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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 10-K/A
AMENDMENT NO. 1
FOR ANNUAL AND TRANSITION REPORTS PURSUANT
TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-19410
Sepracor Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 22-2536587
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
111 Locke Drive, Marlborough, Massachusetts 01752
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (508) 481-6700
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
(Title of class)
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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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. [ ]
The aggregate market value of voting Common Stock held by nonaffiliates of the
registrant was approximately $1,108,820,000, based on the last reported sale
price of the Common Stock on the Nasdaq consolidated transaction reporting
system on March 13, 1998.
Number of shares outstanding of the registrant's class of Common Stock as of
March 13, 1998: 27,851,045 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1997 Annual Report to Stockholders - Part II
Proxy Statement for the 1998 Annual Meeting of Stockholders - Part III
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are included or incorporated by reference
from the 1997 Annual Report.
1. The following financial statements (and related notes) of the Company
are incorporated by reference from the 1997 Annual Report:
Page*
Report of Independent Accountants 25*
Consolidated Balance Sheets at December 31, 1997 and 1996 26*
Consolidated Statements of Operations for the Years Ended
December 31, 1997, 1996 and 1995 27*
Consolidated Statements of Stockholders' Equity for the Years
Ended December 31, 1997, 1996 and 1995 28*
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1997, 1996 and 1995 29*
Notes to the Consolidated Financial Statements 30*
-----------
* Refers to page number of the 1997 Annual Report. The financial
statements (and related notes) are incorporated by reference from the
1997 Annual Report.
2. The schedule listed below and the Report of Independent Accountants on
financial statement schedule are filed as part of this Annual Report on
Form 10-K:
Report of Independent Accountants on Financial
Statement Schedule S-1
Report of Independent Accountants on Financial
Statement Schedule S-2
Schedule II -- Valuation and Qualifying Accounts S-3
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All other schedules are omitted as the information required is
inapplicable or the information is presented in the consolidated
financial statements or the related notes.
3. The Exhibits listed in the Exhibit Index immediately preceding the
Exhibits filed as a part of this Annual Report on Form 10-K.
(b) The following current report on Form 8-K was filed by the Company
during the last quarter of the year ended December 31, 1997.
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 15, 1997, as amended by Current Report on Form
8-K filed with the Securities and Exchange Commission December 18, 1997,
relating to the signing of a licensing agreement with Schering-Plough
Corporation.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 on
Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly
authorized as of this 31st day of March, 1998.
SEPRACOR INC.
By: /s/ David P. Southwell
-------------------------------------
David P. Southwell
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
3.1(7) -- Restated Certificate of Incorporation of the
Registrant, as amended.
3.2(1) -- Amended and Restated By-Laws of the Registrant.
4.1(1) -- Specimen Certificate for shares of Common Stock, $.10
par value, of the Registrant.
4.2(2) -- Form of 7% Convertible Subordinated Debenture
due 2002.
4.3(9) -- Form of 6 1/4% Convertible Subordinated
Debenture due 2005.
4.4(9) -- Global 6 1/4% Convertible Subordinated Debenture
payable to Cede & Co. due 2005.
10.1(1) -- Second Amended and Restated Registration Rights
Agreement dated as of June 28, 1991, by and among the
Registrant and the persons listed on Schedule I thereto.
(*)10.2(8) -- The Registrant's 1991 Restated Stock Option Plan,
as amended and restated.
(*)10.3(8) -- The Registrant's 1991 Director Stock Option Plan,
as amended and restated.
10.4(2) -- Lease as to Marlboro Industrial Park, dated December
12, 1995, between Valerie A. Colbert, Trustee of Second
Marlboro Development Trust under Declaration of Trust
dated September 15, 1972, and the Registrant (the
"Marlboro Lease").
(*)10.5(8) -- The Registrant's 1996 Employee Stock Purchase
Plan, as amended and restated.
10.6(3)+ -- License Agreement dated June 1, 1993, between the
Registrant and Marion Merrill Dow ("MMD").
</TABLE>
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<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
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10.7(3) -- Stock Purchase Agreement dated June 1, 1993,
between the Registrant and MMD.
10.8(4) -- Technology Transfer and License Agreement dated as of
January 1, 1994, between the Registrant and BioSepra
Inc.
10.9(4) -- Technology Transfer and License Agreement dated as of
January 1, 1994, between the Registrant and HemaSure
Inc.
10.10(2) -- Technology Transfer and License Agreement, effective
January 1, 1995, between the Registrant and SepraChem
Inc.
10.11(5) -- Series A Convertible Preferred Stock Purchase
Agreement, dated September 30, 1994, by and among the
Registrant and OFD Partners, L.P.
(*)10.12(6) -- Letter Agreement, dated September 30, 1993,
between the Company and David S. Barlow.
(*)10.13(6) -- Letter Agreement, dated June 10, 1994, between
the Registrant and David Southwell.
(*)10.14(8) -- Letter Agreement, dated February 23, 1996,
between the Registrant and Paul D. Rubin.
(*)10.15(8) -- Letter Agreement, dated February 23, 1995,
between the Registrant and Robert F. Scumaci.
(*)10.16(8) -- Consulting Agreement between the Registrant and
Mr. Steigrod, dated September 1, 1996.
(*)10.17(9) -- Consulting Agreement Amendment, dated as
of January 1, 1997, between the Registrant and
Alan A. Steigrod.
</TABLE>
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<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
10.18(9) -- Promissory Note from David Barlow to the Registrant,
dated July 1, 1997 to December 31, 1997, and Letter
Extension from the Registrant dated December 18, 1997.
10.19(8) -- Promissory Note from Paul D. Rubin to the Registrant,
dated May 23, 1997.
10.20(9) -- Promissory Note from Paul D. Rubin to the Registrant,
dated January 22, 1998.
10.21(6) -- Series B Preferred Stock Purchase Agreement dated
March 14, 1995, between the Registrant and Beckman
Instruments, Inc.
10.22(9) -- First Amendment to Marlboro Lease, dated February 1,
1997, and Second Amendment to Marlboro Lease, dated July
1, 1997.
10.23(6) -- Intellectual Property Security Agreement by and
between Fleet Bank of Massachusetts, N.A. and
the Registrant, dated December 28, 1994.
10.24(8) -- Amended and Restated Revolving Credit and Security
Agreement among Fleet National Bank, the Registrant and
Sepracor Securities Corporation, dated December 31,
1996.
10.25(8) -- Confirmation of and Amendment to Intellectual
Property Security Agreement between Fleet
National Bank and the Registrant, dated February 1997.
10.26(8) -- Deposit Pledge Agreement, dated December 31, 1996,
between the Registrant and Fleet National Bank.
10.27(8) -- Amended and Restated Promissory Note, dated
December 31, 1996, between the Registrant,
Sepracor Securities Corporation and Fleet
National Bank.
</TABLE>
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<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
10.28(8) -- Guaranty Agreement, dated December 31, 1996,
between the Registrant and Fleet National Bank
for BioSepra Inc.
10.29(2) -- Fiscal Agency Agreement, dated as of November
1, 1995, between the Registrant and Chemical Bank, as
Fiscal Agent.
10.30+(9) -- License Agreement, dated January 30, 1998, by and
between the Registrant and Janssen Pharmaceutica N.V.
10.31+(9) -- Agreement, dated as of December 5, 1997, by and
between the Registrant and Schering-Plough Ltd.
10.32(9) -- Put Agreement, dated as of December 30, 1997, between
the Registrant and Fleet National Bank.
10.33(9) -- Purchase Agreement, dated February 5, 1998,
between the Registrant, Morgan Stanley & Co.
Incorporated, Lehman Brothers Inc., Smith Barney
Inc. and Vector Securities International, Inc.
10.34 -- Indenture, dated as of February 10, 1998, between the
Registrant and Chase Manhattan Bank, as trustee,
relating to the 6 1/4% Convertible Subordinated
Debentures due 2005.
10.35(9) -- Registration Rights Agreement, dated as of
February 5, 1998, by and among the Registrant,
Morgan Stanley & Co. Incorporated, Lehman
Brothers Inc., Smith Barney Inc. and Vector
Securities International, Inc.
(*)10.36(9) -- The Registrant's 1997 Stock Option Plan.
(*)10.37 -- Consulting Agreement between the Registrant and
Digby W. Barrios, dated October 1, 1995.
</TABLE>
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<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
13(9) -- 1997 Annual Report to Stockholders (which shall be
deemed filed only with respect to those portions
specifically incorporated by reference herein).
21(9) -- Subsidiaries of the Company.
23.1(9) -- Consent of Coopers & Lybrand L.L.P.
23.2(9) -- Consent of Arthur Andersen LLP.
27(9) -- Financial Data Schedule.
99(9) -- Report of Arthur Andersen LLP.
</TABLE>
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(*) Management contract or compensatory plan or arrangement filed as an
exhibit to this Form pursuant to Item 14(c) of Form 10-K.
(1) Incorporated herein by reference from the Registrant's Registration
Statement on Form S-1 (File No. 33-41653).
(2) Incorporated by reference from the Registrant's Annual Report on Form
10-K for the year ended December 31, 1995.
(3) Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1993.
(4) Incorporated by reference from the Registrant's Annual Report on Form
10-K for the year ended December 31, 1993.
(5) Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1994.
(6) Incorporated by reference from the Registrant's Annual Report on Form
10-K for the year ended December 31, 1994.
(7) Incorporated by reference from the Registrant's Registration Statement
on Form S-8, filed on June 5, 1996, relating to the 1991 Director Stock
Option Plan.
(8) Incorporated by reference from the Registrant's Annual Report on Form
10-K for the year ended December 31, 1996.
(9) Previously filed.
+ Confidential treatment as to certain portions.
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Exhibit 10.34
EXECUTION COPY
SEPRACOR INC.
TO
THE CHASE MANHATTAN BANK
TRUSTEE
INDENTURE
DATED AS OF FEBRUARY 10, 1998
6 1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2005
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TABLE OF CONTENTS
<TABLE>
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ARTICLE I
DEFINITIONS 1
SECTION 1.1. DEFINITIONS.................................................................. 1
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES 9
SECTION 2.1. DESIGNATION AMOUNT AND ISSUE OF DEBENTURES................................... 9
SECTION 2.2. FORM OF DEBENTURES........................................................... 10
SECTION 2.3. DATE AND DENOMINATION OF DEBENTURES; PAYMENTS OF INTEREST.................... 10
SECTION 2.4. EXECUTION OF DEBENTURES...................................................... 12
SECTION 2.5. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES; RESTRICTIONS
ON TRANSFER; DEPOSITARY...................................................... 13
SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES. ........................... 20
SECTION 2.7. TEMPORARY DEBENTURES......................................................... 21
SECTION 2.8. CANCELLATION OF DEBENTURES PAID, ETC. ...................................... 22
SECTION 2.9. CUSIP NUMBERS................................................................ 22
ARTICLE III
REDEMPTION OF DEBENTURES 22
SECTION 3.1. REDEMPTION PRICES............................................................ 22
SECTION 3.2. NOTICE OF REDEMPTION; SELECTION OF DEBENTURES................................ 22
SECTION 3.3. PAYMENT OF DEBENTURES CALLED FOR REDEMPTION.................................. 24
SECTION 3.4. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION................................ 25
SECTION 3.5. REDEMPTION AT OPTION OF HOLDERS.............................................. 25
ARTICLE IV
SUBORDINATION OF DEBENTURES 27
SECTION 4.1. AGREEMENT OF SUBORDINATION................................................... 27
SECTION 4.2. PAYMENTS TO DEBENTUREHOLDERS................................................. 28
SECTION 4.3. SUBROGATION OF DEBENTURES.................................................... 30
SECTION 4.4. AUTHORIZATION TO EFFECT SUBORDINATION........................................ 31
SECTION 4.5. NOTICE TO TRUSTEE............................................................ 31
SECTION 4.6. TRUSTEE'S RELATION TO SENIOR OBLIGATIONS..................................... 32
SECTION 4.7. NO IMPAIRMENT OF SUBORDINATION............................................... 32
SECTION 4.8. CERTAIN CONVERSIONS NOT DEEMED PAYMENT....................................... 33
SECTION 4.9. ARTICLE APPLICABLE TO PAYING AGENTS.......................................... 33
SECTION 4.10. SENIOR OBLIGATIONS ENTITLED TO RELY.......................................... 33
SECTION 4.11. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT............... 33
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY 34
SECTION 5.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST................................... 34
</TABLE>
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SECTION 5.2. MAINTENANCE OF OFFICE OR AGENCY.............................................. 34
SECTION 5.3. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE........................... 35
SECTION 5.5. EXISTENCE.................................................................... 36
SECTION 5.6. MAINTENANCE OF PROPERTIES.................................................... 36
SECTION 5.7. PAYMENT OF TAXES AND OTHER CLAIMS............................................ 37
SECTION 5.8. RULE 144A INFORMATION REQUIREMENT............................................ 37
SECTION 5.9. STAY, EXTENSION AND USURY LAWS............................................... 37
SECTION 5.10. COMPLIANCE CERTIFICATE....................................................... 38
ARTICLE VI
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE 38
SECTION 6.1. DEBENTUREHOLDERS' LISTS...................................................... 38
SECTION 6.2. PRESERVATION AND DISCLOSURE OF LISTS......................................... 38
SECTION 6.3. REPORTS BY TRUSTEE........................................................... 39
SECTION 6.4. REPORTS BY COMPANY........................................................... 39
ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON AN EVENT OF DEFAULT 39
SECTION 7.1. EVENTS OF DEFAULT............................................................ 40
SECTION 7.2. PAYMENTS OF DEBENTURES ON DEFAULT; SUIT THEREFOR............................. 42
SECTION 7.3. APPLICATION OF MONIES COLLECTED BY TRUSTEE................................... 43
SECTION 7.4. PROCEEDINGS BY DEBENTUREHOLDER............................................... 44
SECTION 7.5. PROCEEDINGS BY TRUSTEE....................................................... 45
SECTION 7.6. REMEDIES CUMULATIVE AND CONTINUING........................................... 45
SECTION 7.7. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF
DEBENTUREHOLDERS............................................................. 45
SECTION 7.8. NOTICE OF DEFAULTS........................................................... 46
SECTION 7.9. UNDERTAKING TO PAY COSTS..................................................... 46
ARTICLE VIII
CONCERNING THE TRUSTEE 46
SECTION 8.1. DUTIES AND RESPONSIBILITIES OF TRUSTEE....................................... 46
SECTION 8.2. RELIANCE ON DOCUMENTS, OPINIONS, ETC......................................... 48
SECTION 8.3. NO RESPONSIBILITY FOR RECITALS, ETC.......................................... 49
SECTION 8.4. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN
DEBENTURES.................................................................. 49
SECTION 8.5. MONIES TO BE HELD IN TRUST................................................... 49
SECTION 8.6. COMPENSATION AND EXPENSES OF TRUSTEE......................................... 49
SECTION 8.7. OFFICERS' CERTIFICATE AS EVIDENCE............................................ 50
SECTION 8.8. CONFLICTING INTERESTS OF TRUSTEE............................................. 50
SECTION 8.9. ELIGIBILITY OF TRUSTEE....................................................... 50
SECTION 8.10. RESIGNATION OR REMOVAL OF TRUSTEE............................................ 51
SECTION 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE.............................................. 52
SECTION 8.12. SUCCESSION BY MERGER, ETC.................................................... 53
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS............................................ 53
SECTION 8.14. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY...................... 53
</TABLE>
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<TABLE>
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ARTICLE IX
CONCERNING THE DEBENTUREHOLDERS 54
SECTION 9.1. ACTION BY DEBENTUREHOLDERS................................................... 54
SECTION 9.2. PROOF OF EXECUTION BY DEBENTUREHOLDERS....................................... 54
SECTION 9.3. WHO ARE DEEMED ABSOLUTE OWNERS............................................... 54
SECTION 9.4. COMPANY-OWNED DEBENTURES DISREGARDED......................................... 55
SECTION 9.5. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND................................. 55
ARTICLE X
DEBENTUREHOLDERS' MEETINGS 55
SECTION 10.1. PURPOSE OF MEETINGS.......................................................... 55
SECTION 10.2. CALL OF MEETINGS BY TRUSTEE.................................................. 56
SECTION 10.3. CALL OF MEETINGS BY COMPANY OR DEBENTUREHOLDERS.............................. 56
SECTION 10.4. QUALIFICATIONS FOR VOTING.................................................... 56
SECTION 10.5. REGULATIONS.................................................................. 57
SECTION 10.6. VOTING....................................................................... 57
SECTION 10.7. NO DELAY OF RIGHTS BY MEETING................................................ 58
ARTICLE XI
SUPPLEMENTAL INDENTURES 58
SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF DEBENTUREHOLDERS.............. 58
SECTION 11.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS..................... 59
SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURE............................................. 60
SECTION 11.4. NOTATION ON DEBENTURES....................................................... 60
SECTION 11.5. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE............................................................ 61
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE 61
SECTION 12.1. COMPANY MAY CONSOLIDATE ETC. ON CERTAIN TERMS................................ 61
SECTION 12.2. SUCCESSOR CORPORATION TO BE SUBSTITUTED...................................... 61
SECTION 12.3. OPINION OF COUNSEL TO BE GIVEN TRUSTEE....................................... 62
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE 62
SECTION 13.1. DISCHARGE OF INDENTURE....................................................... 62
SECTION 13.2. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE.............................. 63
SECTION 13.3. PAYING AGENT TO REPAY MONIES HELD............................................ 63
SECTION 13.4. RETURN OF UNCLAIMED MONIES................................................... 63
SECTION 13.5. REINSTATEMENT................................................................ 63
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS 64
SECTION 14.1. INDENTURE AND DEBENTURES SOLELY CORPORATE OBLIGATIONS........................ 64
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<TABLE>
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ARTICLE XV
CONVERSION OF DEBENTURES 64
SECTION 15.1. RIGHT TO CONVERT............................................................. 64
SECTION 15.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS.......................... 65
SECTION 15.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES................................... 66
SECTION 15.4. CONVERSION PRICE............................................................. 66
SECTION 15.5. ADJUSTMENT OF CONVERSION PRICE............................................... 67
SECTION 15.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.................... 75
SECTION 15.7. TAXES ON SHARES ISSUED....................................................... 76
SECTION 15.8. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH
GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK........................... 77
SECTION 15.9. RESPONSIBILITY OF TRUSTEE.................................................... 77
SECTION 15.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS................................... 78
ARTICLE XVI
MISCELLANEOUS PROVISIONS 79
SECTION 16.1. PROVISIONS BINDING ON COMPANY'S SUCCESSORS................................... 79
SECTION 16.2. OFFICIAL ACTS BY SUCCESSOR CORPORATION....................................... 79
SECTION 16.3. ADDRESSES FOR NOTICES, ETC................................................... 79
SECTION 16.4. GOVERNING LAW................................................................ 80
SECTION 16.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT; CERTIFICATES
TO TRUSTEE................................................................... 80
SECTION 16.6. LEGAL HOLIDAYS............................................................... 80
SECTION 16.7. TRUST INDENTURE ACT.......................................................... 80
SECTION 16.8. NO SECURITY INTEREST CREATED................................................. 81
SECTION 16.9. BENEFITS OF INDENTURE........................................................ 81
SECTION 16.10. TABLE OF CONTENTS, HEADINGS, ETC............................................. 81
SECTION 16.11. AUTHENTICATING AGENT......................................................... 81
SECTION 16.12. EXECUTION IN COUNTERPARTS.................................................... 82
EXHIBIT A FORM OF DEBENTURE.................................................................................... A-1
EXHIBIT B ACCREDITED INVESTOR LETTER........................................................................... B-1
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INDENTURE
INDENTURE, dated as of February 10, 1998, between Sepracor
Inc., a Delaware corporation (hereinafter sometimes called the "Company", as
more fully set forth in Section 1.1), and The Chase Manhattan Bank, a New York
banking corporation, as trustee hereunder (hereinafter sometimes called the
"Trustee", as more fully set forth in Section 1.1).
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issue of its 6 1/4% Convertible Subordinated Debentures due
2005 (hereinafter sometimes called the "Debentures"), in an aggregate principal
amount not to exceed $189,475,000 and, to provide the terms and conditions upon
which the Debentures are to be authenticated, issued and delivered, the Company
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to
be borne by the Debentures, a form of assignment, a form of option to elect
repayment upon a Fundamental Change, and a form of conversion notice to be borne
by the Debentures are to be substantially in the forms hereinafter provided for;
and
WHEREAS, all acts and things necessary to make the Debentures,
when executed by the Company and authenticated and delivered by the Trustee or a
duly authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized.
