleration or otherwise, all
principal thereof (and premium, if any) and interest due
thereon, including interest thereon accruing after the
commencement of any proceeding of the type referred to in
paragraph (i) of Section 4(b) above, and all other amounts due
on or with respect thereto, shall first be paid in full, or such
payment duly provided for in cash, before any payment, directly
or indirectly, is made on account of the obligations of the
Guarantor relating to the principal of and Additional Amounts
(pursuant to Section 2 of the Securities) on the Securities.
(ii) Upon the happening of an event of default
with respect to any Senior Indebtedness of the Guarantor, as
defined therein or in the instrument under which it is
outstanding, permitting the holders to accelerate the maturity
thereof, then, unless and until such event of default shall have
been cured or waived or shall have ceased to exist, no payment
shall be made by the Guarantor, directly or indirectly, on
account of the obligations of the Guarantor relating to the
principal of and Additional Amounts (pursuant to Section 2 of the
Securities) on the Securities.
A-40PAGE
<PAGE>
(d) In case cash, securities or other property
otherwise payable or deliverable to the holders of the Securities
on account of the Guarantees shall have been applied, pursuant to
Section 4(b) or (c), to the payment of Senior Indebtedness of
the Guarantor, then, upon the payment in full of all Senior
Indebtedness of the Guarantor, the holders of the Securities and
coupons shall be subrogated to any rights of any holders of
Senior Indebtedness of the Guarantor, to receive any further
payments or distributions applicable to Senior Indebtedness of
the Guarantor until the obligations of the Guarantor in respect
of the Guarantees shall have been discharged in full, and such
payments or distributions received by the holders of the
Securities, by reason of such subrogation, of cash, securities
or other property which otherwise would be paid or distributed
to the holders of Senior Indebtedness of the Guarantor, shall,
as between the Guarantor and its creditors other than the
holders of Senior Indebtedness of the Guarantor, on the one
hand, and the holders of the Securities on account of the
Guarantees, on the other hand, be deemed to be a payment by the
Guarantor on account of Senior Indebtedness of the Guarantor and
not on account of the Securities.
(e) No present or future holder of any Senior
Indebtedness of the Guarantor shall be prejudiced in any way in
the right to enforce the subordination of the Guarantees by any
act or failure to act on the part of the Guarantor. The
provisions of this Section 4 are solely for the purpose of
defining the relative rights of the holders of Senior
Indebtedness of the Guarantor, on the one hand, and the holders
of the Securities on account of the Guarantees, on the other
hand, against the Guarantor and its assets, and nothing contained
in this Section 4 shall impair, as between the Guarantor and the
holder of any Security, the obligation of the Guarantor, which is
unconditional and absolute, to perform in accordance with the
terms of its Guarantees, or prevent the holder of any Security,
upon default hereunder or under such Security , from exercising
all rights, powers and remedies otherwise provided herein or
therein or by applicable law, all subject to the rights of the
holders of Senior Indebtedness of the Guarantor under this
Section 4 to receive cash, property or securities otherwise
payable or deliverable to the holders of the Securities on
account of the Guarantees.
(f) Nothing contained in this Section 4 or in any
Guarantees shall prevent at any time, except under the conditions
described in Sections 4(b) and (c) hereof or during the pendency
of any dissolution, winding up, liquidation or reorganization
proceedings therein referred to, the Guarantor from performing
its obligations under the Guarantees.
5. The Guarantor shall be subrogated to all rights of the
holders of the Securities against the Company in respect of any
A-41PAGE
<PAGE>
amounts paid by the Guarantor pursuant to the provisions of this
Guarantee; provided, however, that the Guarantor shall not be
entitled to enforce or to receive any payments arising out of,
or based upon, such right of subrogation until the principal of
and Additional Amounts (pursuant to Section 2 of the Securities,
if any, on) all of the Securities shall have been paid in full.
6. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS,
UNITED STATES OF AMERICA WITHOUT GIVING EFFECT TO ITS CONFLICTS
OF LAWS RULES.
7. All terms used in this Guarantee which are defined in
the Fiscal Agency Agreement shall have the meanings assigned to
them in the Fiscal Agency Agreement.
8. Subject to the next following paragraph, the Guarantor
hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened
precedent to the creation and issuance of this Guarantee and to
constitute the same a legal, valid and binding obligations of
the Guarantor enforceable in accordance with their terms, have
been done and performed and have happened in due and strict
compliance with all applicable laws.
9. This Guarantee shall not become valid or obligatory for
any purpose until the certificate of authentication on the
Security upon which this Guarantee is endorsed shall have been
duly signed by the Fiscal Agent acting under the Fiscal Agency
Agreement.
A-42PAGE
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee
to be duly executed in its corporate name by the manual or
facsimile signature of a duly authorized officer.
Dated: March 14, 1996
THERMO ELECTRON CORPORATION
By: _______________________
Name: _____________________
Title: ____________________
Attest:
_________________________
A-43PAGE
<PAGE>
TRANSFER NOTICE
Only if a Registered Security is transferred:
FOR VALUE RECEIVED, the undersigned Holder hereby sell(s),
assign(s) and transfer(s) unto __________________________________
_________________________________________________________________
_______________________________________ whose taxpayer
identification number is __________________ and whose address
including postal/zip code is ____________________________________
the within Security and all rights thereunder, hereby irrevocably
constituting and appointing _____________________________________
attorney-in-fact to transfer said Security on the books of the
Fiscal Agent with full power of substitution in the premises.
In connection with the transfer of this Security, the
undersigned Holder certifies that the transfer is being made
pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act of 1933
and, in connection with which transfer the Company has received,
if requested, an opinion of counsel (satisfactory to it in form
and substance) to the effect that the transfer is being made
pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act of 1933.
Dated: ______________ Name: ____________________
By: ______________________
Title: ___________________
NOTICE: The signature of the Holder to this
assignment must correspond with the name as
written upon the face of the within
instrument in every particular, without
enlargement or any change whatsoever.
SIGNATURE GUARANTEED
_________________________
A-44PAGE
<PAGE>
CONVERSION NOTICE
If Bearer Security of denomination U.S. $1,000:
The undersigned holder of this Security hereby (i)
irrevocably exercises the option to convert this Security into
shares of Common Stock of Thermo Ecotek Corporation (the
"Company") in accordance with the terms of this Security, and
(ii) directs that such shares be registered in the name of and
delivered, together with a check in payment for any fractional
share, to the undersigned unless a different name has been
indicated below. If shares are to be registered in the name of a
person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
Dated: __________________
_________________________
Signature
[MUST BE GUARANTEED IF STOCK IS TO BE ISSUED
IN A NAME OTHER THAN THE REGISTERED
HOLDER OF THE SECURITY]
If shares are to be registered in the
name of and delivered to a person
other than the holder, please print
such person's name and address and,
if this is a Restricted Security,
complete the Transfer Notice:
__________________________
__________________________
__________________________
HOLDER
Please print name and address of holder:
__________________________
__________________________
__________________________
A-45PAGE
<PAGE>
CONVERSION NOTICE
If (i) Registered Security or (ii) Bearer Security of
denomination U.S. $10,000:
The undersigned holder of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof
(which is U.S. $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of Thermo Ecotek
Corporation (the "Company") in accordance with the terms of this
Security, and (ii) directs that such shares, together with a
check in payment for any fractional share and any Securities
representing any unconverted principal amount hereof, be
delivered to and be registered (if a Registered Security) in the
name of the undersigned unless a different name has been
indicated below. If shares or Securities are to be registered
in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect
thereto.
________________________
Signature
[MUST BE GUARANTEED IF STOCK IS TO
BE ISSUED IN A NAME OTHER THAN
THE REGISTERED HOLDER OF THE SECURITY]
Dated: ___________________
If shares or Securities are to be registered in
the name of a Person other than the
registered holder, please print such person's
name and address and, if this is a Restricted
Security, complete Transfer Notice:
________________________
________________________
________________________
HOLDER
Please print name and address of holder:
_________________________________
_________________________________
_________________________________
A-46PAGE
<PAGE>
If only a portion of the Securities is to
be converted, please indicate:
1. Principal Amount to be converted:
U.S.$ ________
2. Kind, amount and denomination of
Securities representing unconverted
principal amount to be issued:
Bearer U.S. $_____________
(U.S. $1,000 or $10,000)
Registered U.S. $___________
Denominations: U.S. $__________
(U.S. $1,000 or an integral multiple thereof)
Registered Securities are not exchangeable
for Bearer Securities.
A-47PAGE
<PAGE>
REDEMPTION NOTICE UNDER SECTION 3(d)
If Bearer Security of denomination U.S. $ 1,000:
The undersigned holder of this Security hereby requests and
instructs the Company to redeem this Security in accordance with
the terms of Section 3(d) of this Security and directs that a
check in payment of the redemption amount be delivered to the
undersigned unless a different name has been indicated below.
The undersigned understands that this request can be revoked by
delivering written notice to the Paying Agent on or before the
Holder Redemption Date, together with the undersigned's
non-transferable receipt for such Security.
Dated: _______________________
_____________________________________
Signature
[MUST BE GUARANTEED IF CHECK IS TO
BE MADE PAYABLE TO A NAME OTHER
THAN THE REGISTERED HOLDER OF THE SECURITY]
If a check in payment of the
redemption amount is to be delivered
to a person other than the holder,
please print such person's name and
address:
_________________________________
_________________________________
_________________________________
HOLDER
Please print name and address of holder:
_________________________________
_________________________________
_________________________________
A-48PAGE
<PAGE>
REDEMPTION NOTICE UNDER SECTION 3(d)
If (i) Registered Security or (ii) Bearer Security of
denomination U.S. $10,000:
The undersigned holder of this Security hereby requests and
instructs the Company to redeem this Security or portion hereof
(which is U.S. $1,000 or an integral multiple thereof) in
accordance with the terms of Section 3(d) of this Security, and
directs that a check in payment of the redemption amount be
delivered to, and any Securities representing any unredeemed
principal amount hereof be delivered to and be registered in the
name of, the undersigned unless a different name has been
indicated below. If Securities are to be registered in the name
of a person other than the undersigned, the undersigned will pay
all transfer taxes payable with respect thereto. The
undersigned understands that this request can be revoked by
delivering written notice to the Paying Agent on or before the
Holder Redemption Date, together with the undersigned's
non-transferable receipt for such Security.
Dated:
___________________________
Signature
[MUST BE GUARANTEED IF CHECK IS TO
BE MADE PAYABLE TO A NAME OTHER
THAN THE REGISTERED HOLDER OF THE
SECURITY]
If Securities are to be
registered in the name of, HOLDER
or a check in payment of the Please print name and address of
redemption amount is to be holder:
delivered to, a person other
than the holder, please
print such person's name ________________________
and address, and if this is
a Restricted Security and any ________________________
Securities representing any
unredeemed principal amount ________________________
hereof are to be registered
in the name of a person other
than the undersigned,
complete Transfer Notice.
_____________________________
_____________________________
_____________________________
A-49PAGE
<PAGE>
1. Principal Amount to redeemed: U.S. $
2. Kind, amount and denomination of
Securities representing unredeemed
principal amount to be issued:
Bearer U.S. $_____________
Denominations: U.S. $_________
(U.S. $1,000 or $10,000)
Registered U.S. $___________
Denominations: U.S. $__________
(U.S. $1,000 or an integral
multiple thereof)
Registered Securities are not
exchangeable for Bearer
Securities.