NOW THEREFORE THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Debentures are,
and are to be, authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Debentures by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the
Debentures (except as otherwise provided below) as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. The terms defined in this Section 1.1 (except
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture that are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise
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expressly provided or unless the context otherwise requires) shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture. The
words "herein," "hereof," "hereunder" and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
AFFILIATE: The term "Affiliate" of any specified Person shall
mean any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any specified
Person means, the power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean
the Board of Directors of the Company or a committee of such Board duly
authorized to act for it hereunder.
BUSINESS DAY: The term "Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to close
or be closed.
CLOSING PRICE: The term "Closing Price" shall have the meaning
specified in Section 15.5(h)(1).
COMMISSION: The term "Commission" shall mean the Securities
and Exchange Commission.
COMMON STOCK: The term "Common Stock" shall mean any stock of
any class of the Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company. Subject to the provisions of Section 15.6, however, shares
issuable on conversion of Debentures shall include only shares of the class
designated as common stock of the Company at the date of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
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COMPANY: The term "Company" shall mean Sepracor Inc., a
Delaware corporation, having its principal office at 111 Locke Drive,
Marlborough, MA 01752 and subject to the provisions of Article XII, shall
include its successors and assigns.
CONVERSION PRICE: The term "Conversion Price" shall have the
meaning specified in Section 15.4.
CORPORATE TRUST OFFICE: The term "Corporate Trust Office" or
other similar term, shall mean the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which office is, at the date as of which this
Indenture is dated, located at The Chase Manhattan Bank, 450 West 33rd Street,
15th Floor, New York, New York 10001-2697, Attention: Global Trust Services.
CREDIT AGREEMENT: The term "Credit Agreement" shall mean that
certain Amended and Restated Revolving Credit and Security Agreement, dated as
of December 31, 1996, among the Company, Sepracor Securities Corporation and
Fleet National Bank, as amended through the date hereof, as further amended,
amended and restated, supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing,
consolidating or otherwise restructuring (including adding subsidiaries of the
Company as additional borrowers or guarantors thereunder) all or any portion of
the Indebtedness under such agreement or any replacement or successor agreement,
and whether by Fleet National Bank, individually or as agent for itself and
other lenders, and whether or not increasing the amount of Indebtedness that may
be incurred thereunder. The term "Credit Agreement" shall also include the
Company's obligations under the put agreement with Fleet National Bank to
purchase up to $2.0 million of Indebtedness of a former wholly owned Subsidiary
in the event of a default thereof by such Subsidiary.
CUSTODIAN: The term "Custodian" shall mean The Chase Manhattan
Bank, as custodian with respect to the Debentures in global form, or any
successor entity thereto.
DEBENTURE OR DEBENTURES: The terms "Debenture" or "Debentures"
shall mean any Debenture or Debentures, as the case may be, authenticated and
delivered under this Indenture, including the Global Debenture.
DEBENTUREHOLDER OR HOLDER: The terms "Debentureholder" or
"holder" as applied to any Debenture, or other similar terms (but excluding the
term "beneficial holder"), shall mean any Person in whose name at the time a
particular Debenture is registered on the Debenture registrar's books.
DEBENTURE REGISTER: The term "Debenture register" shall have
the meaning specified in Section 2.5.
DEFAULT: The term "default" shall mean any event that is, or
after notice or passage of time, or both, would be, an Event of Default.
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DEPOSITARY: The term "Depositary" shall mean, with respect to
the Debentures issuable or issued in whole or in part in global form, the person
specified in Section 2.5(d) as the Depositary with respect to such Debentures,
until a successor shall have been appointed and become such pursuant to the
applicable provisions of this Indenture, and thereafter, "Depositary" shall mean
or include such successor.
DESIGNATED SENIOR OBLIGATIONS: The term "Designated Senior
Obligations" shall mean Senior Obligations under the Credit Agreement or any
other Senior Obligations in which the instrument creating or evidencing the same
or the assumption or guarantee thereof (or related agreements or documents to
which the Company is a party) expressly provides that such Senior Obligations
shall be "Designated Senior Obligations" for purposes of this Indenture
(provided that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Obligations to exercise
the rights of Designated Senior Obligations). If any payment made to any holder
of any Designated Senior Obligations or its Representative with respect to such
Designated Senior Obligations is rescinded or must otherwise be returned by such
holder or Representative upon the insolvency, bankruptcy or reorganization of
the Company or otherwise, the reinstated Indebtedness of the Company arising as
a result of such rescission or return shall constitute Designated Senior
Obligations effective as of the date of such rescission or return.
EXCHANGE ACT: The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.
EVENT OF DEFAULT: The term "Event of Default" shall mean any
event specified in Section 7.1(a), (b), (c), (d) or (e).
FUNDAMENTAL CHANGE: The term "Fundamental Change" shall mean
the occurrence of any transaction or event in connection with which all or
substantially all the Common Stock shall be exchanged for, be converted into, be
acquired for, or constitute in all material respects solely the right to
receive, consideration which is not all or substantially all common stock which
is (or, upon consummation of or immediately following such transaction or event,
will be) listed on a United States national securities exchange or approved for
quotation on the Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices (whether by means of
an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise).
INDEBTEDNESS: The term "Indebtedness" shall mean, with respect
to any Person, and without duplication, (a) all indebtedness, obligations and
other liabilities (contingent or otherwise) of such Person for borrowed money
(including obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements,
and any loans or advances from banks, whether or not evidenced by notes or
similar instruments, and all commitment, stand by and other fees due and payable
to financial institutions with respect to credit facilities available to such
Person) or evidenced by bonds, debentures, notes
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or similar instruments (whether or not the recourse of the lender is to the
whole of the assets of such Person or to only a portion thereof) (other than any
account payable or other accrued current liability or obligation incurred in the
ordinary course of business in connection with the obtaining of materials or
services); (b) all reimbursement obligations and other liabilities (contingent
or otherwise) of such Person with respect to letters of credit, bank guarantees
or bankers' acceptances; (c) all obligations and liabilities (contingent or
otherwise) in respect of leases of real or personal property or other assets of
such Person required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease obligations on the balance
sheet of such Person and all obligations and other liabilities (contingent or
otherwise) under any lease or related document (including a purchase agreement)
in connection with the lease of real property which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property and thereby guarantee a minimum residual value of the leased
property to the lessor and the obligations of such Person under such lease or
related document to purchase or to cause a third party to purchase such leased
property; (d) all obligations of such Person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement; (e) all direct or indirect guaranties or
similar agreements by such Person in respect of, and obligations or liabilities
(contingent or otherwise) of such Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of indebtedness, obligations
or liabilities of another Person of the kind described in clauses (a) through
(d); (f) any indebtedness or other obligations described in clauses (a) through
(e) secured by any mortgage, pledge, lien or other encumbrance existing on
property which is owned or held by such Person, regardless of whether the
indebtedness or other obligation secured thereby shall have been assumed by such
Person; and (g) any and all deferrals, renewals, extensions and refundings of,
or amendments, modifications or supplements to, any indebtedness, obligation or
liability of the kind described in clauses (a) through (f).
INDENTURE: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
INITIAL PURCHASERS: The term "Initial Purchasers" shall mean
Morgan Stanley & Co. Incorporated, Lehman Brothers Inc., Smith Barney Inc. and
Vector Securities International, Inc.
INSTITUTIONAL ACCREDITED INVESTOR: The term "Institutional
Accredited Investor" shall mean an institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
LIQUIDATED DAMAGES: The term "Liquidated Damages" shall have
the meaning specified in Section 2(f) of the Registration Rights Agreement.
NON-U.S. PERSON: The term Non-U.S. Person shall mean a person
other than a U.S. Person (as defined in Regulation S).
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OFFICERS' CERTIFICATE: The term "Officers' Certificate," when
used with respect to the Company, shall mean a certificate signed by both (a)
the President or Chief Executive Officer or any Executive or Senior Vice
President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President") and
(b) by the Treasurer or any Assistant Treasurer or Secretary or any Assistant
Secretary of the Company.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean
an opinion in writing signed by legal counsel, who may be an employee of or
counsel to the Company, or other counsel reasonably acceptable to the Trustee.
OUTSTANDING: The term "outstanding," when used with reference
to Debentures, shall, subject to the provisions of Section 9.4, mean, as of any
particular time, all Debentures authenticated and delivered by the Trustee under
this Indenture, except
(a) Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the redemption of
which monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or (ii) which shall
have been otherwise defeased in accordance with Article XIII;
(c) Debentures in lieu of which, or in substitution for which,
other Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.6; and
(d) Debentures converted into Common Stock pursuant to Article
XV and Debentures deemed not outstanding pursuant to Article III.
PAYMENT BLOCKAGE NOTICE: The term "Payment Blockage Notice"
shall have the meaning specified in Section 4.2.
PERSON: The term "Person" shall mean a corporation, an
association, a partnership, a limited liability company, an individual, a joint
venture, a joint stock company, a trust, an unincorporated organization or a
government or an agency or a political subdivision thereof.
PORTAL MARKET: The term "The Portal Market" shall mean The
Portal Market operated by the National Association of Securities Dealers, Inc.
or any successor thereto.
PREDECESSOR DEBENTURE: The term "Predecessor Debenture" of any
particular Debenture shall mean every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.6 in lieu of a lost, destroyed or stolen
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<PAGE> 12
Debenture shall be deemed to evidence the same debt as the lost, destroyed or
stolen Debenture that it replaces.
QIB: The term "QIB" shall mean a "qualified institutional
buyer" as defined in Rule 144A.
REGISTRATION RIGHTS AGREEMENT: The term "Registration Rights
Agreement" shall mean that certain Registration Rights Agreement, dated as of
February 5, 1998, between the Company and the Initial Purchasers, as amended
from time to time in accordance with its terms, a copy of which is attached as
Exhibit C hereto.
REGULATION S: The term "Regulation S" shall mean Regulation S
as promulgated under the Securities Act.
REPRESENTATIVE: The term "Representative" shall mean the (a)
indenture trustee or other trustee, agent or representative for any Senior
Obligations or (b) with respect to any Senior Obligations that do not have any
such trustee, agent or other representative, (i) in the case of such Senior
Obligations issued pursuant to an agreement providing for voting arrangements as
among the holders or owners of such Senior Obligations, any holder or owner of
such Senior Obligations acting with the consent of the required persons
necessary to bind such holders or owners of such Senior Obligations and (ii) in
the case of all other such Senior Obligations, the holder or owner of such
Senior Obligations.
RESPONSIBLE OFFICER: The term "Responsible Officer," when used
with respect to the Trustee, shall mean an officer assigned to the Corporate
Trust Office, including any managing director, vice president, assistant vice
president, assistant treasurer, assistant secretary or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and having direct responsibility for the
administration of this Indenture, and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
RESTRICTED SECURITIES: The term "Restricted Securities" shall
have the meaning specified in Section 2.5.
RULE 144A: The term "Rule 144A" shall mean Rule 144A as
promulgated under the Securities Act.
SECURITIES ACT: The term "Securities Act" shall mean the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder, as in effect from time to time.
SENIOR OBLIGATIONS: The term "Senior Obligations" shall mean
the principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable
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<PAGE> 13
as a claim in any such proceeding) and rent payable on or in connection with,
and all fees, costs, expenses and other amounts accrued or due on or in
connection with, Indebtedness of the Company, whether outstanding on the date of
this Indenture or thereafter created, incurred, assumed, guaranteed or in effect
guaranteed by the Company (including all deferrals, renewals, extensions or
refundings of, or amendments, modifications or supplements to, the foregoing),
unless in the case of any particular Indebtedness the instrument creating or
evidencing the same or the assumption or guarantee thereof expressly provides
that such Indebtedness shall not be senior in right of payment to the Debentures
or expressly provides that such Indebtedness is "pari passu" or "junior" to the
Debentures. Notwithstanding the foregoing, the term Senior Obligations shall not
include the aggregate principal amount of $80,880,000 in 7% Convertible
Subordinated Debentures due 2002 or any Indebtedness of the Company to any
subsidiary of the Company, a majority of the voting stock of which is owned,
directly or indirectly, by the Company. If any payment made to any holder of any
Senior Obligations or its Representative with respect to such Senior Obligations
is rescinded or must otherwise be returned by such holder or Representative upon
the insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Senior Obligations effective as of the date of such
rescission or return. Notwithstanding anything else to the contrary in this
Indenture, the term "Senior Obligations" shall include Indebtedness under the
Credit Agreement.
SIGNIFICANT SUBSIDIARY: The term "Significant Subsidiary"
shall mean, as of any date of determination, a subsidiary of the Company, a
majority of the voting stock or other voting power of which is owned directly or
indirectly by the Company, if as of such date of determination either (a) the
assets of such subsidiary equal 10% or more of the Company's total consolidated
assets or (b) the total revenue of which represented 10% or more of the
Company's consolidated total revenue for the most recently completed fiscal
year; provided, however, for purposes of this Indenture, BioSepra, Inc. shall
not be deemed to be a Significant Subsidiary.
SUBSIDIARY: The term "Subsidiary" shall mean, with respect to
any Person, (i) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of capital stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or one or more subsidiaries of such Person (or any combination thereof).
TRADING DAY: The term "Trading Day" shall have the meaning
specified in Section 15.5(h)(5).
TRIGGER EVENT: The term "Trigger Event" shall have the meaning
specified in Section 15.5(d).
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TRUST INDENTURE ACT: The term "Trust Indenture Act" shall mean
the Trust Indenture Act of 1939, as amended, as it was in force at the date of
execution of this Indenture, except as provided in Sections 11.3 and 15.6;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after the date hereof, the term "Trust Indenture Act" shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939 as so amended.
TRUSTEE: The term "Trustee" shall mean The Chase Manhattan
Bank, and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors be a party and any
successor trustee at the time serving as successor trustee hereunder.
The definitions of certain other terms are as specified in
Sections 2.5 and 3.5 and Article XV.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES
SECTION 2.1. DESIGNATION AMOUNT AND ISSUE OF DEBENTURES. The Debentures
shall be designated as "6 1/4% Convertible Subordinated Debentures due 2005."
Debentures not to exceed the aggregate principal amount of $165,000,000 (or
$189,475,000 if the over-allotment option set forth in Section 2 of the Purchase
Agreement dated February 5, 1998 (as amended from time to time by the parties
thereto) by and between the Company and the Initial Purchasers is exercised in
full) (except pursuant to Sections 2.5, 2.6, 3.3, 3.5 and 15.2 hereof) upon the
execution of this Indenture, or from time to time thereafter, may be executed by
the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Debentures to or upon the written
order of the Company, signed by its (a) Chief Executive Officer, President, any
Executive or Senior Vice President or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "Vice President") and (b) Treasurer or Assistant Treasurer or its
Secretary or any Assistant Secretary, without any further action by the Company
hereunder.
In authenticating any Debentures, the Trustee shall be entitled to
receive prior to the first authentication of any Debentures, and shall be fully
protected in relying upon, unless and until such documents have been superseded
or revoked:
(1) an Officers' Certificate setting forth the form or forms and terms
of the Debentures, stating that the form or forms and terms of the
Debentures have been, or will be when established in accordance with
such procedures as shall be referred to therein, established in
compliance with this Indenture; and
(2) an Opinion of Counsel substantially to the effect that the form or
forms and terms of the Debentures have been, or will be when
established in accordance with such procedures as shall be referred to
therein, established in compliance with this Indenture
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and that the supplemental indenture, to the extent applicable, and
Debentures have been duly authorized and, if executed and authenticated
in accordance with the provisions of the Indenture and delivered to and
duly paid for by the purchasers thereof on the date of such opinion,
would be entitled to the benefits of the Indenture and would be valid
and binding obligations of the Company, enforceable against the Company
in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar
laws affecting creditors' rights generally, general principles of
equity, and such other matters as shall be specified therein.
SECTION 2.2. FORM OF DEBENTURES. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A, which is incorporated in and
made a part of this Indenture.
Any of the Debentures may have such letters, numbers or other
marks of identification and such notations, legends and endorsements as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Debentures may be
listed, or to conform to usage.
Any Debenture in global form shall represent such of the
outstanding Debentures as shall be specified therein and shall provide that it
shall represent the aggregate amount of outstanding Debentures from time to time
endorsed thereon and that the aggregate amount of outstanding Debentures
represented thereby may from time to time be increased or reduced to reflect
transfers or exchanges permitted hereby. Any endorsement of a Debenture in
global form to reflect the amount of any increase or decrease in the amount of
outstanding Debentures represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in such manner and upon written
instructions given by the holder of such Debentures in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Debenture in global form shall be made to the holder of such Debenture.
The terms and provisions contained in the form of Debenture
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
SECTION 2.3. DATE AND DENOMINATION OF DEBENTURES; PAYMENTS OF INTEREST.
The Debentures shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. Every
Debenture shall be dated the date of its authentication and shall bear interest
from the applicable date in each case as specified on the face of the form of
Debenture attached as Exhibit A hereto. Interest on the Debentures shall be
computed on the basis of a 360-day year comprised of twelve (12) 30-day months
and shall be payable semi-annually on each of February 15 and August 15 of each
year.
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The Person in whose name any Debenture (or its Predecessor Debenture)
is registered on the Debenture register at the close of business on any record
date with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date, except (i) that the interest
payable upon redemption (unless the date of redemption is an interest payment
date) will be payable to the person to whom principal is payable and (ii) as set
forth in the next succeeding sentence. In the case of any Debenture (or portion
thereof) which is converted into Common Stock of the Company during the period
from (but excluding) a record date for any interest payment date to (but
excluding) such interest payment date either (i) if such Debenture (or portion
thereof) has been called for redemption on a redemption date which occurs during
such period, or is to be redeemed in connection with a Fundamental Change on a
Repurchase Date (as defined in Section 3.5) which occurs during such period, the
Company shall not be required to pay interest on such interest payment date in
respect of any such Debenture (or portion thereof) except to the extent required
to be paid upon redemption of such Debenture or portion thereof pursuant to
Section 3.3 or 3.5 hereof or (ii) if otherwise, any such Debenture (or portion
thereof) submitted for conversion during such period shall be accompanied by
funds equal to the interest payable on such interest payment date on the
principal amount so converted. Interest may, as the Company shall specify to the
paying agent in writing by each record date, be paid either (i) by check mailed
to the address of the person entitled thereto as it appears in the Debenture
register (provided that a holder of Debentures with an aggregate principal
amount in excess of $2,000,000 shall, at the written election of such holder, be
paid by wire transfer in immediately available funds) or (ii) by transfer to an
account maintained by such person located in the United States; provided,
however, that payments to the Depositary will be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee. The
term "record date" with respect to any interest payment date shall mean the
January 31 or July 31 preceding said February 15 or August 15, respectively.
Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any said February 15 or August 15
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Debentureholder on the relevant record date by virtue of his having been such
Debentureholder; and such Defaulted Interest shall be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below;
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Debentures (or
their respective Predecessor Debentures) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
to be paid on each Debenture and the date of the payment (which shall
be not less than twenty-five (25) days after the receipt by the Trustee
of such notice, unless the Trustee shall consent to an earlier date),
and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust
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<PAGE> 17
for the benefit of the Persons entitled to such Defaulted Interest as
in this clause provided. Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall be
not more than fifteen (15) days and not less than ten (10) days prior
to the date of the proposed payment, and not more than ten (10) days
after the receipt by the Trustee of the notice of the proposed payment,
the Trustee shall promptly notify the Company of such special record
date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the
special record date therefor to be mailed, first-class postage prepaid,
to each Debentureholder at his address as it appears in the Debenture
register, not less than ten (10) days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Debentures (or
their respective Predecessor Debentures) were registered at the close
of business on such special record date and shall no longer be payable
pursuant to the following clause (2) of this Section 2.3.