A-50PAGE
<PAGE>
EXHIBIT B
(FORM OF REGULATION S GLOBAL SECURITY)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES OF AMERICA, ITS TERRITORIES, ITS POSSESSION AND OTHER
AREAS SUBJECT TO ITS JURISDICTION (THE "UNITED STATES" ) OR TO
ANY CITIZEN, NATIONAL RESIDENT OF THE UNITED STATES OR TO ANY
CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN
OR UNDER THE LAWS OF THE UNITED STATES OR ANY POLITICAL
SUBDIVISION THEREOF, OR TO ANY ESTATE OR TRUST THE INCOME OF
WHICH IS SUBJECT TO UNITED STATES FEDERAL INCOME TAXATION
REGARDLESS OF ITS SOURCE OR TO ANY OTHER PERSON OR ENTITY DEEMED
A U.S. PERSON UNDER REGULATIONS UNDER THE SECURITIES ACT
("UNITED STATES PERSON").
ANY UNITED STATES PERSON WHO HOLDS THIS SECURITY WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,
INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a)
OF THE UNITED STATES INTERNAL REVENUE CODE.
THIS SECURITY IS A TEMPORARY GLOBAL SECURITY, WITHOUT
CONVERSION RIGHTS, EXCHANGEABLE FOR DEFINITIVE BEARER SECURITIES
OR REGISTERED SECURITIES. THE RIGHTS ATTACHING TO THIS GLOBAL
SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR DEFINITIVE SECURITIES, ARE AS SPECIFIED IN THE
FISCAL AGENCY AGREEMENT (AS DEFINED HEREIN).
B-1PAGE
<PAGE>
THERMO ECOTEK CORPORATION
(Incorporated in the State of Delaware)
Non-Interest Bearing Convertible Subordinated Debenture Due 2001
Guaranteed on a Subordinated Basis By
THERMO ELECTRON CORPORATION
(Incorporated in the State of Delaware)
TEMPORARY GLOBAL DEBENTURE
THERMO ECOTEK CORPORATION, a corporation duly incorporated
and existing under the laws of the State of Delaware (the
"Company"), for value received, hereby promises to pay to bearer
upon presentation and surrender of this Global Security the
principal sum of $_______ United States Dollars on March 15,
2001.
This Global Security is one of a duly authorized issue of
Securities of the Company designated as specified in the title
hereof, issued and to be issued under the Fiscal Agency
Agreement dated as of March 14, 1996 (the "Fiscal Agency
Agreement") among the Company, Thermo Electron Corporation, a
corporation duly incorporated and existing under the laws of the
State of Delaware, as guarantor and Chemical Bank, as fiscal
agent (the "Fiscal Agent", which term includes any successor
fiscal agent under the Fiscal Agency Agreement). This Global
Security is a temporary security and is exchangeable in whole or
from time to time in part without charge upon request of the
holder hereof for definitive Securities in bearer form or in
registered form, of authorized denominations, (a) not earlier
than the day following expiration of the 40-day period that
begins on the date hereof and (b) as promptly as practicable
following presentation of certification, in the forms set forth
as Exhibits C and F of the Fiscal Agency Agreement for such
purpose, that the beneficial owner or owners of this Global
Security (or, if such exchange is only for a part of this Global
Security, of such part) are not United States Persons or other
persons who have purchased such Debenture for resale to United
States Persons. Definitive Securities in bearer form to be
delivered in exchange for any part of this Global Security shall
be delivered only outside of the United States, its territories
and its possessions. Upon any exchange of a part of this Global
Security for definitive Securities, the portion of the principal
amount hereof so exchanged shall be endorsed by the Fiscal Agent
or its agents on the Schedule of Exchanges hereto, and the
principal amount hereof shall be reduced for all purposes by the
B-2PAGE
<PAGE>
amount so exchanged.
Until exchanged in full for definitive Securities, this
Global Security shall in all respects be entitled to the same
benefits under, and subject to the same terms and conditions of,
the Fiscal Agency Agreement as definitive Securities
authenticated and delivered thereunder, except that neither the
holder hereof nor the beneficial owners of this Global Security
shall be entitled to convert this Global Security into shares of
Common Stock of the Company or any other security, cash or other
property.
THIS GLOBAL SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS,
UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO ITS CONFLICTS
OF LAW RULES.
All terms used in this Global Security which are defined in
the Fiscal Agency Agreement shall have the meanings assigned to
them in the Fiscal Agency Agreement.
Unless the certificate of authentication hereon has been
manually executed by an authorized signatory of the Fiscal
Agent, this Global Security shall not be entitled to any benefit
under the Fiscal Agency Agreement or valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this Global
Security to be duly executed in its corporate name by its duly
authorized signatory under its corporate seal.
Dated: March 14, 1996
THERMO ECOTEK CORPORATION
By: _____________________
Name: ___________________
Title: __________________
Attest:
_________________________
B-3PAGE
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-
mentioned Fiscal Agency Agreement.