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange or automated quotation system
on which the Debentures may be listed or designated for issuance, and
upon such notice as may be required by such exchange or automated
quotation system, if, after written notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
SECTION 2.4. EXECUTION OF DEBENTURES. The Debentures shall be signed in
the name and on behalf of the Company by the facsimile signature of its Chief
Executive Officer or President or any Executive or Senior Vice President or any
Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and attested by the
facsimile signature of its Secretary or any of its Assistant Secretaries or
Treasurer or any of its Assistant Treasurers (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Debentures
as shall bear thereon a certificate of authentication substantially in the form
set forth on the form of Debenture attached as Exhibit A hereto, manually
executed by the Trustee (or an authenticating agent appointed by the Trustee as
provided by Section 16.11), shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by the Trustee (or
such an authenticating agent) upon any Debenture executed by the Company shall
be conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any
of the Debentures shall cease to be such officer before the Debentures so signed
shall have been authenticated and delivered by the Trustee, or disposed of by
the Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company; and any Debenture may be signed on behalf of
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<PAGE> 18
the Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer:
SECTION 2.5. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES;
RESTRICTIONS ON TRANSFER; DEPOSITARY.
(a) The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 5.2 being herein
sometimes collectively referred to as the "Debenture register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Debentures and of transfers of Debentures. The
Debenture register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "Debenture registrar" for the purpose of registering
Debentures and transfers of Debentures as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 5.2.
Upon surrender for registration of transfer of any Debenture
to the Debenture registrar or any co-registrar, and satisfaction of the
requirements for such transfer set forth in this Section 2.5, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Debentures of any
authorized denominations and of a like aggregate principal amount and bearing
such restrictive legends as may be required by this Indenture.
Debentures may be exchanged for other Debentures of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Debentures to be exchanged at any such office or agency
maintained by the Company pursuant to Section 5.2. Whenever any Debentures are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Debentures which the Debentureholder making the
exchange is entitled to receive bearing registration numbers not
contemporaneously outstanding.
All Debentures issued upon any registration of transfer or
exchange of Debentures shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Debentures surrendered upon such registration of transfer or exchange.
All Debentures presented or surrendered for registration of
transfer or for exchange, redemption or conversion shall (if so required by the
Company or the Debenture registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, and the Debentures shall be duly executed by the Debentureholder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Debentures, but the Company may require payment of a sum
sufficient to cover any tax,
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assessment or other governmental charge that may be imposed in connection with
any registration of transfer or exchange of Debentures.
Neither the Company nor the Trustee nor any Debenture
registrar or any Company registrar shall be required to exchange or register a
transfer of (a) any Debentures for a period of fifteen (15) days next preceding
any selection of Debentures to be redeemed or (b) any Debentures or portions
thereof called for redemption pursuant to Section 3.2 or (c) any Debentures or
portion thereof surrendered for conversion pursuant to Article XV or (d) any
Debentures or portions thereof tendered for redemption (and not withdrawn)
pursuant to Section 3.5.
(b) So long as the Debentures are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all
Debentures that upon initial issuance are beneficially owned by QIBs and all
Debentures that are beneficially owned by Non-U.S. Persons as a result of a sale
or transfer after initial issuance will be represented by one or more Debentures
in global form registered in the name of the Depositary or the nominee of the
Depositary (each, a "Global Debenture"), except as otherwise specified below.
The transfer and exchange of beneficial interests in any such Global Debenture
shall be effected through the Depositary in accordance with this Indenture and
the procedures of the Depositary therefor. The Trustee shall make appropriate
endorsements to reflect increases or decreases in the principal amounts of any
such Global Debenture as set forth on the face of the Debenture ("Principal
Amount") to reflect any such transfers. Except as provided below, beneficial
owners of a Global Debenture shall not be entitled to have certificates
registered in their names, will not receive or be entitled to receive physical
delivery of certificates in definitive form and will not be considered holders
of such Debentures in global form.
(c) So long as the Debentures are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Debenture to a QIB in accordance with Rule 144A or to a Non-U.S.
Person in accordance with Regulation S, and upon receipt of the definitive
Debenture or Debentures being so transferred, together with a certification,
substantially in the form on the reverse of the Debenture, from the transferor
that the transfer is being made in compliance with Rule 144A or to a Non-U.S.
Person in accordance with Regulation S (or other evidence satisfactory to the
Trustee), the Trustee shall make an endorsement on the applicable Global
Debenture to reflect an increase in the aggregate Principal Amount of the
Debentures represented by such Debenture in global form, the Trustee shall
cancel such definitive Debenture or Debentures in accordance with the standing
instructions and procedures of the Depositary, the aggregate Principal Amount of
Debentures represented by such Debenture in global form to be increased
accordingly; provided that no definitive Debenture, or portion thereof, in
respect of which the Company or an Affiliate of the Company held any beneficial
interest shall be included in such Debenture in global form until such
definitive Debenture is freely tradable in accordance with Rule 144(k); provided
further that the Trustee shall issue Debentures in definitive form upon any
transfer of a beneficial interest in the Debenture in global form to the Company
or any Affiliate of the Company.
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Upon any sale or transfer of a Debenture to an Institutional
Accredited Investor (other than pursuant to a registration statement that has
been declared effective under the Securities Act), such Institutional Accredited
Investor shall, prior to such sale or transfer, furnish to the Company and/or
the Trustee a signed letter containing representations and agreements relating
to restrictions on transfer substantially in the form set forth in Exhibit B to
this Indenture.
Any Debenture in global form may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Indenture as may be required by the
Custodian, the Depositary or by the National Association of Securities Dealers,
Inc. in order for the Debentures to be tradeable on The Portal Market or as may
be required for the Debentures to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A or Regulation S or required to
comply with any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange or automated quotation system upon
which the Debentures may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to which
any particular Debentures are subject.
(d) Every Debenture that bears or is required under this
Section 2.5(d) to bear the legend set forth in this Section 2.5(d) (together
with any Common Stock issued upon conversion of the Debentures and required to
bear the legend set forth in Section 2.5(e), collectively, the "Restricted
Securities") shall be subject to the restrictions on transfer set forth in this
Section 2.5(d) (including those set forth in the legend set forth below) unless
such restrictions on transfer shall be waived by written consent of the Company,
and the holder of each such Restricted Security, by such holder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.5(d) and 2.5(e), the term "transfer" encompasses any sale, pledge,
transfer or other disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any certificate evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.5(e), if
applicable) shall bear a legend in substantially the following form, unless such
Debenture has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer), or unless otherwise agreed by the Company in
writing, with written notice thereof to the Trustee:
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1)
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REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C)
IT IS NOT A UNITED STATES PERSON AND IS ACQUIRING THE DEBENTURE
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL
NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE
DEBENTURE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF SUCH DEBENTURE EXCEPT (A) TO SEPRACOR INC. OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE
THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR
A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE DEBENTURE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(F) ABOVE), IT WILL FURNISH TO THE CHASE
MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS SUCH
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURE EVIDENCED HEREBY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PRIOR TO
THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
DEBENTURE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
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ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE CHASE MANHATTAN BANK, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO
IS NOT A UNITED STATES PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(F) ABOVE OR UPON ANY
TRANSFER OF THE DEBENTURE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "UNITED STATES PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Debenture (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to which the conditions for removal of the
foregoing legend set forth therein have been satisfied may, upon surrender of
such Debenture for exchange to the Debenture registrar in accordance with the
provisions of this Section 2.5, be exchanged for a new Debenture or Debentures,
of like tenor and aggregate principal amount, which shall not bear the
restrictive legend required by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in Section 2.5(c) and in this Section 2.5(d)), a
Debenture in global form may not be transferred as a whole or in part except by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depositary with respect to the Debentures in global form. Initially, Global
Debentures shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Custodian for Cede
& Co.
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If at any time the Depositary for a Debenture in global form
notifies the Company that it is unwilling or unable to continue as Depositary
for such Debenture, the Company may appoint a successor Depositary with respect
to such Debenture. If a successor Depositary is not appointed by the Company
within ninety (90) days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of Debentures, will authenticate and deliver,
Debentures in certificated form, in aggregate principal amount equal to the
principal amount of such Debenture in global form, in exchange for such
Debenture in global form.
If a Debenture in certificated form is issued in exchange for
any portion of a Debenture in global form after the close of business at the
office or agency where such exchange occurs on any record date and before the
opening of business at such office or agency on the next succeeding interest
payment date, interest will not be payable on such interest payment date in
respect of such Debenture, but will be payable on such interest payment date,
subject to the provisions of Section 2.3, only to the person to whom interest in
respect of such portion of such Debenture in global form is payable in
accordance with the provisions of this Indenture.
Debentures in certificated form issued in exchange for all or
a part of a Debenture in global form pursuant to this Section 2.5 shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such Debentures in certificated form to the persons in whose names such
Debentures in certificated form are so registered.
At such time as all interests in a Debenture in global form
have been redeemed, converted, canceled, exchanged for Debentures in
certificated form, or transferred to a transferee who receives Debentures in
certificated form thereof, such Debenture in global form shall, upon receipt
thereof, be canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any time
prior to such cancellation, if any interest in a global Debenture is exchanged
for Debentures in certificated form, redeemed, converted, repurchased or
canceled, exchanged for Debentures in certificated form or transferred to a
transferee who receives Debentures in certificated form therefor or any
Debenture in certificated form is exchanged or transferred for part of a
Debenture in global form, the principal amount of such Debenture in global form
shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced or increased,
as the case may be, and an endorsement shall be made on such Debenture in global
form, by the Trustee or the Custodian, at the direction of the Trustee, to
reflect such reduction or increase.
(e) Until the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), any stock certificate representing Common Stock issued upon
conversion of such Debenture shall bear a legend in substantially the following
form, unless such Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
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<PAGE> 24
continues to be effective at the time of such transfer) or such Common Stock has
been issued upon conversion of Debentures that have been transferred pursuant to
a registration statement that has been declared effective under the Securities
Act, or unless otherwise agreed by the Company in writing with written notice
thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER
HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT
RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT
(A) TO SEPRACOR INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT PRIOR TO
SUCH TRANSFER FURNISHES TO BOSTON EQUISERVE LP, AS TRANSFER AGENT (OR A
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT,
AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL FURNISH
TO BOSTON EQUISERVE LP, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER
AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND (3) IT WILL DELIVER
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<PAGE> 25
TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY
PURSUANT TO CLAUSE 1(F) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK
EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on
transfer shall have expired in accordance with their terms or as to which the
conditions for removal of the foregoing legend set forth therein have been
satisfied may, upon surrender of the certificates representing such shares of
Common Stock for exchange in accordance with the procedures of the transfer
agent for the Common Stock, be exchanged for a new certificate or certificates
for a like number of shares of Common Stock, which shall not bear the
restrictive legend required by this Section 2.5(e).
(f) Any Debenture or Common Stock issued upon the conversion
or exchange of a Debenture that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Debentures or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).
SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its written request the Trustee
or an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Debenture, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case the applicant for a substituted Debenture shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Debenture and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent,
as the case may be, of satisfactory security or indemnity and evidence, as
described in the preceding paragraph, the
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Trustee or such authenticating agent may authenticate any such substituted
Debenture and make available for delivery such Debenture. Upon the issuance of
any substituted Debenture, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith. In case any
Debenture which has matured or is about to mature or has been called for
redemption or has been tendered for redemption (and not withdrawn) or is about
to be converted into Common Stock shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Debenture), as the
case may be, if the applicant for such payment or conversion shall furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
such security or indemnity as may be required by them to save each of them
harmless for any loss, liability, cost or expense caused by or connected with
such substitution, and, in case of destruction, loss or theft, evidence
satisfactory to the Company, the Trustee and, if applicable, any paying agent or
conversion agent of the destruction, loss or theft of such Debenture and of the
ownership thereof.
Every substitute Debenture issued pursuant to the provisions
of this Section 2.6 by virtue of the fact that any Debenture is destroyed, lost
or stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Debentures and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
or conversion of negotiable instruments or other securities without their
surrender.
SECTION 2.7. TEMPORARY DEBENTURES. Pending the preparation of
Debentures in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
the Company, authenticate and deliver temporary Debentures (printed or
lithographed). Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the Debentures in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every such
temporary Debenture shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Debentures in
certificated form. Without unreasonable delay the Company will execute and
deliver to the Trustee or such authenticating agent Debentures in certificated
form (other than in the case of Debentures in global form) and thereupon any or
all temporary Debentures (other than any such Debenture in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 5.2 and the Trustee or such authenticating agent
shall authenticate and make available for delivery in exchange for such
temporary Debentures an equal aggregate principal amount of Debentures in
certificated form. Such exchange shall be
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made by the Company at its own expense and without any charge therefor. Until so
exchanged, the temporary Debentures shall in all respects be entitled to the
same benefits and subject to the same limitations under this Indenture as
Debentures in certificated form authenticated and delivered hereunder.
SECTION 2.8. CANCELLATION OF DEBENTURES PAID, ETC. All Debentures
surrendered for the purpose of payment, redemption, conversion, exchange or
registration of transfer, shall, if surrendered to the Company or any paying
agent or any Debenture registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall return such canceled Debentures to the Company. If the Company
shall acquire any of the Debentures, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for cancellation.
SECTION 2.9. CUSIP NUMBERS. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to
Debentureholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Debentures or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Debentures,
and any such redemption shall not be affected by any defect in or omission of
such numbers. The Company will promptly notify the Trustee in writing of any
change in the CUSIP numbers.
ARTICLE III
REDEMPTION OF DEBENTURES
SECTION 3.1. REDEMPTION PRICES. The Company may not redeem the
Debentures prior to February 18, 2001. At any time on or after February 18,
2001, the Company , at its option, redeem all or from time to time any part of
the Debentures on any date prior to maturity, upon notice as set forth in
Section 3.2, and at the optional redemption prices set forth in the form of
Debenture attached as Exhibit A hereto, together with accrued interest to, but
excluding, the date fixed for redemption.
SECTION 3.2. NOTICE OF REDEMPTION; SELECTION OF DEBENTURES. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Debentures pursuant to Section 3.1, it shall fix a date for
redemption and it or, at its written request received by the Trustee not fewer
than forty-five (45) days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date fixed for redemption, the Trustee in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption not less than thirty (30) nor more than sixty (60)
days prior to the date fixed for redemption to the holders of Debentures so to
be redeemed as a whole or in part at their last addresses as the same appear on
the Debenture register; provided that if the Company shall give such notice, it
shall
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also give written notice, and written notice of the Debentures to be redeemed,
to the Trustee. Such mailing shall be by first class mail. The notice if mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice. In any case, failure to
give such notice by mail or any defect in the notice to the holder of any
Debenture designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Debenture.
Each such notice of redemption shall specify the aggregate
principal amount of Debentures to be redeemed, the CUSIP numbers, the date fixed
for redemption (which shall be a Business Day), the redemption price at which
Debentures are to be redeemed, the place or places of payment, that payment will
be made upon presentation and surrender of such Debentures, that interest
accrued to the date fixed for redemption will be paid as specified in said
notice, and that on and after said date interest thereon or on the portion
thereof to be redeemed will cease to accrue. Such notice shall also state the
current Conversion Price and the date on which the right to convert such
Debentures or portions thereof into Common Stock will expire. If fewer than all
the Debentures are to be redeemed, the notice of redemption shall identify the
Debentures to be redeemed (including CUSIP numbers, if any). In case any
Debenture is to be redeemed in part only, the notice of redemption shall state
the portion of the principal amount thereof to be redeemed and shall state that
on and after the date fixed for redemption, upon surrender of such Debenture, a
new Debenture or Debentures in principal amount equal to the unredeemed portion
thereof will be issued.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.2, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.4) an amount of money sufficient to redeem on the redemption date all
the Debentures (or portions thereof) so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
redemption price, together with accrued interest to, but excluding, the date
fixed for redemption; provided that if such payment is made on the redemption
date it must be received by the Trustee or paying agent, as the case may be, by
10:00 a.m. New York City time, on such date. If any Debenture called for
redemption is converted pursuant hereto, any money deposited with the Trustee or
any paying agent or so segregated and held in trust for the redemption of such
Debenture shall be paid to the Company upon its written request, or, if then
held by the Company, shall be discharged from such trust. Whenever any
Debentures are to be redeemed, the Company will give the Trustee written notice
in the form of an Officers' Certificate not fewer than forty-five (45) days (or
such shorter period of time as may be acceptable to the Trustee) prior to the
redemption date as to the aggregate principal amount of Debentures to be
redeemed.
If fewer than all the Debentures are to be redeemed, the
Trustee shall select the Debentures or portions thereof of the Global Debenture
or the Debentures in certificated form to be redeemed (in principal amounts of
$1,000 or integral multiples thereof), by lot, on a pro rata basis or by another
method the Trustee deems fair and appropriate. If any Debenture selected for
partial redemption is converted in part after such selection, the converted
portion of
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such Debenture shall be deemed (so far as may be) to be the portion to be
selected for redemption. The Debentures (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Debenture is converted as a whole or in part before the mailing of
the notice of redemption.
Upon any redemption of less than all Debentures, the Company
and the Trustee may (but need not) treat as outstanding any Debentures
surrendered for conversion during the period of fifteen (15) days next preceding
the mailing of a notice of redemption and may (but need not) treat as
outstanding any Debenture authenticated and delivered during such period in
exchange for the unconverted portion of any Debenture converted in part during
such period.
SECTION 3.3. PAYMENT OF DEBENTURES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Debentures or portion of
Debentures with respect to which such notice has been given shall, unless
converted into Common Stock pursuant to the terms hereof, become due and payable
on the date fixed for redemption and at the place or places stated in such
notice at the applicable redemption price, together with interest accrued to
(but excluding) the date fixed for redemption, and on and after said date
(unless the Company shall default in the payment of such Debentures at the
redemption price, together with interest accrued to said date), interest on the
Debentures or portion of Debentures so called for redemption shall cease to
accrue and such Debentures shall cease after the close of business on the
Business Day next preceding the date fixed for redemption to be convertible into
Common Stock and, except as provided in Sections 8.5 and 13.4, to be entitled to
any benefit or security under this Indenture, and the holders thereof shall have
no right in respect of such Debentures except the right to receive the
redemption price thereof and unpaid interest to (but excluding) the date fixed
for redemption. On presentation and surrender of such Debentures at a place of
payment in said notice specified, the said Debentures or the specified portions
thereof shall be paid and redeemed by the Company at the applicable redemption
price, together with interest accrued thereon to (but excluding) the date fixed
for redemption; provided that, if the applicable redemption date is an interest
payment date, the semi-annual payment of interest becoming due on such date
shall be payable to the holders of such Debentures registered as such on the
relevant record date instead of the holders surrendering such Debentures for
redemption on such date.
Upon presentation of any Debenture redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Debenture
or Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem
any Debentures or mail any notice of optional redemption during the continuance
of a default in payment of interest or premium on the Debentures or of any Event
of Default of which, in the case of any Event of Default other than under
Sections 7.1 (a) or 7.1 (b), a Responsible Officer of the Trustee has actual
knowledge. If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Debenture and such
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Debenture shall remain convertible into Common Stock until the principal and
premium, if any, shall have been paid or duly provided for.
SECTION 3.4. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures by an agreement with one or more
investment bankers or other purchasers to purchase such Debentures by paying to
the Trustee in trust for the Debentureholders, on or before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with interest accrued to (but excluding) the date fixed for redemption, of such
Debentures. Notwithstanding anything to the contrary contained in this Article
III, the obligation of the Company to pay the redemption price of such
Debentures, together with interest accrued to (but excluding) the date fixed for
redemption, shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers. If such an agreement is entered into, a
copy of which will be filed with the Trustee prior to the date fixed for
redemption, any Debentures not duly surrendered for conversion by the holders
thereof may, at the option of the Company, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such holders and
(notwithstanding anything to the contrary contained in Article XV) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the date fixed for redemption (and the right to convert any such
Debentures shall be extended through such time), subject to payment of the above
amount as aforesaid. At the written direction of the Company, the Trustee shall
hold and dispose of any such amount paid to it in the same manner as it would
monies deposited with it by the Company for the redemption of Debentures.
Without the Trustee's prior written consent, no arrangement between the Company
and such purchasers for the purchase and conversion of any Debentures shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture.
SECTION 3.5. REDEMPTION AT OPTION OF HOLDERS.
(a) If there shall occur a Fundamental Change, then each
Debentureholder shall have the right, at such holder's option, to require the
Company to redeem all of such holder's Debentures, or any portion thereof that
is an integral multiple of $1,000 principal amount, on the date (the "Repurchase
Date") that is thirty (30) days after the date of the Company Notice (as defined
in Section 3.5(b) below) of such Fundamental Change (or, if such 30th day is not
a Business Day, the next succeeding Business Day) at a redemption price equal to
100% of the principal amount thereof, together with accrued interest to the date
of redemption; provided that, if such Repurchase Date is February 15 or August
15, then the interest payable on such date shall be paid to the holders of
record of the Debentures on the next preceding January 31 or July 31,
respectively.
Upon presentation of any Debenture redeemed in part only, the
Company shall execute and, upon the Company's written direction to the Trustee,
the Trustee shall authenticate and deliver to the holder thereof, at the expense
of the Company, a new Debenture or Debentures, of authorized denominations, in
principal amount equal to the unredeemed portion of the Debentures so presented.
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(b) On or before the tenth day after the occurrence of a
Fundamental Change, the Company, or, at its written request (which must be
received by the Trustee at least five (5) Business Days prior to the date the
Trustee is requested to give notice as described below), the Trustee in the name
of and at the expense of the Company, shall mail or cause to be mailed to all
holders of record on the date of the Fundamental Change a notice (the "Company
Notice") of the occurrence of such Fundamental Change and of the redemption
right at the option of the holders arising as a result thereof. Such notice
shall be mailed in the manner and with the effect set forth in the first
paragraph of Section 3.2. The Company shall also deliver a copy of the Company
Notice to the Trustee at such time as it is mailed to Debentureholders.
Each Company Notice shall specify the circumstances
constituting the Fundamental Change, the Repurchase Date, the price at which the
Company shall be obligated to redeem Debentures, the latest time on the
Repurchase Date by which the holder must exercise the redemption right (the
"Fundamental Change Expiration Time"), that the holder shall have the right to
withdraw any Debentures surrendered prior to the Fundamental Change Expiration
Time, a description of the procedure which a Debentureholder must follow to
exercise such redemption right and to withdraw any surrendered Debentures, the
place or places where the holder is to surrender such holder's Debentures, and
the amount of interest accrued on each Debenture to the Repurchase Date.
No failure of the Company to give the foregoing notices and no
defect therein shall limit the Debentureholders' redemption rights or affect the
validity of the proceedings for the repurchase of the Debentures pursuant to
this Section 3.5.
(c) For a Debenture to be so redeemed at the option of the
holder, the Company must receive at the office or agency of the Company
maintained for that purpose or, at the option of such holder, the Corporate
Trust Office, such Debenture with the form entitled "Option to Elect Repayment
Upon A Fundamental Change" on the reverse thereof duly completed, together with
such Debentures duly endorsed for transfer, on or before the Fundamental Change
Expiration Time. All questions as to the validity, eligibility (including time
of receipt) and acceptance of any Debenture for repayment shall be determined by
the Company, whose determination shall be final and binding absent manifest
error.
(d) On or prior to the Repurchase Date, the Company will
deposit with the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 5.4) an amount of money sufficient to repay on the
Repurchase Date all the Debentures to be repaid on such date at the redemption
price, together with accrued interest to (but excluding) the Repurchase Date;
provided that if such payment is made on the Repurchase Date it must be received
by the Trustee or paying agent, as the case may be, by 10:00 a.m. New York City
time, on such date. Payment for Debentures surrendered for redemption (and not
withdrawn) prior to the Fundamental Change Expiration Time will be made promptly
(but in no event more than five (5) Business Days) following the Repurchase Date
by mailing checks for the amount payable to the holders of such Debentures
entitled thereto as they shall appear on the Debenture register of the Company.
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(e) In the case of a reclassification, change of the
outstanding shares of Common Stock, consolidation, merger, combination, sale or
conveyance to which Section 15.6 applies, in which the Common Stock of the
Company is changed or exchanged as a result into the right to receive stock,
securities or other property or assets (including cash), which includes shares
of Common Stock of the Company or another Person that are, or upon issuance will
be, traded on a United States national securities exchange or approved for
trading on an established automated over-the-counter trading market in the
United States and such shares constitute at the time such change or exchange
becomes effective in excess of 50% of the aggregate fair market value of such
stock, securities or other property or assets (including cash), then the Person
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 Trustee a
supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental indenture complies with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of holders of the Debentures to cause the
Company to repurchase the Debentures following a Fundamental Change, including
without limitation the applicable provisions of this Section 3.5 and the
definitions of Common Stock and Fundamental Change, as appropriate, as
determined in good faith by the Company, to make such provisions apply to the
common stock and the issuer thereof if different from the Company and Common
Stock of the Company (in lieu of the Company and the Common Stock of the
Company).
(f) The Company will comply with the provisions of Rule 13e-4
and any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the redemption rights of the holders of Debentures
in the event of a Fundamental Change.
ARTICLE IV
SUBORDINATION OF DEBENTURES
SECTION 4.1. AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each holder of Debentures issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article IV; and each Person holding any Debenture,
whether upon original issue or upon transfer, assignment or exchange thereof,
accepts and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest
(including Liquidated Damages, if any) on all Debentures (including, but not
limited to, the redemption price with respect to the Debentures called for
redemption in accordance with Section 3.2 or submitted for redemption in
accordance with Section 3.5, as the case may be, as provided in the Indenture)
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be subordinated and subject in right of payment to the prior payment in full of
all Senior Obligations, whether outstanding at the date of this Indenture or
thereafter incurred.
No provision of this Article IV shall prevent the occurrence
of any default or Event of Default hereunder.
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SECTION 4.2. PAYMENTS TO DEBENTUREHOLDERS. No payment shall be made
with respect to the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Debentures (including, but not limited to,
the redemption price with respect to the Debentures to be called for redemption
in accordance with Section 3.2 or submitted for redemption in accordance with
Section 3.5, as the case may be, as provided in this Indenture), except payments
and distributions made by the Trustee as permitted by the first or second
paragraph of Section 4.5, if:
(i) a default in the payment of principal, premium, if any,
interest, rent or other obligations in respect of Senior Obligations occurs and
is continuing (a "Payment Default"), unless and until such Payment Default shall
have been cured or waived or shall have ceased to exist; or
(ii) a default, other than a Payment Default, on any
Designated Senior Obligations occurs and is continuing that then permits holders
of such Designated Senior Obligations to accelerate its maturity and the Trustee
receives a written notice of the default (a "Payment Blockage Notice") from a
holder of Designated Senior Obligations, a Representative of Designated Senior
Obligations or the Company (a "Non-Payment Default").
If the Trustee receives any Payment Blockage Notice pursuant
to clause (ii) above, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section 4.2 unless and until at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No Non-Payment Default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions
in respect of the Debentures, including any past scheduled payments of the
principal of, premium, if any, and interest (including Liquidated Damages, if
any) on such Debentures to which the holders of the Debentures would have been
entitled but for the provisions of this Article IV:
(1) in the case of a Payment Default, on the date upon
which such Payment Default is cured or waived or
ceases to exist, and
(2) in the case of a Non-Payment Default, the earlier of
(a) the date upon which such default is cured or
waived or ceases to exist or (b) 179 days after the
Payment Blockage Notice is received by the Trustee if
the maturity of such Designated Senior Obligations
has not been accelerated and no Payment Default with
respect to any Senior Obligations has occurred which
has not been cured or waived or ceased to exist (in
such event clause (1) above shall instead be
applicable),
unless this Article IV otherwise prohibits the payment or distribution at the
time of such payment or distribution.
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Upon any payment by the Company, or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Obligations shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Obligations, or payment thereof in
accordance with its terms provided for in cash or other payment satisfactory to
the holders of such Senior Obligations before any payment is made on account of
the principal of, premium, if any, or interest (including Liquidated Damages, if
any) on the Debentures (except payments made pursuant to Article XIII from
monies deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding up, liquidation or reorganization);
and upon any such dissolution or winding up or liquidation or reorganization of
the Company or bankruptcy, insolvency, receivership or other proceeding, any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the holders of the
Debentures or the Trustee would be entitled, except for the provision of this
Article IV, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Debentures or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Obligations (pro rata to such holders on the basis of the
respective amounts of Senior Obligations held by such holders, or as otherwise
required by law or a court order) or their representative or representatives, or
to the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Obligations may have been issued, as their respective
interests may appear, to the extent necessary to pay all Senior Obligations in
full, in cash or other payment satisfactory to the holders of such Senior
Obligations, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Obligations, before any payment or distribution is
made to the holders of the Debentures or to the Trustee.
For purposes of this Article IV, the words, "cash, property or
securities" shall not be deemed to include shares of stock 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 Article IV with respect
to the Debentures to the payment of all Senior Obligations which may at the time
be outstanding; provided that (i) the Senior Obligations are assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Obligations are not, without the consent of
such holders, altered by such reorganization or readjustment. The consolidation
of the Company with, or the merger of the Company into, another corporation or
the liquidation or dissolution of the Company following the conveyance or
transfer of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article XII
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 4.2 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article XII.
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In the event of the acceleration of the Debentures because of
an Event of Default, no payment or distribution shall be made to the Trustee or
any holder of Debentures in respect of the principal of, premium, if any, or
interest (including Liquidated Damages, if any) on the Debentures (including,
but not limited to, the redemption price with respect to the Debentures called
for redemption in accordance with Section 3.2 or submitted for redemption in
accordance with Section 3.5, as the case may be, as provided in the Indenture),
except payments and distributions made by the Trustee as permitted by the first
or second paragraph of Section 4.5, until all Senior Obligations have been paid
in full in cash or other payment satisfactory to the holders of Senior
Obligations or such acceleration is rescinded in accordance with the terms of
this Indenture. If payment of the Debentures is accelerated because of an Event
of Default, the Company shall promptly notify holders of Senior Obligations of
the acceleration.
In the event that, notwithstanding the foregoing provisions,
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
4.2, shall be received by the Trustee or the holders of the Debentures before
all Senior Obligations are paid in full in cash or other payment satisfactory to
the holders of such Senior Obligations, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Obligations, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Obligations or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Obligations may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of any Senior Obligations remaining unpaid to the extent necessary to
pay all Senior Obligations in full in cash or other payment satisfactory to the
holders of such Senior Obligations, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Obligations.
Nothing in this Section 4.2 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 8.6. This Section 4.2
shall be subject to the further provisions of Section 4.5.
SECTION 4.3. SUBROGATION OF DEBENTURES. Subject to the payment in full
of all Senior Obligations, the rights of the holders of the Debentures shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior Obligations pursuant to the provisions of this Article IV (equally
and ratably with the holders of all indebtedness of the Company which by its
express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Debentures are subordinated and is entitled
to like rights of subrogation) to the rights of the holders of Senior
Obligations to receive payments or distributions of cash, property or securities
of the Company applicable to the Senior Obligations until the principal,
premium, if any, and interest (including Liquidated Damages, if any) on the
Debentures shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Obligations of any cash,
property or securities to which the holders of the Debentures or the Trustee
would be entitled except for the provisions of this
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Article IV, and no payment over pursuant to the provisions of this Article IV,
to or for the benefit of the holders of Senior Obligations by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Obligations, and the holders of the Debentures, be deemed
to be a payment by the Company to or on account of the Senior Obligations; and
no payments or distributions of cash, property or securities to or for the
benefit of the holders of the Debentures pursuant to the subrogation provisions
of this Article IV, which would otherwise have been paid to the holders of
Senior Obligations shall be deemed to be a payment by the Company to or for the
account of the Debentures. It is understood that the provisions of this Article
IV are and are intended solely for the purposes of defining the relative rights
of the holders of the Debentures, on the one hand, and the holders of the Senior
Obligations, on the other hand.
Nothing contained in this Article IV or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Obligations, and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of,
premium, if any, and interest (including Liquidated Damages, if any) on the
Debentures as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
holders of the Debentures and creditors of the Company other than the holders of
the Senior Obligations, nor shall anything herein or therein prevent the Trustee
or the holder of any Debenture from exercising all remedies otherwise permitted
by applicable law upon default under this Indenture, subject to the rights, if
any, under this Article IV of the holders of Senior Obligations in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.
SECTION 4.4. AUTHORIZATION TO EFFECT SUBORDINATION. Each holder of a
Debenture by the holder's acceptance thereof authorizes and directs the Trustee
on the holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article IV and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.2 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Obligations or their representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Debentures.
SECTION 4.5. NOTICE TO TRUSTEE. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Debentures pursuant to the provisions of this Article
IV. Notwithstanding the provisions of this Article IV or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of monies to or by
the Trustee in respect of the Debentures pursuant to the provisions of this
Article IV, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof at the Corporate Trust Office
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from the Company (in the form of an Officers' Certificate) or a Representative
or a holder or holders of Senior Obligations or from any trustee thereof; and
before the receipt of any such written notice, the Trustee shall be entitled in
all respects to assume that no such facts exist; provided that if on a date not
less than two (2) Business Days prior to the date upon which by the terms hereof
any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest
(including Liquidated Damages, if any) on any Debenture) the Trustee shall not
have received, with respect to such monies, the notice provided for in this
Section 4.5, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to apply monies received to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such prior date.
Notwithstanding anything in this Article IV to the contrary,
nothing shall prevent any payment by the Trustee to the Debentureholders of
monies deposited with it pursuant to Section 13.1, provided such deposit was not
in violation of this Article IV, and any such payment shall not be subject to
the provisions of Section 4.1 or 4.2.
The Trustee shall be entitled to conclusively rely on the
delivery to it of a written notice by a Representative or a person representing
himself to be a holder of Senior Obligations (or a trustee on behalf of such
holder) to establish that such notice has been given by a Representative or a
holder of Senior Obligations or a trustee on behalf of any such holder or
holders. The Trustee shall not be required to make any payment or distribution
to or on behalf of a holder of Senior Obligations pursuant to this Article IV
unless it has received reasonably satisfactory evidence as to the amount of
Senior Obligations held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article IV.
SECTION 4.6. TRUSTEE'S RELATION TO SENIOR OBLIGATIONS. The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article IV in respect of any Senior Obligations at any time held by it, to the
same extent as any other holder of Senior Obligations, and nothing in Section
8.13 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Obligations, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article IV, and no implied covenants or
obligations with respect to the holders of Senior Obligations shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Obligations.
SECTION 4.7. NO IMPAIRMENT OF SUBORDINATION. No right of any present or
future holder of any Senior Obligations to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the
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Company with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof which any such holder may have or otherwise be charged
with.
SECTION 4.8. CERTAIN CONVERSIONS NOT DEEMED PAYMENT. For the purposes
of this Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Debentures in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of, premium, if
any, or interest (including Liquidated Damages, if any) on Debentures or on
account of the purchase or other acquisition of Debentures, and (2) the payment,
issuance or delivery of cash (except in satisfaction of fractional shares
pursuant to Section 15.3), property or securities (other than junior securities)
upon conversion of a Debenture shall be deemed to constitute payment on account
of the principal of, premium, if any, or interest (including Liquidated Damages,
if any) on such Debenture. For the purposes of this Section 4.8, the term
"junior securities" means (a) shares of any stock of any class of the Company or
(b) securities of the Company that are subordinated in right of payment to all
Senior Obligations that may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Debentures are so subordinated as provided in this Article. Nothing
contained in this Article IV or elsewhere in this Indenture or in the Debentures
is intended to or shall impair, as among the Company, its creditors (other than
holders of Senior Obligations) and the Debentureholders, the right, which is
absolute and unconditional, of the Holder of any Debenture to convert such
Debenture in accordance with Article XV.
SECTION 4.9. ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article in addition to or in
place of the Trustee; provided, however, that the first paragraph of Section 4.5
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as paying agent.
The Trustee shall not be responsible for the actions or
inactions of any other paying agents (including the Company if acting as its own
paying agent) and shall have no control of any funds held by such other paying
agents.
SECTION 4.10. SENIOR OBLIGATIONS ENTITLED TO RELY. The holders of
Senior Obligations (including, without limitation, Designated Senior
Obligations) shall have the right to rely upon this Article IV, and no amendment
or modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
SECTION 4.11. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Debentureholders shall be entitled to
conclusively rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the
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benefit of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or to the Debentureholders, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Obligations and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including upon redemption pursuant to
Article III), and interest (including Liquidated Damages, if any) on each of the
Debentures at the places, at the respective times and in the manner provided
herein and in the Debentures. Each installment of interest on the Debentures due
on any semi-annual interest payment date may be paid either (i) by check mailed
to the address of the person entitled thereto as it appears in the Debenture
register; provided that the holder of Debentures with an aggregate principal
amount in excess of $2,000,000 shall, at the written election of such holder, be
paid by wire transfer in immediately available funds; or (ii) by transfer to an
account maintained by such person located in the United States; provided,
however, that payments to the Depositary will be made by wire transfer of
immediately available funds to the account of Depositary or its nominee.
SECTION 5.2. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
an office or agency in The Borough of Manhattan, The City of New York, where the
Debentures may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the office or agency of
the Trustee in The Borough of Manhattan, The City of New York (which shall
initially be located at 450 West 33rd Street, 15th Floor, New York, New York
10001-2697).
The Company may also from time to time designate co-registrars
and one or more other offices or agencies where the Debentures may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as paying
agent, Debenture registrar, Custodian and conversion agent and each of the
Corporate Trust Office of the Trustee
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and the office or agency of the Trustee in The Borough of Manhattan, The City of
New York (which shall initially be located at The Chase Manhattan Bank, 450 West
33rd Street, 15th Floor, New York, New York 10001-2697), shall be considered as
one such office or agency of the Company for each of the aforesaid purposes.
So long as the Trustee is the Debenture registrar, the Trustee
agrees to mail, or cause to be mailed, the notice set forth in Section 8.10(a)
and, if requested by the Company, the notice set forth in the third paragraph of
Section 8.11. If co-registrars have been appointed in accordance with this
Section, the Trustee shall mail such notices only to the Company and the holders
of Debentures it can identify from its records.
SECTION 5.3. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 5.4 PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
5.4:
(1) that it will hold all sums held by it as such
agent for the payment of the principal of and premium, if any, or
interest on the Debentures (whether such sums have been paid to it by
the Company or by any other obligor on the Debentures) in trust for the
benefit of the holders of the Debentures;
(2) that it will give the Trustee written notice of
any failure by the Company (or by any other obligor on the Debentures)
to make any payment of the principal of and premium, if any, or
interest on the Debentures when the same shall be due and payable; and
(3) that at any time during the continuance of an
Event of Default, upon request of the Trustee, it will forthwith pay to
the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Debentures, deposit with the paying agent a
sum sufficient to pay such principal, premium, if any, or interest, and (unless
such paying agent is the Trustee) the Company will promptly notify the Trustee
of any failure to take such action; provided that if such deposit is made on the
due date, such deposit shall be received by the paying agent by 10:00 a.m. New
York City time, on such date.
(b) If the Company shall act as its own paying agent, it will,
on or before each due date of the principal of, premium, if any, or interest
(including Liquidated Damages, if any)
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on the Debentures, set aside, segregate and hold in trust for the benefit of the
holders of the Debentures a sum sufficient to pay such principal, premium, if
any, or interest (including Liquidated Damages, if any) so becoming due and will
notify the Trustee in writing of any failure to take such action and of any
failure by the Company (or any other obligor under the Debentures) to make any
payment of the principal of, premium, if any, or interest (including Liquidated
Damages, if any) on the Debentures when the same shall become due and payable.
(c) Anything in this Section 5.4 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the Company or any
paying agent hereunder as required by this Section 5.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying agent
shall be released from all further liability with respect to such sums.
(d) Anything in this Section 5.4 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
5.4 is subject to Sections 13.3 and 13.4.
The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.
SECTION 5.5. EXISTENCE. Subject to Article XII, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the holders.
SECTION 5.6. MAINTENANCE OF PROPERTIES. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Significant
Subsidiary and not disadvantageous in any material respect to the holders.
SECTION 5.7. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or
discharge, or cause to be paid or discharged, before the same become delinquent,
(i) all taxes, assessments and governmental charges levied or imposed upon the
Company or any Significant Subsidiary or upon the income, profits or property of
the Company or any Significant Subsidiary,
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(ii) all claims for labor, materials and supplies which, if unpaid, might by law
become a lien or charge upon the property of the Company or any Significant
Subsidiary and (iii) all stamps and other duties, if any, which may be imposed
by the United States or any political subdivision thereof or therein in
connection with the issuance, transfer, exchange or conversion of any Debentures
or with respect to this Indenture; provided, however, that, in the case of
clauses (i) and (ii), the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim (A) if
the failure to do so will not, in the aggregate, have a material adverse impact
on the Company, or (B) if the amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 5.8. RULE 144A INFORMATION REQUIREMENT. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof (other than a holder or beneficial holder of Debentures or any Common
Stock issued upon conversion thereof that is an Affiliate of the Company) which
continue to be Restricted Securities in connection with any sale thereof and any
prospective purchaser of Debentures or such Common Stock from such holder or
beneficial holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act upon the request of any holder or beneficial holder of the
Debentures or such Common Stock and it will take such further action as any
holder or beneficial holder of such Debentures or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
holder or beneficial holder to sell its Debentures or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Debentures or such Common
Stock, the Company will deliver to such holder a written statement as to whether
it has complied with such requirements.