CHEMICAL BANK
as Fiscal Agent
By: _____________________
Authorized Officer
SCHEDULE OF EXCHANGES
Principal Remaining
amount principal Notation
exchanged for amount made on
Date definitive following behalf of the
made Securities such exchange Fiscal Agent
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
______ ___________ __________ ______________
_________________________________________________________________
B-4PAGE
<PAGE>
GUARANTEE OF THERMO ELECTRON CORPORATION
1. FOR VALUE RECEIVED, Thermo Electron Corporation, a
corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Guarantor"), hereby
unconditionally guarantees to the holder of the Security upon
which this Guarantee is endorsed the due and punctual payment of
the principal of and any Additional Amounts (payable in
accordance with Section 2 of such Security) on such Security
when and as the same shall become due and payable, whether at
the stated maturity or by declaration of acceleration, call for
redemption, redemption at the option of the holder thereof or
otherwise, according to the terms of such Security and of the
Fiscal Agency Agreement referred to in the Security upon which
this Guarantee is endorsed. In case of the failure of the
Company referred to in the Security upon which this Guarantee is
endorsed punctually to make any such payment of principal or
such Additional Amounts, if any, the Guarantor hereby agrees to
cause any such payment to be made punctually when and as the
same shall become due and payable, whether at the stated
maturity or by declaration of acceleration, call for redemption,
redemption at the option of the holder thereof or otherwise, and
as if such payment were made by the Company.
2. The Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Security or the Fiscal
Agency Agreement, the absence of any action to enforce the same,
any waiver or consent by the holder of such Security or by the
Fiscal Agent with respect to any provisions thereof or of the
Fiscal Agency Agreement, the recovery of any judgment against
the Company or any action to enforce the same or any other
circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. The Guarantor
hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against
the Company, protest or notice with respect to such Security or
the indebtedness evidenced thereby and all demands whatsoever,
and covenants that this Guarantee will not be discharged except
by complete performance of the obligations contained in such
Security and in this Guarantee.
3. (a) The Guarantor will not merge or consolidate with,
or sell or convey all or substantially all of its assets to, any
other corporation, unless (i) either (A) the Guarantor shall be
the surviving corporation in the case of a merger, (B) the
assets sold or conveyed shall be owned by a corporation which,
immediately following such sale or conveyance, is at least
51%-owned by the Guarantor, provided that such sale or
B-5PAGE
<PAGE>
conveyance does not result in the reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock
of the Guarantor, or (C) (I) the surviving, resulting or
transferee corporation shall expressly assume the due and
punctual performance of all of the covenants and obligations of
the Guarantor under the Guarantees and Fiscal Agency Agreement,
by supplemental agreement reasonably satisfactory to the Fiscal
Agent, and (II) the Fiscal Agent shall have received the
documentation required in the context by the Fiscal Agency
Agreement and (ii) the Guarantor or such successor corporation,
as the case may be, shall not, immediately after such merger,
consolidation, sale or conveyance, be in default in the
performance of any covenants or obligations of the Guarantor
under the Guarantees or the Fiscal Agency Agreement.
(b) Upon any merger, consolidation, sale, conveyance
or assumption as provided in Section 3(a), the successor or
assuming corporation shall succeed to and be substituted for,
and may exercise every right and power of and be subject to all
the obligations of, the Guarantor under the Guarantees and
Fiscal Agency Agreement, with the same effect as if such
successor or assuming corporation had been named as the
Guarantor therein and herein and the Guarantor shall be released
from its obligations as obligor under the Guarantees and Fiscal
Agency Agreement.
4. (a) The Guarantor, for itself, its successors and
assigns, covenants and agrees, and each holder of Securities by
his acceptance thereof, likewise covenants and agrees, that all
obligations of the Guarantor relating to payment of the
principal of and Additional Amounts (pursuant to Section 2 of
the Securities) on each and all of the Securities is hereby
expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment
in full of all Senior Indebtedness of the Guarantor (as defined
below).
"Senior Indebtedness of the Guarantor" or "Senior
Indebtedness" shall mean the principal of, premium, if any, and
interest on and all other amounts due on or with respect to the
following, whether outstanding at the date hereof or hereafter
created or incurred:
(i) indebtedness of the Guarantor for money
borrowed by the Guarantor (excluding the Guarantees, but
including purchase money obligations) whether or not evidenced by
debentures, bonds, notes or other corporate debt securities or
similar instruments issued by the Guarantor (including the
Guarantor's obligations with respect to its 5% Senior Convertible
Debentures due 2001 and its 4-5/8% Senior Convertible Debentures
due 1997); provided, however, that Senior Indebtedness shall not
include (a) the Guarantor's 4-7/8% Convertible Subordinated
Debentures due 1997, the obligations represented by which shall
B-6PAGE
<PAGE>
rank pari passu with the obligations represented hereby in right
of payment, (b) the Guarantor's subordinated guarantee of the
principal, premium, if any, and interest on the 6-5/8%
Convertible Subordinated Debentures due 2001 of Thermo
Instrument Systems Inc., on the 6-1/2% Convertible Subordinated
Debentures due 1997 of Thermo TerraTech Inc., on the
Non-Interest Bearing Convertible Subordinated Debentures due
1997 of Thermo Cardiosystems Inc., on the 3-3/4% Convertible
Subordinated Debentures due 2000 of Thermo Voltek Corp., on the
4-7/8% Convertible Subordinated Debentures due 2000 of Thermo
Remediation Inc., on the 5% Convertible Subordinated Debentures
due 2000 of ThermoQuest Corporation, and on the 5% Convertible
Subordinated Debentures due 2000 of Thermo Optek Corporation,
the obligations represented by which shall rank pari passu with
the obligations represented hereby in right of payment and (c)
the Guarantor's subordinated guarantee of the obligations to
redeem the common stock of ThermoLyte Corporation, the
obligations represented by which shall rank pari passu with the
obligations represented hereby in right of payment;
(ii) obligations to reimburse any bank or other
person in respect of amounts paid under letters of credit;
(iii) leases for real property, equipment or
other assets, which leases are capitalized in the Guarantor's
consolidated financial statements in accordance with generally
accepted accounting principles;
(iv) commitment, standby and other fees due and
payable to financial institutions with respect to credit
facilities available to the Guarantor;
(v) obligations of the Guarantor under interest
rate and currency swaps, floors, caps or other similar
arrangements intended to fix or hedge interest rate obligations
or currency exposure;
(vi) indebtedness secured by any mortgage, pledge,
lien or other encumbrance on property which is owned or held by
the Guarantor subject to such mortgage, pledge, lien or other
encumbrance, whether or not the indebtedness secured thereby
shall have been assumed by the Guarantor;
(vii) obligations of the Guarantor constituting
guarantees of indebtedness of or joint obligations with another
or others which would be included in the preceding clauses (i),
(ii), (iii), (iv), (v) or (vi) (including the Guarantor's
guarantee of the principal, premium, if any, and interest on the
3-3/4% Senior Convertible Debentures due 2000 of Thermo
Instrument Systems Inc.); or
(viii) modifications, renewals, extensions or
refundings of any of the indebtedness, leases, fees or
obligations referred to in the preceding clauses (i), (ii),
B-7PAGE
<PAGE>
(iii), (iv), (v), (vi) and (vii), or debentures, notes or other
evidences of indebtedness issued in exchange therefor;
provided that Senior Indebtedness shall not include any
particular indebtedness, lease, fee, obligation, modification,
renewal, extension, refunding or exchanged security if, under
the express provisions of the instrument creating or evidencing
the same, or pursuant to which the same is outstanding, such
indebtedness, lease, fee or obligation or such modification,
renewal, extension, refunding or exchanged security is stated to
be not superior in right of payment to the Guarantees.