SECTION 5.9. STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Debentures as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law has been enacted.
SECTION 5.10. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting
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officer of the Company, stating whether or not to the best knowledge of the
signer thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which the signer may have knowledge.
The Company will deliver to a Responsible Officer of the
Trustee, forthwith upon becoming aware of any default in the performance or
observance of any covenant, agreement or condition contained in this Indenture,
or any Event of Default, an Officers' Certificate specifying with particularity
such default or Event of Default and further stating what action the Company has
taken, is taking or proposes to take with respect thereto.
Any notice required to be given under this Section 5.10 shall
be delivered to the Trustee at its Corporate Trust Office.
ARTICLE VI
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 6.1. DEBENTUREHOLDERS' LISTS. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually, not
more than fifteen (15) days after each January 31 and July 31 in each year
beginning with July 31, 1998, and at such other times as the Trustee may request
in writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Debentures as of a date not more than fifteen (15) days (or such
other date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished by the Company to the Trustee so long as the Trustee is
acting as the sole Debenture registrar.
SECTION 6.2. PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in Section 6.1 or maintained by the Trustee in its capacity as
Debenture registrar or co-registrar in respect of the Debentures, if so acting.
The Trustee may destroy any list furnished to it as provided in Section 6.1 upon
receipt of a new list so furnished.
(b) The rights of Debentureholders to communicate with other
holders of Debentures with respect to their rights under this Indenture or under
the Debentures, and the corresponding rights and duties of the Trustee, shall be
as provided by the Trust Indenture Act.
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(c) Every Debentureholder, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Debentures
made pursuant to the Trust Indenture Act.
SECTION 6.3. REPORTS BY TRUSTEE
(a) Within sixty (60) days after August 15 of each year
commencing with the year 1998, the Trustee shall transmit to holders of
Debentures such reports dated as of August 15 of the year in which such reports
are made concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
(b) A copy of such report shall, at the time of such
transmission to holders of Debentures, be filed by the Trustee with each stock
exchange and automated quotation system upon which the Debentures are listed and
with the Company. The Company will notify the Trustee in writing within a
reasonable time when the Debentures are listed on any stock exchange or
automated quotation system.
SECTION 6.4. REPORTS BY COMPANY. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Debentures, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Debentures are governed by
such Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within fifteen (15) days after the same is so
required to be filed with the Commission. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to conclusively rely exclusively on
Officers' Certificates).
ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON AN EVENT OF DEFAULT
SECTION 7.1. EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
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(a) default in the payment of any installment of interest
(including Liquidated Damages, if any) upon any of the Debentures as and when
the same shall become due and payable, and continuance of such default for a
period of thirty (30) days, whether or not such payment is permitted under
Article IV hereof; or
(b) default in the payment of the principal of or premium, if
any, on any of the Debentures as and when the same shall become due and payable
either at maturity or in connection with any redemption pursuant to Article III,
by acceleration or otherwise, whether or not such payment is permitted under
Article IV hereof; or
(c) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the Company in
the Debentures or in this Indenture (other than a covenant or agreement a
default in whose performance or whose breach is elsewhere in this Section 7.1
specifically dealt with) continued for a period of sixty (60) days after the
date on which written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee, or to the Company
and a Responsible Officer of the Trustee by the holders of at least twenty-five
percent (25%) in aggregate principal amount of the Debentures at the time
outstanding determined in accordance with Section 9.4; or
(d) the Company or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or any Significant Subsidiary or its or such
Significant Subsidiary's debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
Significant Subsidiary or any substantial part of the property of the Company or
any Significant Subsidiary, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it or any Significant Subsidiary, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; provided that a liquidation or winding up
of a Significant Subsidiary pursuant to applicable corporate law shall not be
deemed an Event of Default hereunder; or
(e) an involuntary case or other proceeding shall be commenced
against the Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or any Significant Subsidiary
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any Significant
Subsidiary or any substantial part of the property of the Company or any
Significant Subsidiary, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of ninety (90) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.1 (d) or (e) with respect to the Company), unless the principal of
all of the Debentures shall have already become due and payable, either the
Trustee or the holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Debentures then outstanding hereunder determined in
accordance with Section 9.4, by notice in writing to the Company (and to the
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Trustee if given by Debentureholders), may declare the principal of and premium,
if any, on all the Debentures and the interest accrued thereon (including
Liquidated Damages, if any) to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Debentures contained to the contrary
notwithstanding. If an Event of Default specified in Section 7. 1(d) or (e) with
respect to the Company occurs, the principal of all the Debentures and the
interest accrued thereon (including Liquidated Damages, if any) shall be
immediately and automatically due and payable without necessity of further
action on the part of the Trustee or the Debentureholders. This provision,
however, is subject to the conditions that if, at any time after the principal
of the Debentures shall have been so declared due and payable, and before any
judgment or decree for the payment of the monies due shall have been obtained or
entered as hereinafter provided, the Company shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest upon
(including Liquidated Damages, if any) all Debentures and the principal of and
premium, if any, on any and all Debentures which shall have become due otherwise
than by acceleration (with interest on overdue installments of interest
(including Liquidated Damages, if any) (to the extent that payment of such
interest is enforceable under applicable law) and on such principal and premium,
if any, at the rate borne by the Debentures, to the date of such payment or
deposit) and amounts due to the Trustee pursuant to Section 8.6, and if any and
all defaults under this Indenture, other than the nonpayment of principal of and
premium, if any, and accrued interest on (including Liquidated Damages, if any)
Debentures which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 7.7 -- then and in every such case the holders of a
majority in aggregate principal amount of the Debentures then outstanding, by
written notice to the Company and to the Trustee, may waive all defaults or
Events of Default and rescind and annul such declaration and its consequences;
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify, in writing, a Responsible Officer of the
Trustee, promptly upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.
SECTION 7.2. PAYMENTS OF DEBENTURES ON DEFAULT; SUIT THEREFOR. In the
event that the Trustee or the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Debentures then outstanding hereunder
determined in accordance with Section 9.4 have declared the principal of and
premium, if any, on all the Debentures and the interest accrued thereon
(including Liquidated Damages, if any) to be due and payable immediately in
accordance with Section 7.1, and the Company shall have failed forthwith to pay
such amounts, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute
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any actions or proceedings at law or in equity for the collection of the sums so
due and unpaid (including such further amounts as shall be sufficient to cover
the costs and expenses of collection, including compensation to the Trustee, its
agents, attorneys, custodians, nominees and counsel, and any expenses or
liabilities incurred by the Trustee hereunder other than through its negligence
or bad faith), and may prosecute any such action or proceeding to judgment or
final decree, and may enforce any such judgment or final decree against the
Company or any other obligor on the Debentures and collect in the manner
provided by law out of the property of the Company or any other obligor on the
Debentures wherever situated the monies adjudged or decreed to be payable.
In the case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company or any other obligor on the Debentures
under Title 11 of the United States Code, or any other applicable law, or in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or such other obligor, the property of the
Company or such other obligor, or in the case of any other judicial proceedings
relative to the Company or such other obligor upon the Debentures, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Debentures shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 7.2, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal, premium, if any, and interest (including Liquidated
Damages, if any) owing and unpaid in respect of the Debentures, and, in case of
any judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements, and advances of the Trustee, its agents, and counsel) and of the
Debentureholders allowed in such judicial proceedings relative to the Company or
any other obligor on the Debentures, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.6; and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official in any such judicial proceeding, is hereby authorized by each of the
Debentureholders to make such payments to the Trustee as administrative expenses
associated with any such proceeding, and, in the event that the Trustee shall
consent to the making of such payments directly to the Debentureholders, to pay
to the Trustee any amount due it for reasonable compensation, expenses, advances
and disbursements of the Trustee and its agents, including counsel fees incurred
by it up to the date of such distribution and any other amounts due to the
Trustee under Section 8.6 hereof. To the extent that such payment of reasonable
compensation, expenses, advances and disbursements of the Trustee, its agents,
and counsel, and any other amounts due to the Trustee under Section 8.6 hereof
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Debentures may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall
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be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Debentureholder any plan or reorganization, arrangement,
adjustment or composition affecting the Debentureholder or the rights of any
Debentureholder thereof, or to authorize the Trustee to vote in respect of the
claim of any Debentureholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents, attorneys, custodians, nominees and counsel, be for the ratable
benefit of the holders of the Debentures.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Debentures, and it shall not be necessary to make any holders of the
Debentures parties to any such proceedings.
SECTION 7.3. APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Debentures, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 8.6;
SECOND: Subject to the provisions of Article IV, in case the
principal of the outstanding Debentures shall not have become due and be unpaid,
to the payment of interest on (including Liquidated Damages, if any) the
Debentures in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been collected by
the Trustee) upon the overdue installments of interest (including Liquidated
Damages, if any) at the rate borne by the Debentures, such payments to be made
ratably to the persons entitled thereto;
THIRD: Subject to the provisions of Article IV, in case the
principal of the outstanding Debentures shall have become due, by declaration or
otherwise, and be unpaid to the payment of the whole amount then owing and
unpaid upon the Debentures for principal and premium, if any, and interest
(including Liquidated Damages, if any), with interest on the overdue principal
and premium, if any, and (to the extent that such interest has been collected by
the Trustee) upon overdue installments of interest (including Liquidated
Damages, if any) at the rate borne by the Debentures; and in case such monies
shall be insufficient to pay in full the whole amounts so due and unpaid upon
the Debentures, then to the payment of such principal and premium, if any, and
interest (including Liquidated Damages, if any) without preference or priority
of principal and premium, if any, over interest (including Liquidated Damages,
if any),
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or of interest (including Liquidated Damages, if any) over principal and
premium, if any, or of any installment of interest over any other installment of
interest, or of any Debenture over any other Debenture, ratably to the aggregate
of such principal and premium, if any, and accrued and unpaid interest; and
FOURTH: Subject to the provisions of Article IV, to the
payment of the remainder, if any, to the Company or any other person lawfully
entitled thereto.
SECTION 7.4. PROCEEDINGS BY DEBENTUREHOLDER. No holder of any Debenture
shall have any right by virtue of or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Debentures then outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Debenture with every other
taker and holder and the Trustee, that no one or more holders of Debentures
shall have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Debentures, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures (except as otherwise provided
herein). For the protection and enforcement of this Section 7.4, each and every
Debentureholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and any
provision of any Debenture, the right of any holder of any Debenture to receive
payment of the principal of and premium, if any (including upon redemption
pursuant to Article III), and accrued interest on (including Liquidated Damages,
if any) such Debenture, on or after the respective due dates expressed in such
Debenture or in the event of redemption, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
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SECTION 7.5. PROCEEDINGS BY TRUSTEE. In case of an Event of Default the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 7.6. REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
Section 2.6, all powers and remedies given by this Article VII to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default or Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 7.4, every power and remedy given by this Article VII or
by law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
SECTION 7.7. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY
MAJORITY OF DEBENTUREHOLDERS. The holders of a majority in aggregate principal
amount of the Debentures at the time outstanding determined in accordance with
Section 9.4 shall have the right to direct in writing the time, method, and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided, however, that
(a) such direction shall not be in conflict with any rule of law or with this
Indenture, (b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction and (c) the Trustee may
decline to take any action that would benefit some Debentureholder to the
detriment of other Debentureholders. The holders of a majority in aggregate
principal amount of the Debentures at the time outstanding determined in
accordance with Section 9.4 may on behalf of the holders of all of the
Debentures waive any past default or Event of Default hereunder and its
consequences except (i) a default in the payment of interest or premium, if any,
on, or the principal of, the Debentures which has not been cured pursuant to the
provisions of Section 7.1, (ii) a failure by the Company to convert any
Debentures into Common Stock, (iii) a default in the payment of redemption price
pursuant to Article III or (iv) a default in respect of a covenant or provisions
hereof which under Article XI cannot be modified or amended without the consent
of the holders of all Debentures then outstanding. Upon any such waiver, the
Company, the Trustee and the holders of the Debentures shall be restored to
their former positions and rights hereunder; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall
have been waived as permitted by this Section 7.7, said default or Event of
Default shall for all purposes of the Debentures and this Indenture be
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deemed to have been cured and to be not continuing; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 7.8. NOTICE OF DEFAULTS. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has actual knowledge of the
occurrence of a default, mail to all Debentureholders, as the names and
addresses of such holders appear upon the Debenture register, notice of all
defaults actually known to a Responsible Officer, unless such defaults shall
have been cured or waived before the giving of such notice; and provided that,
except in the case of default in the payment of the principal of, or premium, if
any, or interest (including Liquidated Damages, if any) on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interests of the Debentureholders.
SECTION 7.9. UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section 7.9 (to the
extent permitted by law) shall not apply to any suit instituted by the Trustee,
to any suit instituted by any Debentureholder, or group of Debentureholders,
holding in the aggregate more than ten percent in principal amount of the
Debentures at the time outstanding determined in accordance with Section 9.4, or
to any suit instituted by any Debentureholder for the enforcement of the payment
of the principal of or premium, if any, or interest on any Debenture on or after
the due date expressed in such Debenture or to any suit for the enforcement of
the right to convert any Debenture in accordance with the provisions of Article
XV.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1. DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior
to the occurrence of an Event of Default with respect to the Debentures and
after the curing of all Events of Default with respect to the Debentures which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Debentures has occurred (which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
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No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the Trust
Indenture Act, and the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture and the
Trust Indenture Act against the Trustee; and
(2) in the absence of bad faith and willful misconduct on the
part of the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Debentures at the time outstanding determined as provided in Section 9.4
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture with respect to the Debentures;
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment (as
to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any paying agent or
any records maintained by any co-registrar with respect to the Debentures;
(f) if any party fails to deliver a notice relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred;
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(g) in no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon or for losses incurred as
a result of the liquidation of any such investment prior to its stated maturity
or the failure of the party directing such investment to provide timely written
investment direction, and the Trustee shall have no obligation to invest or
reinvest any amounts held hereunder in the absence of such written investment
direction; and
(h) in the event that the Trustee is also acting as Custodian,
Debenture registrar, paying agent, conversion agent or transfer agent hereunder,
the rights and protections afforded to the Trustee pursuant to this Article VIII
shall also be afforded to such Custodian, Debenture registrar, paying agent,
conversion agent or transfer agent.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not assured to it.
SECTION 8.2. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise
provided in Section 8.1:
(a) the Trustee may conclusively rely and shall be fully protected
in acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, note, debenture, coupon or other
paper or document believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties and the Trustee need not
investigate any fact or matter stated in the document;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) before the Trustee acts or refrains from acting, the Trustee
may consult with counsel and require an Opinion of Counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby;
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(e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, may consent, order, bond, debenture
or other paper or document, but the Trustee, in its discretion, make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed by it with due care hereunder; and
(g) before the Trustee acts or refrains from acting, it may require an
Officers' Certificate and the Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such Officer's Certificate.
SECTION 8.3. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
SECTION 8.4. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY
OWN DEBENTURES. The Trustee, any paying agent, any conversion agent or Debenture
registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Debenture registrar.
SECTION 8.5. MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.4 and Section 4.2, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as may be agreed from time to time by the Company and the Trustee.
SECTION 8.6. COMPENSATION AND EXPENSES OF TRUSTEE. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to in writing between the Company and the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this
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Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence, willful misconduct, recklessness or bad faith. The Company also
covenants to indemnify the Trustee (or any officer, director, agent or employee
of the Trustee) in any capacity under this Indenture and any other documents and
transactions entered into in connection therewith and its agents and any
authenticating agent for, and to hold them harmless against, any loss, liability
or expense incurred without negligence, willful misconduct, recklessness, or bad
faith on the part of the Trustee or such officers, directors, employees and
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim of liability in the premises. The obligations of the Company
under this Section 8.6 to compensate or indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall be secured
by a lien prior to that of the Debentures upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Debentures. The Trustee's right to receive payment of
any amounts due under this Section 8.6 shall not be subordinate to any other
liability or indebtedness of the Company (even though the Debentures may be so
subordinated). The obligation of the Company under this Section shall survive
the satisfaction and discharge of this Indenture and the earlier removal or
resignation of the Trustee.
When the Trustee and its agents and any authenticating agent
incur expenses or render services after an Event of Default specified in Section
7.1(d) or (e) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
SECTION 8.7. OFFICERS' CERTIFICATE AS EVIDENCE. Whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence,
willful misconduct, recklessness, or bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers' Certificate
delivered to the Trustee.
SECTION 8.8. CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
SECTION 8.9. ELIGIBILITY OF TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes
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of this Section, the combined capital and surplus of such person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 8.10. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written
notice of such resignation to the Company and to the holders of Debentures. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment sixty (60) days after
the mailing of such notice of resignation to the Debentureholders, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six (6) months may, subject to the
provisions of Section 7.9, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section
8.8 after written request therefor by the Company or by any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six (6) months; or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.9 and shall fail to resign
after written request therefor by the Company or by any such
Debentureholder; or
(3) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six (6) months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee; provided that if no successor Trustee shall have been appointed and
have accepted appointment sixty (60) days after either the Company or the
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Debentureholders has removed the Trustee, the Trustee so removed may petition
any court of competent jurisdiction for an appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so removed or
any Debentureholder, upon the terms and conditions and otherwise as in Section
8.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 8.10
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.11.
SECTION 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any and all amounts then due and owing to it hereunder, execute
and deliver an instrument transferring to such successor trustee all the rights
and powers of the trustee so ceasing to act. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien
upon all property and funds held or collected by such trustee as such, except
for funds held in trust for the benefit of holders of particular Debentures, to
secure any amounts then due it hereunder.
No successor trustee shall accept appointment as provided in
this Section 8.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.11, the Company (or the former trustee, at the
written direction and at the expense of the Company) shall mail or cause to be
mailed notice of the succession of such trustee hereunder to the holders of
Debentures at their addresses as they shall appear on the Debenture register. If
the Company fails to mail such notice within ten (10) days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
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SECTION 8.12. SUCCESSION BY MERGER, ETC. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee such
corporation shall be qualified under the provisions of Section 8.8 and eligible
under the provisions of Section 8.9.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture, any of the Debentures shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee or
authenticating agent appointed by such predecessor trustee, and deliver such
Debentures so authenticated; and in case at that time any of the Debentures
shall not have been authenticated, any successor to the Trustee or an
authenticating agent appointed by such successor trustee may authenticate such
Debentures either in the name of any predecessor trustee hereunder or in the
name of the successor trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Debentures or in this Indenture
provided that the certificate of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any predecessor Trustee
or authenticate Debentures in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
SECTION 8.14. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY.
Any application by the Trustee for written instructions from the Company (other
than with regard to any action proposed to be taken or omitted to be taken by
the Trustee that affects the rights of the holders of the Debentures or holders
of Senior Obligations under this Indenture, including, without limitation, under
Article IV hereof) may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and
the date on and/or after which such action shall be taken or such omission shall
be effective. The Trustee shall not be liable for any action taken by, or
omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three (3) Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the Trustee shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
ARTICLE IX
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CONCERNING THE DEBENTUREHOLDERS
SECTION 9.1. ACTION BY DEBENTUREHOLDERS. Whenever in this Indenture it
is provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action, the holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article X, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than fifteen (15) days prior to the date of commencement
of solicitation of such action.
SECTION 9.2. PROOF OF EXECUTION BY DEBENTUREHOLDERS. Subject to the
provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Debentures shall be proved by the registry of such
Debentures or by a certificate of the Debenture registrar.
The record of any Debentureholders' meeting shall be proved in
the manner provided in Section 10.6.
SECTION 9.3. WHO ARE DEEMED ABSOLUTE OWNERS. Subject to Section 2.3,
the Company, the Trustee, any paying agent, any conversion agent and any
Debenture registrar may deem the person in whose name such Debenture shall be
registered upon the Debenture register to be, and may treat it as, the absolute
owner of such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and interest on such Debenture, for conversion of such Debenture and for
all other purposes; and neither the Company nor the Trustee nor any paying agent
nor any conversion agent nor any Debenture registrar shall be affected by any
notice to the contrary. All such payments so made to any holder for the time
being, or upon his order, shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for monies payable
upon any such Debenture.
SECTION 9.4. COMPANY-OWNED DEBENTURES DISREGARDED. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any
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other obligor on the Debentures shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent, waiver or other action only Debentures which a
Responsible Officer actually knows are so owned shall be so disregarded.
Debentures so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section 9.4 if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to vote such Debentures
and that the pledgee is not the Company, any other obligor on the Debentures or
any Affiliate of the Company or any such other obligor. In the case of a dispute
as to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. Upon request of the Trustee, the
Company shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Debentures, if any, known by the Company to be owned or held
by or for the account of any of the above described persons; and, subject to
Section 8.1, the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that all
Debentures not listed therein are outstanding for the purpose of any such
determination.
SECTION 9.5. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Debentures specified in this Indenture in connection
with such action, any holder of a Debenture which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee at its Corporate Trust Office and
upon proof of holding as provided in Section 9.2, revoke such action so far as
concerns such Debenture. Except as aforesaid, any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture and of any Debentures
issued in exchange or substitution therefor, irrespective of whether any
notation in regard thereto is made upon such Debenture or any Debenture issued
in exchange or substitution therefor.
ARTICLE X
DEBENTUREHOLDERS' MEETINGS
SECTION 10.1. PURPOSE OF MEETINGS. A meeting of Debentureholders may be
called at any time and from time to time pursuant to the provisions of this
Article X for any of the following purposes:
(1) to give any notice to the Company or to the
Trustee or to give any directions to the Trustee permitted under this
Indenture, or to consent to the waiving of any default or Event of
Default hereunder and its consequences, or to take any other action
authorized to be taken by Debentureholders pursuant to any of the
provisions of Article VII;
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(2) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article VIII;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
11.2; or
(4) to take any other action authorized to be taken
by or on behalf of the holders of any specified aggregate principal
amount of the Debentures under any other provision of this Indenture or
under applicable law.
SECTION 10.2. CALL OF MEETINGS BY TRUSTEE. The Trustee may, at the
expense of the Company, at any time call a meeting of Debentureholders to take
any action specified in Section 10.1, to be held at such time and at such place
as the Trustee shall determine. Notice of every meeting of the Debentureholders,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting and the establishment of any record
date pursuant to Section 9.1, shall be mailed to holders of Debentures at their
addresses as they shall appear on the Debenture register. Such notice shall also
be mailed to the Company. Such notices shall be mailed not less than twenty (20)
nor more than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice
if the holders of all Debentures then outstanding are present in person or by
proxy or if notice is waived before or after the meeting by the holders of all
Debentures outstanding, and if the Company and the Trustee are either present by
duly authorized representatives or have, before or after the meeting, waived
notice.
SECTION 10.3. CALL OF MEETINGS BY COMPANY OR DEBENTUREHOLDERS. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent (10%) in aggregate principal amount of the
Debentures then outstanding, shall have requested the Trustee to call a meeting
of Debentureholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within twenty (20) days after receipt of such
request, then the Company or such Debentureholders may determine the time and
the place for such meeting and call such meeting to take any action authorized
in Section 10.1, by mailing notice thereof as provided in Section 10.2.
SECTION 10.4. QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Debentureholders a person shall (a) be a holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a holder of one or more
Debentures. The only persons who shall be entitled to be present or to speak at
any meeting of Debentureholders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.
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SECTION 10.5. REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures 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 think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Debentureholders as provided in Section 10.3, in which case
the Company or the Debentureholders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 9.4, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Debenture
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
10.2 or 10.3 may be adjourned from time to time by the holders of a majority of
the aggregate principal amount of Debentures represented at the meeting, whether
or not constituting a quorum, and the meeting may be held as so adjourned
without further notice.
SECTION 10.6. VOTING. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the principal amount of the Debentures held or
represented by them. The permanent chairman 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 duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Debentureholders 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 mailed as provided in Section 10.2. The record shall show the
principal amount of the Debentures voting in favor of or against any resolution.
The record shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
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Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 10.7. NO DELAY OF RIGHTS BY MEETING. Nothing in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
DEBENTUREHOLDERS. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee, at the Company's expense, may from time to time
and at any time enter into an indenture or indentures supplemental hereto for
one or more of the following purposes:
(b) to make provision with respect to the conversion rights of
the holders of Debentures pursuant to the requirements of Section 15.6 and the
redemption obligations of the Company pursuant to the requirements of Section
3.5(e);
(b) subject to Article IV, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Debentures, any property
or assets;
(c) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article XII;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the Trustee
shall consider to be for the benefit of the holders of Debentures, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of
Debentures in coupon form (including Debentures registrable as to principal
only) and to provide for exchangeability of such Debentures with the Debentures
issued hereunder in fully registered form and to make all appropriate changes
for such purpose;
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(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture which shall not materially adversely
affect the interests of the holders of the Debentures;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debentures; or
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
Upon the written request of the Company, accompanied by a copy
of the resolutions of the Board of Directors certified by its Secretary or
Assistant Secretary authorizing the execution of any supplemental indenture, the
Trustee is hereby authorized to join with the Company in the execution of any
such supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 11.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Debentures at the time outstanding,
notwithstanding any of the provisions of Section 11.2.
Notwithstanding any other provision of the Indenture or the
Debentures, the Registration Rights Agreement and the obligation to pay
Liquidated Damages thereunder may be amended, modified or waived in accordance
with the provisions of the Registration Rights Agreement.
SECTION 11.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS.
With the consent (evidenced as provided in Article IX) of the holders of not
less than a majority in aggregate principal amount of the Debentures at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, at the Company's expense, from time to time and
at any time enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debenture, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof or premium, if any, thereon, or
reduce any amount payable on redemption thereof, or impair the right of any
Debentureholder to institute suit for the payment thereof, or make the principal
thereof or interest or premium, if any, thereon payable in any coin or currency
other than that provided in the
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Debentures, or modify the provisions of this Indenture with respect to the
subordination of the Debentures in a manner adverse to the Debentureholders in
any material respect, or change the obligation of the Company to redeem any
Debenture upon the happening of a Fundamental Change in a manner adverse to the
holder of Debentures, or impair the right to convert the Debentures into Common
Stock subject to the terms set forth herein including Section 15.6, in each
case, without the consent of the holder of each Debenture so affected, or (ii)
reduce the aforesaid percentage of Debentures, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of all Debentures then outstanding.
Upon the written request of the Company, accompanied by a copy
of the resolutions of the Board of Directors certified by its Secretary or
Assistant Secretary authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Debentureholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the
Debentureholders under this Section 11.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental
indenture executed pursuant to the provisions of this Article XI shall comply
with the Trust Indenture Act, as then in effect; provided that this Section 11.3
shall not require such supplemental indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act, nor shall it constitute any admission
or acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article XI, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights; obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Debentures
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 11.4. NOTATION ON DEBENTURES. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article XI may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
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modification of this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee (or an authenticating agent duly appointed by the Trustee
pursuant to Section 16.11) and delivered in exchange for the Debentures then
outstanding, upon surrender of such Debentures then outstanding.
SECTION 11.5. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. Prior to entering into any supplemental indenture, the
Trustee may request an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.1. COMPANY MAY CONSOLIDATE ETC. ON CERTAIN TERMS. Subject to
the provisions of Section 12.2 and notwithstanding anything to the contrary in
this Indenture, the Company shall not consolidate or merge with or into any
other Person (whether or not affiliated with the Company), or sale, convey or
lease all or substantially all of its assets or properties to any Person unless
the Person formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance or transfer, or which leases the assets
or properties of the Company substantially as an entirety shall be a corporation
organized under the laws of the United States of America, any state thereof or
the District of Columbia. Further, upon any such consolidation, merger, sale,
conveyance or lease, the due and punctual payment of the principal of and
premium, if any, and interest (including Liquidated Damages, if any) on all of
the Debentures, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the corporation (if other than the Company) formed by such consolidation, or
into which the Company shall have been merged, or by the corporation which shall
have acquired or leased such property, and such supplemental indenture shall
provide for the applicable conversion rights set forth in Section 15.6.
SECTION 12.2. SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Debentures and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of Sepracor Inc. any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation
instead of the
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Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause
to be authenticated and delivered, any Debentures which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debentures which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance or lease, the person named as the
"Company" in the first paragraph of this Indenture or any successor which shall
thereafter have become such in the manner prescribed in this Article XII may be
dissolved, wound up and liquidated at any time thereafter and such person shall
be released from its liabilities as obligor and maker of the Debentures and from
its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or
lease, such changes in phraseology and form (but not in substance) may be made
in the Debentures thereafter to be issued as may be appropriate.
SECTION 12.3. OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.1. DISCHARGE OF INDENTURE. When (a) the Company shall
deliver to the Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures which have been destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the Debentures not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption of all of the Debentures (other than any Debentures
which shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to such date of maturity or redemption date, as the case may be,
accompanied by a verification report, as to the sufficiency of the deposited
amount, from an independent certified accountant or other financial professional
satisfactory to the Trustee, and if the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights
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of registration of transfer, substitution and exchange and conversion of
Debentures, (ii) rights hereunder of Debentureholders to receive payments of
principal of and premium, if any, and interest on, the Debentures and the other
rights, duties and obligations of Debentureholders, as beneficiaries hereof with
respect to the amounts, if any, so deposited with the Trustee, (iii) the rights,
obligations and immunities of the Trustee hereunder and (iv) the obligations of
the Company under Section 8.6), and the Trustee, on written demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 16.5 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; the Company, however, hereby agreeing to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
and to compensate the Trustee for any services thereafter reasonably and
properly rendered by the Trustee in connection with this Indenture or the
Debentures.
SECTION 13.2. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject
to Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1,
provided such deposit was not in violation of Article IV, shall be held in trust
for the sole benefit of the Debentureholders and shall not be subject to the
subordination provisions of Article IV, and such monies shall be applied by the
Trustee to the payment, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Debentures for the payment or redemption of which such monies have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest and premium, if any.
SECTION 13.3. PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Debentures (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
SECTION 13.4. RETURN OF UNCLAIMED MONIES. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Debentures and not applied
but remaining unclaimed by the holders of Debentures for two years after the
date upon which the principal of, premium, if any, or interest on such
Debentures, as the case may be, shall have become due and payable, shall be
repaid to the Company by the Trustee on written demand and all liability of the
Trustee shall thereupon cease with respect to such monies; and the holder of any
of the Debentures shall thereafter look only to the Company for any payment
which such holder may be entitled to collect unless an applicable abandoned
property law designates another Person.
SECTION 13.5. REINSTATEMENT. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.2 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 13.1 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with Section
13.2; provided,
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however, that if the Company makes any payment of interest on or principal of
any Debenture following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the holders of such Debentures to receive such
payment from the money held by the Trustee or paying agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.1. INDENTURE AND DEBENTURES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of or premium, if any, or interest on
any Debenture, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in any Debenture,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer, or director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Debentures.
ARTICLE XV
CONVERSION OF DEBENTURES
SECTION 15.1. RIGHT TO CONVERT. Subject to and upon compliance with the
provisions of this Indenture, including without limitation Article IV, the
holder of any Debenture shall have the right, at its option, at any time after
ninety (90) days following the latest date of original issuance thereof through
the close of business on February 15, 2005 (except that, with respect to any
Debenture or portion of a Debenture which shall be called for redemption, such
right shall terminate, except as provided in Section 15.2 or Section 3.4, at the
close of business on the Business Day next preceding the date fixed for
redemption of such Debenture or portion of a Debenture unless the Company shall
default in payment due upon redemption thereof) to convert the principal amount
of any such Debenture, or any portion of such principal amount which is $1,000
or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
obtained by dividing the principal amount of the Debenture or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Debenture so to be converted in whole or in part in the manner
provided, together with any required funds, in Section 15.2. A Debenture in
respect of which a holder is exercising its option to require redemption upon a
Fundamental Change pursuant to Section 3.5 may be converted only if such holder
withdraws its election to exercise in accordance with Section 3.5. A holder of
Debentures is not entitled to any rights of a holder of Common Stock until such
holder has converted his Debentures to Common Stock, and only
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to the extent such Debentures are deemed to have been converted to Common Stock
under this Article XV.
SECTION 15.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON
STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to
exercise the conversion privilege with respect to any Debenture in certificated
form, the holder of any such Debenture to be converted in whole or in part shall
surrender such Debenture, duly endorsed, at an office or agency maintained by
the Company pursuant to Section 5.2, accompanied by the funds, if any, required
by the penultimate paragraph of this Section 15.2, and shall give written notice
of conversion in the form provided on the Debentures (or such other notice which
is acceptable to the Company) to the office or agency that the holder elects to
convert such Debenture or the portion thereof specified in said notice. Such
notice shall also state the name or names (with address or addresses) in which
the certificate or certificates for shares of Common Stock which shall be
issuable on such conversion shall be issued, and shall be accompanied by
transfer taxes, if required pursuant to Section 15.7. Each such Debenture
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the registration of such Debenture, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any
interest in a Debenture in global form, the holder must complete the appropriate
instruction form for conversion pursuant to the Depository's book-entry
conversion program, deliver by book-entry delivery an interest in such Debenture
in global form, furnish appropriate endorsements and transfer documents if
required by the Company or the Trustee or conversion agent, and pay the funds,
if any, required by this Section 15.2 and any transfer taxes if required
pursuant to Section 15.7.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Debentureholder (as if such transfer were a transfer of the
Debenture or Debentures (or portion thereof) so converted), the Company shall
issue and shall deliver to such holder at the office or agency maintained by the
Company for such purpose pursuant to Section 5.2, a certificate or certificates
for the number of full shares of Common Stock issuable upon the conversion of
such Debenture or portion thereof in accordance with the provisions of this
Article and a check or cash in respect of any fractional interest in respect of
a share of Common Stock arising upon such conversion, as provided in Section
15.3. In case any Debenture of a denomination greater than $1,000 shall be
surrendered for partial conversion, and subject to Section 2.3, the Company
shall execute and the Trustee shall authenticate and deliver to the holder of
the Debenture so surrendered, at the Company's expense, a new Debenture or
Debentures in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to
any such Debenture (or portion thereof) on the date on which the requirements
set forth above in this Section 15.2 have been satisfied as to such Debenture
(or portion thereof), and the person in whose name any
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certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become on said date the holder of record
of the shares represented thereby; provided, however, that any such surrender on
any date when the stock transfer books of the Company shall be closed shall
constitute the person in whose name the certificates are to be issued as the
record holder thereof for all purposes on the next succeeding day on which such
stock transfer books are open, but such conversion shall be at the Conversion
Price in effect on the date upon which such Debenture shall be surrendered.
Any Debenture or portion thereof surrendered for conversion
during the period from (but excluding) a record date for any interest payment
date to (but excluding) such interest payment date shall (unless such Debenture
or portion thereof being converted shall have been called for redemption on a
redemption date which occurs during such period) be accompanied by payment, in
New York Clearing House funds or other funds acceptable to the Company, of an
amount equal to the interest otherwise payable on such interest payment date on
the principal amount being converted; provided, however, that no such payment
need be made if there shall exist at the time of conversion a default in the
payment of interest on the Debentures. Except as provided above in this Section
15.2, no payment or other adjustment shall be made for interest accrued on any
Debenture converted or for dividends on any shares issued upon the conversion of
such Debenture as provided in this Article.
Upon the conversion of an interest in a Debenture in global
form, the Trustee (or other conversion agent appointed by the Company), or the
Custodian at the direction of the Trustee (or other conversion agent appointed
by the Company), shall make a notation on such Debenture in global form as to
the reduction in the principal amount represented thereby. The Company shall
notify the Trustee in writing of any conversions of Debentures effected through
any conversion agent other than the Trustee.
SECTION 15.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Debentures. If more than one Debenture shall be surrendered
for conversion at one time by the same holder, the number of full shares which
shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Debentures (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Debenture or Debentures, the
Company shall make an adjustment and payment therefor in cash at the current
market price thereof to the holder of Debentures. The current market price of a
share of Common Stock shall be the Closing Price on the last Business Day
immediately preceding the day on which the Debentures (or specified portions
thereof) are deemed to have been converted.
SECTION 15.4. CONVERSION PRICE. The conversion price shall be as
specified in the form of Debenture (herein called the "Conversion Price")
attached as Exhibit A hereto, subject to adjustment as provided in this Article
XV.
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SECTION 15.5. ADJUSTMENT OF CONVERSION PRICE. The Conversion Price
shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make
a distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on the
date following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced 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 constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.5(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date fixed
for determination of stockholders entitled to receive such rights or warrants 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 determination of
stockholders entitled to receive such rights and warrants plus the number of
shares which the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on the
date fixed for determination of stockholders entitled to receive such rights and
warrants plus the total number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall be successively made whenever
any such rights and warrants are issued, and shall become effective immediately
after the opening of business on the day following the date fixed for
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. 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 date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common
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Stock at less than such Current Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into account
any consideration received by the Company for such rights or warrants, the value
of such consideration, if other than cash, to be determined in good faith by the
Board of Directors.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company (other than any dividends or distributions to which Section
15.5(a) applies) or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in Section 15.5(b),
and excluding any dividend or distribution (x) paid exclusively in cash or (y)
referred to in Section 15.5(a) (any of the foregoing hereinafter in this Section
15.5(d) called the "Securities")), then, in each such case (unless the Company
elects to reserve such Securities for distribution to the Debentureholders upon
the conversion of the Debentures so that any such holder converting Debentures
will receive upon such conversion, in addition to the shares of Common Stock to
which such holder is entitled, the amount and kind of such Securities which such
holder would have received if such holder had converted its Debentures into
Common Stock immediately prior to the Record Date (as defined in Section 15.5(h)
for such distribution of the Securities), the Conversion Price shall be reduced
so that the same shall be equal to the price determined by multiplying the
Conversion Price in effect on the Record Date with respect to such distribution
by a fraction of which the numerator shall be the Current Market Price per share
of the Common Stock on such Record Date less the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive, and described in a resolution of the Board of Directors) on the
Record Date of the portion of the Securities so distributed applicable to one
share of Common Stock and the denominator shall be the Current Market Price per
share of the Common Stock, such reduction to become effective immediately prior
to the opening of business on the day following such Record Date; provided,
however, that in the event the fair market value (as so determined) of the
portion of the Securities so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price of the Common Stock on the
Record Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Debentureholder shall have the right to receive upon
conversion the amount of Securities such holder would have received had such
holder converted each Debenture on the Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value
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of any distribution for purposes of this Section 15.5(d) by reference to the
actual or when issued trading market for any securities, it must in doing so
consider the prices in such market over the same period used in computing the
Current Market Price of the Common Stock.
Rights or warrants distributed by the Company to all holders
of Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"): (i) are deemed to be transferred with such
shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in
respect of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 15.5 (and no adjustment to the
Conversion Price under this Section 15.5 will be required) until the occurrence
of the earliest Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate adjustment (if any is
required) to the Conversion Price shall be made under this Section 15.5(d). If
any such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events, upon the
occurrence of which such rights or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets, then the date
of the occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 15.5
was made, (1) in the case of any such rights or warrants which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder or holders of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights or warrants which shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.
Notwithstanding the foregoing, in the event that the Company
shall distribute rights or warrants to subscribe for additional shares of the
Common Stock (other than rights or warrants described in Section 15.5(b)), pro
rata to holders of Common Stock, the Company may, in lieu of making any
adjustment pursuant to this Section 15.5(d), make proper provision so that each
holder of a Debenture who converts such Debenture (or any portion thereof) after
the record date for such distribution shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable upon such
conversion (the "Conversion Shares"), a number of rights or warrants to be
determined as follows: (i) if such conversion occurs on or prior to the date for
the distribution to the holders of such rights or warrants of separate
certificates evidencing such rights or warrants (the "Distribution Date"), the
same number of rights or warrants to which a
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holder of a number of shares of Common Stock equal to the number of Conversion
Shares is entitled at the time of such conversion in accordance with the terms
and provisions of and applicable to such rights or warrants; and (ii) if such
conversion occurs after the Distribution Date, the same number of rights or
warrants to which a holder of the number of shares of Common Stock into which
the principal amount of the Debenture so converted was convertible immediately
prior to the Distribution Date would have been entitled on the Distribution Date
in accordance with the terms and provisions of, and applicable to such rights or
warrants.