(b) (i) In the event of any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization or
other similar proceedings in connection therewith, relative to
the Guarantor or it its creditors, in their capacity as such
creditors, or to its property, or in the event of any
proceedings for voluntary liquidation, dissolution or other
winding up of the Guarantor, whether or not involving insolvency
or bankruptcy, or in the event of any assignment for the benefit
of creditors of the Guarantor or any marshalling of assets of
the Guarantor, then the holders of Senior Indebtedness of the
Guarantor shall first be entitled to receive payment in full of
the principal of (and premium, if any) and interest, including
interest thereon accruing after the commencement of any such
proceeding, and other amounts due on or with respect to, all
Senior Indebtedness of the Guarantor before the holders of any
of the Securities shall be entitled to receive any payment on
account of the obligations of the Guarantor relating to the
principal of and Additional Amounts (pursuant to Section 2 of
the Securities) on the Securities, and to that end the holders
of Senior Indebtedness of the Guarantor shall be entitled to
receive for application in payment thereof any payment or
distribution of any kind or character, whether in cash, property
or securities, which may be payable or deliverable in any such
proceedings in respect of the obligations of the Guarantor
relating to the Securities, other than securities of the
Guarantor as reorganized or readjusted or securities of the
Guarantor or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Section 4
with respect to the obligations of the Guarantor relating to the
Securities, to the payment of all Senior Indebtedness of the
Guarantor, provided that the rights of the holders of Senior
Indebtedness of the Guarantor are not altered by such
reorganization or readjustment. For the purposes of this
Section 4, no consolidation, merger, conveyance or transfer made
pursuant to the provisions of Section 3 shall be deemed to be a
liquidation, reorganization, dissolution or other winding up of
the Guarantor.
(ii) If under the circumstances set forth in
paragraph (i) of this subsection, and notwithstanding the
B-8PAGE
<PAGE>
provisions thereof, any payment or distribution of assets of the
Guarantor of any kind, whether in cash, property, or securities
(other than securities of the Guarantor as reorganized or
readjusted or securities of the Guarantor or any other
corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinated, at least to
the extent provided in this Section 4 with respect to the
obligations of the Guarantor relating to the Securities, to the
payment of all Senior Indebtedness of the Guarantor, provided
that the rights of the holders of Senior Indebtedness of the
Guarantor are not altered by such reorganization or
readjustment), shall be received by the holders of the Securities
in respect of the obligations of the Guarantor before all Senior
Indebtedness of the Guarantor is paid in full, such payment or
distribution shall be paid over to the holders of Senior
Indebtedness of the Guarantor, ratably, for application to the
payment of all Senior Indebtedness of the Guarantor remaining
unpaid until all Senior Indebtedness of the Guarantor shall have
been paid in full, after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness of the
Guarantor.
(iii) Upon any distribution of assets of the
Guarantor referred to in this Section, the holders of Securities
shall be entitled to rely upon any final order or decree of a
court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are
pending, and the holders of Securities shall be entitled to rely
upon a certificate of the liquidating trustee or agent or other
person making any distribution to the holders of Securities for
the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of Senior Indebtedness of the
Guarantor and other indebtedness of the Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Section.
(c) (i) Upon the maturity of any Senior Indebtedness
of the Guarantor by lapse of time, acceleration or otherwise, all
principal thereof (and premium, if any) and interest due
thereon, including interest thereon accruing after the
commencement of any proceeding of the type referred to in
paragraph (i) of Section 4(b) above, and all other amounts due
on or with respect thereto, shall first be paid in full, or such
payment duly provided for in cash, before any payment, directly
or indirectly, is made on account of the obligations of the
Guarantor relating to the principal of and Additional Amounts
(pursuant to Section 2 of the Securities) on the Securities.
(ii) Upon the happening of an event of default
with respect to any Senior Indebtedness of the Guarantor, as
defined therein or in the instrument under which it is
outstanding, permitting the holders to accelerate the maturity
thereof, then, unless and until such event of default shall have
B-9PAGE
<PAGE>
been cured or waived or shall have ceased to exist, no payment
shall be made by the Guarantor, directly or indirectly, on
account of the obligations of the Guarantor relating to the
principal of and Additional Amounts (pursuant to Section 2 of the
Securities) on the Securities.