For purposes of this Section 15.5(d) and Sections 15.5(a) and
(b), any dividend or distribution to which this Section 15.5(d) is applicable
that also includes shares of Common Stock, or rights or warrants to subscribe
for or purchase shares of Common Stock (or both), shall be deemed instead to be
(1) a dividend or distribution of the evidences of indebtedness, assets or
shares of capital stock other than such shares of Common Stock or rights or
warrants (and any Conversion Price reduction required by this Section 15.5(d)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 15.5(a) and (b) with respect to such dividend or distribution shall
then be made), except (A) the Record Date of such dividend or distribution shall
be substituted as "the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution" and "the date fixed for such
determination" within the meaning of Sections 15.5(a) and (b) and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such determination"
within the meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (x) any quarterly
cash dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed the greater of (A)
the amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require any adjustment of the Conversion Price pursuant to this
Section 15.5(e) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (B) 3.75% of the arithmetic average of the Closing Price
(determined as set forth in Section 15.5(h)) during the ten (10) Trading Days
(as defined in Section 15.5(h)) immediately prior to the date of declaration of
such dividend, and (y) any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on such Record Date by a
fraction of which the numerator shall be the Current Market Price of the Common
Stock on the Record Date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of Common Stock and the
denominator shall be such Current Market Price of the Common Stock, such
reduction to be effective immediately prior to the opening of business on the
day following the Record Date; provided, however, that in the event the portion
of the cash so distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price of the Common Stock on the Record Date,
in lieu of
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the foregoing adjustment, adequate provision shall be made so that each
Debentureholder shall have the right to receive upon conversion the amount of
cash such holder would have received had such holder converted each Debenture on
the Record Date. In the event that such dividend or distribution is not so paid
or made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not been
declared. If any adjustment is required to be made as set forth in this Section
15.5(e) as a result of a distribution that is a quarterly dividend, such
adjustment shall be based upon the amount by which such distribution exceeds the
amount of the quarterly cash dividend permitted to be excluded pursuant hereto.
If an adjustment is required to be made as set forth in this Section 15.5(e)
above as a result of a distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the distribution.
(f) In case a tender or exchange offer made by the Company or
any Subsidiary for all or any portion of the Common Stock (other than tender or
exchange offers for less than fifteen percent (15%) of the outstanding shares of
Common Stock of the Company) shall expire and such tender or exchange offer (as
amended upon the expiration thereof) shall require the payment to stockholders
of consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors) that as of the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it may be amended) that exceeds the Current Market
Price of the Common Stock on the Trading Day next succeeding the Expiration
Time, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the Expiration Time by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding (including any tendered or exchanged
shares) on the Expiration Time multiplied by the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become effective immediately
prior to the opening of business on the day following the Expiration Time. In
the event that the Company is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Company is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a person
other than the Company or any Subsidiary for an amount which increases the
offeror's ownership of Common Stock to more than twenty-five percent (25%) of
the Common Stock outstanding and shall
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involve the payment by such person of consideration per share of Common Stock
having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the Board of
Directors) at the last time (the "Offer Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have been
amended) that exceeds the Current Market Price of the Common Stock on the
Trading Day next succeeding the Offer Expiration Time, and in which, as of the
Offer Expiration Time the Board of Directors is not recommending rejection of
the offer, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the Offer Expiration Time by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding (including any tendered or
exchanged shares) on the Offer Expiration Time multiplied by the Current Market
Price of the Common Stock on the Trading Day next succeeding the Offer
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Offer Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Accepted Purchased Shares") and
(y) the product of the number of shares of Common Stock outstanding (less any
Accepted Purchased Shares) on the Offer Expiration Time and the Current Market
Price of the Common Stock on the Trading Day next succeeding the Offer
Expiration Time, such reduction to become effective immediately prior to the
opening of business on the day following the Offer Expiration Time. In the event
that such person is obligated to purchase shares pursuant to any such tender or
exchange offer, but such person is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 15.5(g) shall not be made
if, as of the Offer Expiration Time, the offering documents with respect to such
offer disclose a plan or intention to cause the Company to engage in any
transaction described in Article XII; provided, however, that if such
transaction is not consummated within twelve (12) months of the Offer Expiration
time, the adjustment described in this Section 15.5(g) shall be made.
(h) For purposes of this Section 15.5, the following
terms shall have the meaning indicated:
(1) "Closing Price" with respect to any securities on
any day shall mean the closing sale price regular way on such day or,
in case no such sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in each case on the
New York Stock Exchange, or, if such security is not listed or admitted
to trading on such Exchange, on the principal national security
exchange or quotation system on which such security is quoted or listed
or admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the
average of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or if not so available, in such manner
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as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors for that purpose, or a price
determined in good faith by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.
(2) "Current Market Price" shall mean the average of
the daily Closing Prices per share of Common Stock for the ten (10)
consecutive Trading Days immediately prior to the date in question;
provided, however, that (1) if the "ex" date (as hereinafter defined)
for any event (other than the issuance or distribution or Fundamental
Change requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f)
or (g) occurs during such ten (10) consecutive Trading Days, the
Closing Price for each Trading Day prior to the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
same fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (2) if the "ex" date for any
event (other than the issuance, distribution or Fundamental Change
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f)
or (g) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the Conversion Price
is so required to be adjusted as a result of such other event, and (3)
if the "ex" date for the issuance, distribution or Fundamental Change
requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause (1) or
(2) of this proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount of any
cash and the fair market value (as determined by the Board of Directors
or, to the extent permitted by applicable law, a duly authorized
committee thereof in a manner consistent with any determination of such
value for purposes of Section 15.5(d), (f) or (g), whose determination
shall be conclusive and described in a resolution of the Board of
Directors or such duly authorized committee thereof, as the case may
be) of the evidences of indebtedness, shares of capital stock or assets
being distributed applicable to one share of Common Stock as of the
close of business on the day before such "ex" date. For purposes of any
computation under Section 15.5(f) or (g), the Current Market Price of
the Common Stock on any date shall be deemed to be the average of the
daily Closing Prices per share of Common Stock for such day and the
next two succeeding Trading Days; provided, however, that if the "ex"
date for any event (other than the tender or exchange offer requiring
such computation) that requires an adjustment to the Conversion Price
pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs on
or after the Expiration Time or Offer Expiration Time, as the case may
be, for the tender or exchange offer requiring such computation and
prior to the day in question, the Closing Price for. each Trading Day
on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by
which the Conversion Price is so required to be adjusted as a result of
such other event. For purposes of this paragraph, the term "ex" date,
(1) when used with respect to any issuance or distribution,
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means the first date on which the Common Stock trades regular way on
the relevant exchange or in the relevant market from which the Closing
Price was obtained without the right to receive such issuance or
distribution, (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which
the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes
effective, and (3) when used with respect to any tender or exchange
offer means the first date on which the Common Stock trades regular way
on such exchange or in such market after the Offer Expiration Time of
such offer.
(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length
transaction.
(4) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which the
holders of Common Stock have the right to receive any cash, securities
or other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable
security is listed or admitted for trading on the New York Stock
Exchange or another national security exchange, a day on which the New
York Stock Exchange or another national security exchange is open for
business or (y) if the applicable security is quoted on the Nasdaq
National Market, a day on which trades may be made on thereon or (z) if
the applicable security is not so listed, admitted for trading or
quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(i) The Company may make such reductions in the
Conversion Price, in addition to those required by Sections 15.5 (a), (b), (c),
(d), (e), (f) or (g) as the Board of Directors considers to be advisable to
avoid or diminish any income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.
To the extent permitted by applicable law, the Company from
time to time may reduce the Conversion Price by any amount for any period of
time if the period is at least twenty (20) days, the reduction is irrevocable
during the period and the Board of Directors shall have made a determination
that such reduction would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to holders of record
of the Debentures a notice of the reduction at least fifteen (15) days prior to
the date the reduced Conversion Price takes effect,
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and such notice shall state the reduced Conversion Price and the period during
which it will be in effect.
(j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in such price; provided, however, that any adjustments which by
reason of this Section 15.5(j) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article XV shall be made by the Company and shall be made to the
nearest cent or to the nearest one-hundredth (1/100) of a share, as the case may
be. No adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. To the extent the
Debentures become convertible into cash, assets, property or securities (other
than capital stock of the Company), no adjustment need be made thereafter as to
the cash, assets, property or such securities. Interest will not accrue on the
cash.
(k) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee and any conversion
agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to the holder of each Debenture at his last
address appearing on the Debenture register provided for in Section 2.5 of this
Indenture within twenty (20) days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of any such adjustment.
(l) In any case in which this Section 15.5 provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
holder of any Debenture converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and
above the Common Stock issuable upon such conversion before giving effect to
such adjustment and (ii) paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 15.3.
(m) For purposes of this Section 15.5, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
SECTION 15.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.5(c) applies), (ii) any consolidation, merger or
combination of the Company with another corporation as a result
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of which holders of Common Stock shall be entitled to receive stock, securities
or other property or assets (including cash) with respect to or in exchange for
such Common Stock, or (iii) any sale or conveyance of the properties and assets
of the Company as, or substantially as, an entirety to any other corporation as
a result of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, then the Company or the successor or purchasing
corporation, as the case may be, shall execute with the Trustee a supplemental
indenture (which shall comply with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) providing that such Debenture
shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
by a holder of a number of shares of Common Stock issuable upon conversion of
such Debentures (assuming, for such purposes, a sufficient number of authorized
shares of Common Stock available to convert all such Debentures) immediately
prior to such reclassification, change, consolidation, merger, combination, sale
or conveyance assuming such holder of Common Stock did not exercise his rights
of election, if any, as to the kind or amount of securities, cash or other
property receivable upon such consolidation, merger, statutory exchange, sale or
conveyance (provided that, if the kind or amount of securities, cash or other
property receivable upon such consolidation, merger, statutory exchange, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("nonelecting share")),
then for the purposes of this Section 15.6 the kind and amount of securities,
cash or other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance for each non-electing share shall be deemed to be
the kind and amount so receivable per share by a plurality of the non-electing
shares. Such supplemental indenture shall provide for adjustments which shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each holder of Debentures, at its address
appearing on the Debenture register provided for in Section 2.5 of this
Indenture, within twenty (20) days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of such supplemental
indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 15.6 applies to any event or occurrence,
Section 15.5 shall not apply.
SECTION 15.7. TAXES ON SHARES ISSUED. The issue of stock certificates
on conversions of Debentures shall be made without charge to the converting
Debentureholder for any tax in respect of the issue thereof. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Debenture converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the person or
persons requesting the
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issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 15.8. RESERVATION OF SHARES; SHARES TO BE FULLY PAID;
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Debentures from time to time as such Debentures are
presented for conversion.
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value, if any, of the shares of
Common Stock issuable upon conversion of the Debentures, the Company will take
all corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue shares of such Common Stock
at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Debentures will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be.
The Company further covenants that if at any time the Common
Stock shall be listed on the Nasdaq National Market or any other national
securities exchange or automated quotation system the Company will, if permitted
by the rules of such exchange or automated quotation system, list and keep
listed, so long as the Common Stock shall be so listed on such exchange or
automated quotation system, all Common Stock issuable upon conversion of the
Debentures; provided, however, that if rules of such exchange or automated
quotation system permit the Company to defer the listing of such Common Stock
until the first conversion of the Debentures into Common Stock in accordance
with the provisions of this Indenture, the Company covenants to list such Common
Stock issuable upon conversion of the Debentures in accordance with the
requirements of such exchange or automated quotation system at such time.
SECTION 15.9. RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Debentures to determine the Conversion Price or whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not 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
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upon the conversion of any Debenture; and the Trustee and any other conversion
agent make no representations with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Debenture for the
purpose of conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article. Without limiting the
generality of the foregoing, neither the Trustee nor any conversion agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 15.6
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Debentureholders upon the conversion of
their Debentures after any event referred to in such Section 15.6 or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Section 8.1, may accept as conclusive evidence of the correctness of any such
provisions, and shall be fully protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
SECTION 15.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Price pursuant to Section 15.5; or
(b) the Company shall authorize the granting to the holders of
all or substantially all of its Common Stock of rights or warrants to subscribe
for or purchase any share of any class of its capital stock or any other rights
or warrants; or
(c) of any reclassification or reorganization of the Common
Stock of the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company or any Significant Subsidiary; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company or any Significant Subsidiary;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Debenture register provided
for in Section 2.5 of this Indenture, as promptly as possible but in any event
at least fifteen (15) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or 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 or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is
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expected to become effective or occur, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.1. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
SECTION 16.2. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 16.3. ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Debentures on the Company shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Sepracor Inc., 111 Locke Drive, Marlborough, MA 01752, Attention:
Chief Financial Officer. Any notice, direction, request or demand hereunder to
or upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or served by being deposited postage prepaid by
registered or certified mail in a post office letter box addressed to the
Corporate Trust Office, which office is, at the date as of which this Indenture
is dated, located at The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor,
New York, New York 10001-2697, Attention: Global Trust Services.
The Trustee, by notice to the Company, may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Debentureholder shall
be mailed to him by first class mail, postage prepaid, at his address as it
appears on the Debenture register and shall be sufficiently given to him if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Debentureholder
or any defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or
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communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 16.4. GOVERNING LAW. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of The Commonwealth of
Massachusetts, and for all purposes shall be construed in accordance with the
laws of The Commonwealth of Massachusetts.
SECTION 16.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based: (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 16.6. LEGAL HOLIDAYS. In any case where the date of maturity of
interest on or principal of the Debentures or the date fixed for redemption of
any Debenture will not be a Business Day, then payment of such interest on or
principal of the Debentures need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the date of maturity or the date fixed for redemption, and no interest shall
accrue for the period from and after such date.
SECTION 16.7. TRUST INDENTURE ACT. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided, however, that, unless otherwise required by law,
notwithstanding the foregoing, this Indenture and the Debentures issued
hereunder shall not be subject to the provisions of subsections (a)(1), (a)(2),
and (a)(3) of Section 314 of the Trust Indenture Act as now in effect or as
hereafter amended or modified; provided, further, that this Section 16.7 shall
not require this Indenture or the Trustee to be qualified under the Trust
Indenture Act prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in an indenture qualified under the Trust Indenture Act, such
required provision shall control.
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SECTION 16.8. NO SECURITY INTEREST CREATED. Nothing in this Indenture
or in the Debentures, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction where property of
the Company or its subsidiaries is located.
SECTION 16.9. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Debentures, expressed or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Debenture
registrar and their successors hereunder, the holders of Debentures and the
holders of Senior Obligations, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 16.10. TABLE OF CONTENTS, HEADINGS, ETC. The table of contents
and the titles and headings of the articles and sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 16.11. AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
hereunder, including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to
all intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Debentures. For all purposes of this Indenture, the authentication and delivery
of Debentures by the authenticating agent shall be deemed to be authentication
and delivery of such Debentures "by the Trustee" and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent
shall be deemed to satisfy any requirement hereunder or in the Debentures for
the Trustee's certificate of authentication. Such authenticating agent shall at
all times be a person eligible to serve as trustee hereunder pursuant to Section
8.9.
Any corporation into which any authenticating agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
authenticating agent shall be a party, or any corporation succeeding to the
corporate trust business of any authenticating agent, shall be the successor of
the authenticating agent hereunder, if such successor corporation is otherwise
eligible under this Section 16.11, without the execution or filing of any paper
or any further act on the part of the parties hereto or the authenticating agent
or such successor corporation.
Any authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of any authenticating agent by giving written
notice of termination to such authenticating agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time any authenticating agent shall cease to be eligible under this Section,
the Trustee shall either promptly appoint a successor authenticating agent or
itself assume the duties and obligations of the former authenticating agent
under this Indenture, and upon such
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appointment of a successor authenticating agent, if made, shall give written
notice of such appointment of a successor authenticating agent to the Company
and shall mail notice of such appointment of a successor authenticating agent to
all holders of Debentures as the names and addresses of such holders appear on
the Debenture register.
The Trustee agrees to pay to the authenticating agent from
time to time reasonable compensation for its services (to the extent
pre-approved by the Company in writing), and the Trustee shall be entitled to be
reimbursed for such pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section
16.11 shall be applicable to any authenticating agent.
SECTION 16.12. EXECUTION IN COUNTERPARTS. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this indenture to be duly
executed.
SEPRACOR INC.
By: /s/Timothy J. Barberich
------------------------------------------
Name: Timothy J. Barberich
Title: President and Chief
Executive Officer
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/Kathleen Perry
------------------------------------------
Name: Kathleen Perry
Title: Second Vice President
-82-
<PAGE> 88
EXHIBIT A
[For Global Debenture only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITARY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
TRANSFER THE DEBENTURE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH DEBENTURE EXCEPT (A) TO SEPRACOR INC. OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THE DEBENTURE EVIDENCED HEREBY (THE FORM OF
WHICH
<PAGE> 89
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
(D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE 2(F) ABOVE), IT WILL FURNISH THE CHASE
MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURE
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE DEBENTURE
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER
WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS SUCH
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PURSUANT TO
CLAUSE 2(F) ABOVE OR UPON ANY TRANSFER OF THE DEBENTURES EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-2
<PAGE> 90
SEPRACOR INC.
6 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2005
No: _______ CUSIP: ________
SEPRACOR INC., a corporation duly organized and validly existing under
the laws of the State of Delaware (herein called the "Company"), which term
includes any successor corporation under the Indenture referred to on the
reverse hereof, for value received hereby promises to pay to
___________________________________ or registered assigns, the principal sum of
________________ ($____________) on February 15, 2005, at the office or agency
of the Company maintained for that purpose in accordance with the terms of the
Indenture, or, at the option of the holder of this Debenture, at the Corporate
Trust Office, 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, and to pay interest, semi-annually on February 15 and August 15, of each
year, commencing August 15, 1998, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 6 1/4% from February
10, 1998 and thereafter to maturity from the February 15 or August 15, as the
case may be, next preceding the date of this Debenture to which interest has
been paid or duly provided for, unless the date hereof is a date to which
interest has been paid or duly provided for, in which case from the date of this
Debenture, or unless no interest has been paid or duly provided for on the
Debentures, in which case from February 10, 1998, until payment of said
principal sum has been made or duly provided for. Notwithstanding the foregoing,
if the date hereof is after any January 31 or July 31, as the case may be, and
before the following February 15 or August 15, this Debenture shall bear
interest from such February 15 or August 15; provided, however, that if the
Company shall default in the payment of interest due on such February 15 or
August 15, then this Debenture shall bear interest from the next preceding
February 15 or August 15, to which interest has been paid or duly provided for
or, if no interest has been paid or duly provided for on such Debenture, from
February 10, 1998. The interest payable on the Debenture pursuant to the
Indenture on any February 15 or August 15 will be paid to the person entitled
thereto as it appears in the Debenture register at the close of business on the
record date, which shall be the January 31 or July 31 (whether or not a Business
Day) next preceding such February 15 or August 15, as provided in the Indenture;
provided that any such interest not punctually paid or duly provided for shall
be payable as provided in the Indenture. Interest may, at the option of the
Company, be paid either (i) by check mailed to the registered address of such
person (provided that the holder of Debentures with an aggregate principal
amount in excess of $2,000,000 shall, at the written election of such holder, be
paid by wire transfer in immediately available funds) or (ii) by transfer to an
account maintained by such person located in the United States.
A-3
<PAGE> 91
Reference is made to the further provisions of this Debenture
set forth on the reverse hereof, including, without limitation, provisions
subordinating the payment of principal of and premium, if any, and interest on
the Debentures to the prior payment in full of all Senior Obligations, as
defined in the Indenture, and provisions giving the holder of this Debenture the
right to convert this Debenture into Common Stock of the Company on the terms
and subject to the limitations referred to on the reverse hereof and as more
fully specified in the Indenture. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Debenture shall be deemed to be a contract made under the
laws of the State of New York, and for all purposes shall be construed in
accordance with and governed by the laws of said State.
This Debenture shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been manually
signed by the Trustee or a duly authorized authenticating agent under the
Indenture.
IN WITNESS WHEREOF, the Company has caused this Debenture to
be duly executed under its corporate seal to be affixed or imported hereon.