(d) In case cash, securities or other property
otherwise payable or deliverable to the holders of the Securities
on account of the Guarantees shall have been applied, pursuant to
Section 4(b) or (c), to the payment of Senior Indebtedness of
the Guarantor, then, upon the payment in full of all Senior
Indebtedness of the Guarantor, the holders of the Securities and
coupons shall be subrogated to any rights of any holders of
Senior Indebtedness of the Guarantor, to receive any further
payments or distributions applicable to Senior Indebtedness of
the Guarantor until the obligations of the Guarantor in respect
of the Guarantees shall have been discharged in full, and such
payments or distributions received by the holders of the
Securities, by reason of such subrogation, of cash, securities
or other property which otherwise would be paid or distributed
to the holders of Senior Indebtedness of the Guarantor, shall,
as between the Guarantor and its creditors other than the
holders of Senior Indebtedness of the Guarantor, on the one
hand, and the holders of the Securities on account of the
Guarantees, on the other hand, be deemed to be a payment by the
Guarantor on account of Senior Indebtedness of the Guarantor and
not on account of the Securities.
(e) No present or future holder of any Senior
Indebtedness of the Guarantor shall be prejudiced in any way in
the right to enforce the subordination of the Guarantees by any
act or failure to act on the part of the Guarantor. The
provisions of this Section 4 are solely for the purpose of
defining the relative rights of the holders of Senior
Indebtedness of the Guarantor, on the one hand, and the holders
of the Securities on account of the Guarantees, on the other
hand, against the Guarantor and its assets, and nothing contained
in this Section 4 shall impair, as between the Guarantor and the
holder of any Security, the obligation of the Guarantor, which is
unconditional and absolute, to perform in accordance with the
terms of its Guarantees, or prevent the holder of any Security,
upon default hereunder or under such Security, from exercising
all rights, powers and remedies otherwise provided herein or
therein or by applicable law, all subject to the rights of the
holders of Senior Indebtedness of the Guarantor under this
Section 4 to receive cash, property or securities otherwise
payable or deliverable to the holders of the Securities on
account of the Guarantees.
(f) Nothing contained in this Section 4 or in any
Guarantees shall prevent at any time, except under the conditions
described in Sections 4(b) and (c) hereof or during the pendency
of any dissolution, winding up, liquidation or reorganization
B-10PAGE
<PAGE>
proceedings therein referred to, the Guarantor from performing
its obligations under the Guarantees.
5. The Guarantor shall be subrogated to all rights of the
holders of the Securities against the Company in respect of any
amounts paid by the Guarantor pursuant to the provisions of this
Guarantee; provided, however, that the Guarantor shall not be
entitled to enforce or to receive any payments arising out of,
or based upon, such right of subrogation until the principal of
and Additional Amounts (pursuant to Section 2 of the Securities,
if any, on) all of the Securities shall have been paid in full.
6. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS,
UNITED STATES OF AMERICA WITHOUT GIVING EFFECT TO ITS CONFLICTS
OF LAWS RULES.
7. All terms used in this Guarantee which are defined in
the Fiscal Agency Agreement shall have the meanings assigned to
them in the Fiscal Agency Agreement.
8. Subject to the next following paragraph, the Guarantor
hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened
precedent to the creation and issuance of this Guarantee and to
constitute the same a legal, valid and binding obligations of
the Guarantor enforceable in accordance with their terms, have
been done and performed and have happened in due and strict
compliance with all applicable laws.
9. This Guarantee shall not become valid or obligatory for
any purpose until the certificate of authentication on the
Security upon which this Guarantee is endorsed shall have been
duly signed by the Fiscal Agent acting under the Fiscal Agency
Agreement.
B-11PAGE
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee
to be duly executed in its corporate name by the manual or
facsimile signature of a duly authorized officer.
Dated: March 14, 1996
THERMO ELECTRON CORPORATION
By: _________________________
Name: _______________________
Title: ______________________
Attest:
_________________________
B-12PAGE
<PAGE>
EXHIBIT C
Form of Certificate to be Given by
The Euroclear Operator and Cedel Bank, societe anonyme
CERTIFICATION
U.S. $_____________
THERMO ECOTEK CORPORATION
Non-Interest Bearing Convertible Subordinated Debentures due
March 15, 2001
(the "Securities")
This is to certify that, based solely on certifications we
have received in writing, by tested telex or electronic
transmission from member organizations appearing in our records
as persons being entitled to a portion of the principal amount
set forth below (our "Member Organizations"), substantially to
the effect set forth in the Fiscal Agency Agreement relating to
the above-captioned Securities, as of the date hereof, U.S.
$_______________ aggregate principal amount of the
above-captioned Securities is owned by persons that are not
citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the
income of which is subject to United States Federal income
taxation regardless of its source or any other person deemed a
"United States person" or a "U.S. person" under the Internal
Revenue Code of 1986, as amended, or Regulation S under the U.S.
Securities Act of 1933, as amended ("United States persons").
The following denominations of Bearer Securities are
requested:
No. of Certificates Amount
$1,000 Denomination ________________ = $________________
$10,000 Denomination ________________ = $________________
Total Requested ________________ = $________________
C-1PAGE
<PAGE>
We further certify (i) that we are not making available
herewith for exchange any portion of the Regulation S Global
Security excepted in such certifications and (ii) that as of the
date hereof we have not received any notification from any of
our Member Organizations to the effect that the statements made
by such Member Organization with respect to any portion of the
part submitted herewith for exchange are no longer true and
cannot be relied upon as of the date hereof.
We further certify that under the rules of the undersigned
organization, each Member Organization has agreed that any
electronic certification shall have the effect of a signed
certification and that all certifications shall be retained for
at least four years in compliance with the rules set forth under
Treas. Reg. Section 1. 163-5 (c)(2)(i)(D)(3)(ii).
We understand that this certification is required in
connection with certain tax laws and, if applicable, certain
securities laws of the United States. In connection therewith,
if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or
would be relevant, we irrevocably authorize you to produce this
certification to any interested party in such proceedings.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and
its territories and possessions, including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands. As used herein, "restricted period"
means the period described in Section 1. 163-5(c)(2)(i)(D)(7) of
the Treasury Regulations and "financial institution" means the
persons described in Section 1. 165-12(c)(1)(v) of the Treasury
Regulations.
Dated: ____________________, 1996
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, BRUSSELS OFFICE, AS
OPERATOR OF THE EUROCLEAR SYSTEM]
[CEDEL BANK, SOCIETE ANONYME]
By: _____________________________
C-2PAGE
<PAGE>
EXHIBIT D
Form of Certificate of Beneficial Ownership for
Bearer Securities to be Provided to the
Euroclear Operator or to Cedel Bank, societe anonyme
CERTIFICATION
U.S. $____________
THERMO ECOTEK CORPORATION
Non-Interest Bearing Convertible Subordinated Debentures
due March 15, 2001
(the "Securities")
This is to certify that as of the date hereof and except as
set forth below, $___________ aggregate principal amount of the
above-mentioned Securities held by you for our account are owned
by or on behalf of, (a) a person (other than a financial
institution for purposes of resale during the restricted period)
who is not a United States person; or (b) a United States person
(other than a financial institution for purposes of resale
during the restricted period) who is (i) a foreign branch of a
United States financial institution or (ii) a United States
person acquiring such Securities through the foreign branch of a
United States financial institution and who for purposes of this
certification holds such Securities through such financial
institution on the date hereof, and, in the case of either (i)
or (ii), such United States financial institution has agreed,
for the benefit of the Company, to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as from time to time amended, and
the regulations thereunder; or (c) a financial institution for
purposes of resale during the restricted period and such
financial institution has not acquired such Securities for
purposes of resale directly or indirectly to a United States
person or to a person within the United States or its
possessions; and the undersigned has obtained a similar
certificate from its member organizations on which this
certificate is based; provided, however, that if the undersigned
has actual knowledge that the information contained in such a
certificate is false (and, absent documentary evidence that the
beneficial owner of such Security is not a United states person,
D-1PAGE
<PAGE>
it will be deemed to have actual knowledge that such certificate
is false if it has a United States address for such beneficial
owner, other than a financial institution described above), the
undersigned will not deliver a Security in temporary or
definitive bearer form to the person who signed such certificate
notwithstanding the delivery of such certificate to the
undersigned.
No. of Certificates Amount
$1,000 Denomination ________________ = $________________
$10,000 Denomination ________________ = $________________
Total Requested ________________ = $________________
As used herein, (i) "United States person" means a citizen
or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the
United States and an estate or trust the income of which is
subject to United States Federal income taxation regardless of
its source or any other person deemed a "United States person"
or a "U.S. person" under the Internal Revenue Code of 1986, as
amended, or Regulation S under the U.S. Securities Act of 1933,
as amended, (ii) "United States" means the United States of
America (including the States and the District of Columbia) and
its territories and possessions, including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands, (iii) "restricted period" means the
period described in Section 1.163-5(c)(2)(i)(D)(7) of the
Treasury Regulations, and (iv) "financial institution" means the
persons described in Section 1. 165-12(c)(1)(v) of the United
States Treasury Regulations.
We undertake to advise you promptly by tested telex on or
prior to the date on which you intend to submit your
certification relating to the Securities held by you for our
account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in
the absence of any such notification it may be assumed that this
certification applies as of such date.
This certification excepts and does not relate to
U.S. $_______________ of such interest in the above Securities in
respect of which we are not able to certify and as to which we
understand exchange and delivery of definitive Securities cannot
be made until we do so certify.
We understand that this certification is required in
connection with certain tax laws and, if applicable, certain
securities laws of the United States. In connection therewith,
if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or
would be relevant, we irrevocably authorize you to produce this
D-2PAGE
<PAGE>
certification or a copy hereof to any interested party in such
proceedings.
Dated: ___________________, 1996
[Name]
By: _________________________
Signature
As, or as agent for, the
beneficial owner[s] of
the Securities to which
this certificate relates.
D-3PAGE
<PAGE>
EXHIBIT E
Form of Certificate of Beneficial Ownership
for Registered Securities to be Provided to the
Euroclear Operator or to Cedel Bank, societe anonyme
CERTIFICATION
U.S. $____________
THERMO ECOTEK CORPORATION
Non-Interest Bearing Convertible Subordinated Debentures
due March 15, 2001
(the "Securities")
Please issue U. S. $_______ of the U.S. $________ aggregate
principal amount of the Securities held by you for our account
in registered form. We hereby certify to you that we are not a
"U.S. Person" as defined in Regulation S under the United States
Securities Act of 1933, as amended or a "United States person"
as defined under the Internal Revenue Code of 1986, as amended,
except as provided in U.S. Treasury Regulation Section
1.163-5(c)(2)(i)(D). The exact name of the beneficial holder
that the Securities are to be registered in is as follows:
The following denomination(s) of Registered Securities are
requested (integral multiples of $1,000):
Denominations No. of Certificates Amount
$_________________ ________________ = $________________
__________________ ________________ = $________________
__________________ ________________ = $________________
__________________ ________________ = $________________
Total Requested ________________ = $________________
We irrevocably authorize you to produce this certificate or
a copy hereof to any interested party in any administrative or
proceedings with respect to the matters covered by this
certificate.
E-1PAGE
<PAGE>
Dated: __________________, 1996
Yours faithfully,
[NAME]
By: _____________________
Signature
To be completed by the
account holder as, or as
agent for, the beneficial
owner(s) of the
Securities to which this
certificate relates.
E-2PAGE
<PAGE>
EXHIBIT F
Form of Certificate to be Given by
The Euroclear Operator and Cedel Bank, societe anonyme
CERTIFICATION
U.S. $_____________
THERMO ECOTEK CORPORATION
Non-Interest Bearing Convertible Subordinated Debentures
due March 15, 1996
(the "Securities")
This is to certify that, based solely on certifications we
have received in writing, by tested telex or electronic
transmission from member organizations appearing in our records
as persons being entitled to a portion of the principal amount
set forth below (our "Member Organizations"), substantially to
the effect set forth in the Fiscal Agency Agreement, as of the
date hereof, U.S. $___________ aggregate principal amount of the
above-captioned Securities is owned by persons that are not
citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the
income of which is subject to United States Federal income
taxation regardless of its source (except as provided in U.S.
Treasury Regulation Section 1.163-5(c)(2)(i)(D)) or any other
person deemed a "U.S. person" under Regulation S under the U.S.
Securities Act of 1933, as amended.
The following denomination(s) of Registered Securities are
requested (integral multiples of $1,000):
No. of Certificates Amount
$1,000 Denomination ________________ = $________________
$10,000 Denomination ________________ = $________________
Total Requested ________________ = $________________
We further certify (i) that we are not making available
herewith for exchange (or, if relevant, exercise of any rights)
any portion of the Regulation S Global Security excepted in such
certifications and (ii) that as of the date hereof we have not
received any notification from any of our Member Organizations
to the effect that the statements made by such Member
F-1PAGE
<PAGE>
Organization with respect to any portion of the part submitted
herewith for exchange (or, if relevant, exercise of any rights)
are no longer true and cannot be relied upon as of the date
hereof.
We understand that this certification is required in
connection with certain tax laws and, if applicable, certain
securities laws of the United States. In connection therewith,
if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or
would be relevant, we irrevocably authorize you to produce this
certification to any interested party in such proceedings.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and
its territories and possessions, including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
Dated: __________________, 1996
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE,
AS OPERATOR OF THE EUROCLEAR
SYSTEM]
[CEDEL BANK, SOCIETE ANONYME]
By: _________________________
Exhibit 11
THERMO ECOTEK CORPORATION
Computation of Earnings per Share
Three Months Ended
--------------------------
March 30, April 1,
1996 1995
--------------------------------------------------------------------------
Net income (a) $ 609,000 $ 411,000
=========== ===========
Shares:
Weighted average shares outstanding 15,544,553 13,952,725
Add: Shares issuable from assumed exercise
of options (as determined by the
application of the treasury stock method) 346,158 -
Shares issuable from assumed conversion
of noninterest-bearing subordinated
convertible debentures 419,787 -
----------- -----------
Weighted average shares - primary (b) 16,310,498 13,952,725
=========== ===========
Primary earnings per share (a) / (b) $ .04 $ .03
=========== ===========
PAGE
<PAGE>
Exhibit 11
THERMO ECOTEK CORPORATION
Computation of Earnings per Share (continued)
Six Months Ended
---------------------------
March 30, April 1,
1996 1995
--------------------------------------------------------------------------
Net income (a) $ 3,661,000 $ 2,687,000
Add: Convertible debenture interest, net
of tax 822,000 863,000
----------- -----------
Income applicable to common stock assuming
dilution (b) $ 4,483,000 $ 3,550,000
=========== ===========
Shares:
Weighted average shares outstanding 15,536,028 13,555,251
Add: Shares issuable from assumed exercise
of options (as determined by the
application of the treasury stock method) 320,954 -
Shares issuable from assumed conversion
of noninterest-bearing subordinated
convertible debentures 209,893 -
----------- -----------
Weighted average shares - primary (c) 16,066,875 13,555,251
Add: Incremental shares issuable from assumed
exercise of options (as determined
by the application of the treasury
stock method) 43,475 313,470
Add: Shares issuable from assumed conversion
of 4% subordinated convertible debentures 7,210,526 7,210,526
----------- -----------
Weighted average shares - fully diluted (d) 23,320,876 21,079,247
=========== ===========
Primary earnings per share (a) / (c) $ .23 $ .20
=========== ===========
Fully diluted earnings per share (b) / (d) $ .19 $ .17
=========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO
ECOTEK CORP.'S QUARTERLY REPORT FILED ON FORM 10-Q FOR THE QUARTER ENDED MARCH
30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-28-1996
<PERIOD-END> MAR-30-1996
<CASH> 81,374
<SECURITIES> 0
<RECEIVABLES> 20,555
<ALLOWANCES> 0
<INVENTORY> 9,164
<CURRENT-ASSETS> 124,895
<PP&E> 283,452
<DEPRECIATION> 37,444
<TOTAL-ASSETS> 400,783
<CURRENT-LIABILITIES> 47,083
<BONDS> 149,018
<COMMON> 1,558
0
0
<OTHER-SE> 95,263
<TOTAL-LIABILITY-AND-EQUITY> 400,783
<SALES> 67,801
<TOTAL-REVENUES> 67,801
<CGS> 50,749
<TOTAL-COSTS> 50,749
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,464
<INCOME-PRETAX> 6,781
<INCOME-TAX> 575
<INCOME-CONTINUING> 3,661
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,661
<EPS-PRIMARY> .23
<EPS-DILUTED> .19
</TABLE>