SEPRACOR INC.
BY: ________________________________________
Name:
Title:
Attest: ______________________________________
Name:
Title:
Dated:___________________________
A-4
<PAGE> 92
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By: ___________________________________
Authorized Signatory
By: ___________________________________
As Authenticating Agent
(if different from Trustee)
A-5
<PAGE> 93
[FORM OF REVERSE OF DEBENTURE]
SEPRACOR INC.
6 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2005
This Debenture is one of a duly authorized issue of Debentures
of the Company, designated as its 6 1/4% Convertible Subordinated Debentures due
2005 (herein called the "Debentures"), limited to the aggregate principal amount
of $____________ all issued or to be issued under and pursuant to an Indenture
dated as of February 10, 1998 (herein called the "Indenture"), between the
Company and The Chase Manhattan Bank as trustee (herein called the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the holders of the
Debentures.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of, premium, if any, and
accrued interest (including Liquidated Damages, if any) on all Debentures may be
declared, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture:
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures at the time outstanding, evidenced
as in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Debenture, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable on redemption thereof, or impair the right of any Debentureholder to
institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Debenture, or modify the provisions of the Indenture with
respect to the subordination of the Debentures in a manner adverse to the
Debentureholders in any material respect, or change the obligation of the
Company to make redemption of any Debenture upon the happening of a Fundamental
Change in a manner adverse to the holder of the Debentures, or impair the right
to convert the Debentures into Common Stock subject to the terms set forth in
the Indenture, including Section 15.6 thereof, without the consent of the holder
of each Debenture so affected or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent
A-6
<PAGE> 94
to any such supplemental indenture, without the consent of the holders of all
Debentures then outstanding. It is also provided in the Indenture that, prior to
any declaration accelerating the maturity of the Debentures, the holders of a
majority in aggregate principal amount of the Debentures at the time outstanding
may on behalf of the holders of all of the Debentures waive any past default or
Event of Default under the Indenture and its consequences except a default in
the payment of interest (including Liquidated Damages, if any) or any premium on
or the principal of any of the Debentures, a default in the payment of
redemption price pursuant to Article III or a failure by the Company to convert
any Debentures into Common Stock of the Company. Any such consent or waiver by
the holder of this Debenture (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Debenture and any Debentures which may be issued in exchange or
substitute hereof, irrespective of whether or not any notation thereof is made
upon this Debenture or such other Debentures.
The indebtedness evidenced by the Debentures is, to the extent
and in the manner provided in the Indenture, expressly subordinate and subject
in right of payment to the prior payment in full of all Senior Obligations of
the Company, as defined in the Indenture, whether outstanding at the date of the
Indenture or thereafter incurred, and this Debenture is issued subject to the
provisions of the Indenture with respect to such subordination. Each holder of
this Debenture, by accepting the same, agrees to and shall be bound by such
provisions and authorizes the Trustee on its behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee his attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest (including Liquidated Damages, if any) on this Debenture at
the place, at the respective times, at the rate and in the coin or currency
herein prescribed.
Interest on the Debentures shall be computed on the basis of a
year of twelve 30-day months.
The Debentures are issuable in registered form without coupons
in denominations of $1,000 and any integral multiple of $1,000. At the office or
agency of the Company referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, without payment of any
service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or
exchange of Debentures, Debentures may be exchanged for a like aggregate
principal amount of Debentures of other authorized denominations.
A-7
<PAGE> 95
The Debentures will not be redeemable at the option of the
Company prior to February 18, 2001. At any time on or after February 18, 2001,
and prior to maturity, the Debentures may be redeemed at the option of the
Company as a whole, or from time to time in part, upon mailing a notice of such
redemption not less than thirty (30) days before the date fixed for redemption
to the holders of Debentures at their last registered addresses, all as provided
in the Indenture, at the following optional redemption prices (expressed as
percentages of the principal amount), together in each case with accrued
interest (including Liquidated Damages, if any) to, but excluding, the date
fixed for redemption:
If redeemed during the period beginning February 18, 2001 and
ending on February 14, 2002, at a redemption price of 103.571%, and if redeemed
during the 12-month period beginning February 15:
YEAR REDEMPTION PRICE
2002 102.679%
2003 101.786%
2004 100.893%
and 100% at February 15, 2005; provided that if the date fixed for redemption is
on February 15 or August 15, then the interest payable on such date shall be
paid to the holder of record on the next preceding January 31 or July 31,
respectively.
The Debentures are not subject to redemption through the
operation of any sinking fund.
If a Fundamental Change (as defined in the Indenture) occurs
at any time prior to February 15, 2005, the Debentures will be redeemable on the
30th day after notice thereof at the option of the holder at a redemption price
equal to 100% of the principal amount of the Debenture (or portion thereof)
redeemed, together with accrued interest to the date of redemption; provided
that if such Repurchase Date is February 15 or August 15, then the interest
payable on such date shall be paid to the holder of record of the Debenture on
the next preceding July 31 or August 31, respectively. The Company shall mail to
all holders of record of the Debentures a notice of the occurrence of a
Fundamental Change and of the redemption right arising as a result thereof on or
before the 10th day after the occurrence of such Fundamental Change. For a
Debenture to be so repaid at the option of the holder, the Company must receive
at the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, such Debenture with the form entitled "Option
to Elect Repayment Upon a Fundamental Change" on the reverse thereof duly
completed, together with such Debentures duly
A-8
<PAGE> 96
endorsed for transfer, on or before the 30th day after the date of such notice
(or if such 30th day is not a Business Day, the next succeeding Business Day).
Subject to the provisions of the Indenture, the holder hereof
has the right, at its option, at any time after ninety (90) days following the
latest date of original issuance thereof through the close of business on
February 15, 2005, or, as to all or any portion hereof called for redemption,
prior to the close of business on the Business Day immediately preceding the
date fixed for redemption (unless the Company shall default in payment due upon
redemption thereof), to convert the principal hereof or any portion of such
principal which is $1,000 or an integral multiple thereof into that number of
shares of the Company's Common Stock, as said shares shall be constituted at the
date of conversion, obtained by dividing the principal amount of this Debenture
or portion thereof to be converted by the Conversion Price of $47.369 or such
Conversion Price as adjusted from time to time as provided in the Indenture,
upon surrender of this Debenture, together with a conversion notice as provided
in the Indenture, to the Company at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, or at
the option of such holder, the Corporate Trust Office, and, unless the shares
issuable on conversion are to be issued in the same name as this Debenture, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the holder or by his duly authorized attorney. No
adjustment in respect of interest or dividends will be made upon any conversion;
provided, however, that if this Debenture shall be surrendered for conversion
during the period from (but excluding) a record date for any interest payment
date to (but excluding) such interest payment date, this Debenture (unless it or
the portion being converted shall have been called for redemption during such
period) must be accompanied by an amount, in New York Clearing House funds or
other funds acceptable to the Company, equal to the interest payable on such
interest payment date on the principal amount being converted. No fractional
shares will be issued upon any conversion, but an adjustment in cash will be
made, as provided in the Indenture, in respect of any fraction of a share which
would otherwise be issuable upon the surrender of any Debenture or Debentures
for conversion.
Any Debentures called for redemption, unless surrendered for
conversion on or before the close of business on the date fixed for redemption,
may be deemed to be purchased from the holder of such Debentures at an amount
equal to the applicable redemption price, together with accrued interest
(including Liquidated Damages, if any) to (but excluding) the date fixed for
redemption, by one or more investment bankers or other purchasers who may agree
with the Company to purchase such Debentures from the holders thereof and
convert them into Common Stock of the Company and to make payment for such
Debentures as aforesaid to the Trustee in trust for such holders.
Upon due presentment for registration of transfer of this
Debenture at the office or agency of the Company maintained for that purpose in
accordance with the terms of the
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<PAGE> 97
Indenture, or at the option of the holder of this Debenture, at the Corporate
Trust Office, a new Debenture or Debentures of authorized denominations for an
equal aggregate principal amount will be issued to the transferee in exchange
thereof, subject to the limitations provided in the Indenture, without charge
except for any tax or other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying
agent, any conversion agent and any Debenture registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Debenture
registrar), for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor any
other conversion agent nor any Debenture registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Debenture.
No recourse for the payment of the principal of or any premium
or interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer or director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
Terms used in this Debenture and defined in the Indenture are
used herein as therein defined.
A-10
<PAGE> 98
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this
Debenture, shall be construed as though they were written out in full according
to applicable laws or regulations:
- --------------------------------------------------------------------------------
TEN COM- as tenants in common UNIF GIFT MIN ACT --
Custodian
--------------------
(Cust)
--------------------
(Minor)
- --------------------------------------------------------------------------------
TEN ENT- as tenants by the entireties
- --------------------------------------------------------------------------------
JT TEN- as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants in
common --------------------
(State)
- --------------------------------------------------------------------------------
ADDITIONAL ABBREVIATIONS MAY ALSO BE USED
THOUGH NOT IN THE ABOVE LIST.
A-11
<PAGE> 99
CONVERSION NOTICE
To: SEPRACOR INC.
The undersigned registered owner of this Debenture hereby
irrevocably exercises the option to convert this Debenture, or the portion
hereof (which is $1,000 or an integral multiple thereof) below designated, into
shares of Common Stock of Sepracor Inc. in accordance with the terms of the
Indenture referred to in this Debenture, and directs that the shares issuable
and deliverable upon such conversion, together with any check in payment for
fractional shares and any Debentures representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Debenture not converted are to be issued in the name of a person other than the
undersigned, the undersigned will check the appropriate box below and pay all
transfer taxes payable with respect thereto. Any amount required to be paid to
the undersigned on account of interest accompanies this Debenture.
Dated:____________________________ ________________________________________
________________________________________
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange if
shares of Common Stock are to be issued,
or Debentures to be delivered, other
than to and in the name of the
registered holder.
________________________________________
Signature Guarantee
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<PAGE> 100
Fill in for registration of shares of Common Stock if to be
issued, and Debentures if to be delivered, other than to and in the name of the
registered holder:
_________________________________
(Name)
_________________________________
(Street Address)
_________________________________
(City, State and Zip Code)
Please print name and address
Principal amount to be Converted
(if less than all): $____________
Social Security or Other Taxpayer
Identification Number:
A-13
<PAGE> 101
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
TO: SEPRACOR INC.
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Sepracor Inc. (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to repay the entire principal amount of this Debenture, or
the portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Debenture at the redemption price, together with accrued interest to, but
excluding, such date, to the registered holder hereof.
Dated:____________________________ __________________________________________
__________________________________________
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with
the name as written upon the face of the
Debenture in every particular without
alteration or enlargement or any change
whatever.
Principal amount to be (if less than all):
$______________
__________________________________________
Social Security or Other Taxpayer
Identification Number
A-14
<PAGE> 102
ASSIGNMENT
For value received ___________________________ hereby sell(s),
assign(s) and transfer(s) unto ___________________________ (Please insert social
security or other Taxpayer Identification Number of assignee) the within
Debenture, and hereby irrevocably constitutes and appoints _____________________
attorney to transfer the said Debenture on the books of the Company, with full
power of substitution in the premises.
In connection with any transfer of the Debenture within the
period prior to the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision) (other
than any transfer pursuant to a registration statement that has been declared
effective under the Securities Act), the undersigned confirms that such
Debenture is being transferred:
/ / To Sepracor Inc. or a subsidiary thereof, or
/ / Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
/ / To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the Securities Act of
1933, as amended;
and unless the box below is checked, the undersigned confirms that such
Debenture is not being transferred to an "affiliate" of the Company as defined
in Rule 144 under the Securities Act of 1933, as amended (an "Affiliate").
/ / The transferee is an Affiliate of the Company.
Dated:
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<PAGE> 103
____________________________________________
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange if shares of
Common Stock are to be issued, or Debentures
to be delivered, other than to or in the
name of the registered holder.
____________________________________________
Signature Guarantee
NOTICE: The signature on the conversion notice, the option to elect repayment
upon a Fundamental Change or the assignment must correspond with the name as
written upon the face of the Debenture in every particular without alteration or
enlargement or any change whatever.
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<PAGE> 104
EXHIBIT B
Sepracor Inc.
111 Locke Drive
Marlborough, MA 01752
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 1001-2697
Ladies/Gentlemen:
We are delivering this letter in connection with an offering
of 6 1/4% Convertible Subordinated Debentures due 2005 (the "Debentures), which
are convertible into shares of Common Stock, $ .10 par value (the "Common
Stock"), of Sepracor Inc. (the "Company") all as described in the Offering
Memorandum (the "Offering Memorandum") relating to the Offering.
We hereby confirm that:
- - we are an "accredited investor" within the meaning of Rule 501(a)(1),
(2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1), (2) or (3)
under the Securities Act (an "Institutional Accredited Investor");
- - (A) any purchase of Debentures by us will be for our own account or for
the account of one or more other Institutional Accredited Investors or
as fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment
discretion or (B) we are a "bank," within the meaning of Section
3(a)(2) of the Securities Act, or a "savings and loan association" or
other institution described in Section 3(a)(5)(A) of the Securities Act
that is acquiring Debentures as fiduciary for the account of one or
more institutions for which we exercise sole investment discretion;
- - in the event that we purchase any Debentures, we will acquire
Debentures having a minimum principal amount of not less than $100,000
for our own account or for any separate account for which we are
acting;
- - we have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of purchasing
the Debentures;
<PAGE> 105
- - we are not acquiring Debentures with a view to distribution thereof or
with any present intention of offering or selling Debentures or the
Common Stock issuable upon conversion thereof, except as permitted
below; provided that the disposition of our property and property of
any accounts for which we are acting as fiduciary shall remain at all
times within our control; and
- - we have received a copy of the Offering Memorandum and acknowledge that
we have had access to such financial and other information, and have
been afforded the opportunity to ask such questions or representatives
of the Company and receive answers thereto, as we deem necessary in
connection with our decision to purchase Debentures.
We understand that the Debentures are being offered in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Debentures and the shares of
Common Stock issuable upon conversion thereof have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Debentures, that if in the future we decide to resell
or otherwise transfer such Debentures or the Common Stock issuable upon
conversion thereof, such Debentures or Common Stock may be resold or otherwise
transferred only (i) to the Company or any subsidiary thereof, or (ii) inside
the United States to a person who is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in a transaction meeting the
requirements of Rule 144A, or (iii) inside the United States to an Institutional
Accredited Investor that, prior to such transfer, furnishes to the Trustee or
transfer agent for such securities a signed letter containing certain
representations and agreements relating to the restrictions on transfer of such
securities (the form of which letter can be obtained from such Trustee or
transfer agent), or (iv) outside the United States in a transaction meeting the
requirements of Rule 904 under the Securities Act, or (v) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
applicable), or (vi) pursuant to a registration statement which has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer), and in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction and in accordance with the legends set forth on the
Debentures or the Common Stock issuable upon conversion thereof, as the case may
be. We further agree to provide any person purchasing any of the Debentures or
the Common Stock issuable upon conversion thereof other than pursuant to clause
(vi) above from us a notice advising such purchaser that resales of such
securities are restricted as stated herein. We understand that the Trustee or
transfer agent for the Debentures and the Common Stock will not be required to
accept for registration of transfer any Debentures or any shares of Common Stock
issued upon conversion of the Debentures except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that any Debentures and any
certificates representing Common Stock will be in the
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<PAGE> 106
form of definitive physical certificates and that such certificates will bear a
legend reflecting the substance of this paragraph other than certificates
representing Common Stock transferred pursuant to clause (vi) above.
We acknowledge that the Company, others and you will rely upon
our confirmations, acknowledgments and agreements set forth herein, and we agree
to notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
________________________________________
(Name of Purchaser)
By:_____________________________________
Name:___________________________________
Title:__________________________________
Address:________________________________
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<PAGE> 1
Exhibit 10.37
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CONSULTING AGREEMENT
This Consulting Agreement ("AGREEMENT"), effective as of October 1, 1995,
is between SEPRACOR INC. ("SEPRACOR"), a Delaware corporation having its
principal office at 33 Locke Drive, Marlborough, Massachusetts 01752, and Digby
W. Barrios, 57 Main Street, Ridgefield, Connecticut 06877 ("CONSULTANT").
WHEREAS, SEPRACOR wishes to engage the services of the CONSULTANT in the
area of business development ("FIELD"); and,
WHEREAS, the CONSULTANT wishes to provide consulting services to SEPRACOR
on the terms herewith set forth;
THEREFORE, SEPRACOR and CONSULTANT agree that:
1. TERM
The term of this AGREEMENT shall be one year, commencing on October 1,
1995, however, it is automatically renewed, unless sooner terminated in
accordance with the provisions of Section 9.
2. SERVICES
During the term of this AGREEMENT, CONSULTANT agrees to diligently and
conscientiously use his best efforts to discharge projects in the FIELD as may
be reasonably requested from time to time by SEPRACOR. Responsibilities of
CONSULTANT include providing such advice and information relating to the FIELD
as SEPRACOR may reasonably request from time to time, and communicating with
various third parties on behalf of SEPRACOR on matters relating to the FIELD.
During the term of this AGREEMENT, CONSULTANT shall not take part in any
activity in the FIELD which is a conflict of interest with his activities on
behalf of SEPRACOR, and he shall not assist any other person or organization
that competes, or intends to compete with SEPRACOR in this FIELD.
Notwithstanding the provisions of this Section 2, nothing in this AGREEMENT
shall preclude CONSULTANT from providing consulting services to any other person
or entity for such projects which SEPRACOR and CONSULTANT have mutually agreed
are not within the FIELD.
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<PAGE> 2
3. COMPENSATION
SEPRACOR shall pay CONSULTANT at the rate of $1,500 per month in
consideration for consulting services provided on behalf of SEPRACOR. SEPRACOR
shall also reimburse CONSULTANT for all travel, office and related expenses
reasonably incurred in connection with the performance of duties as a consultant
to SEPRACOR.
In a monthly invoice, CONSULTANT shall document the time spent and
expenses incurred in connection with providing consulting service to SEPRACOR.
SEPRACOR shall pay such invoice within thirty (30) days of its receipt.
The CONSULTANT shall not be entitled to any benefits, coverages, or
privileges, including, without limitation, social security, unemployment,
workers' compensation, medical or pension payments, or holiday/vacation pay or
other such benefits made available to employees of SEPRACOR.
4. INDEPENDENT CONTRACTOR
CONSULTANT shall be considered to be an independent contractor and not an
agent or employee of SEPRACOR and has no authority to bind SEPRACOR.
5. RECORDS AND REPORTS
CONSULTANT agrees to keep records, in such form as the parties may agree,
to make reports in writing to SEPRACOR at SEPRACOR's reasonable request and to
deliver to SEPRACOR upon termination of the AGREEMENT or at any other time upon
request by SEPRACOR all records, files, memoranda, notes, designs, data,
reports, drawings, plans, software, software documentation, sketches, laboratory
and research notebooks and other documents (and all copies or reproduction of
such materials) relating to the business of SEPRACOR. Such written records shall
be available to and remain the sole property of SEPRACOR.
6. REPRESENTATIONS AND WARRANTEES
CONSULTANT represents and warrants that CONSULTANT is free to enter into
this AGREEMENT and perform the consulting services provided for in this
AGREEMENT. CONSULTANT agrees that all information CONSULTANT discloses to
SEPRACOR shall be received by SEPRACOR without further obligation to CONSULTANT
than as provided herein. CONSULTANT also represents that, except as he has
disclosed in writing to SEPRACOR, he is not bound by the terms of any agreement
with any previous employer or other party to refrain from using or disclosing
any trade secret or confidential or proprietary information in the course of his
performance of services under this AGREEMENT or to refrain from competing,
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<PAGE> 3
directly or indirectly, with the business of such previous employer or any other
party. CONSULTANT further represents that his performance of all the terms of
this AGREEMENT does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by him in confidence or in
trust prior to the commencement of this AGREEMENT, and he will not disclose to
SEPRACOR or induce SEPRACOR to use any confidential or proprietary information
or material belonging to any previous employer or others.
If CONSULTANT is aware of circumstances under which SEPRACOR may not be
free to use CONSULTANT's information without liability of any kind, or the use
of which by SEPRACOR would result in a possible infringement of one or more
unexpired patents or other proprietary rights known to CONSULTANT, then
CONSULTANT agrees to disclose such circumstances to SEPRACOR and, upon
disclosure of such circumstance, CONSULTANT shall be under no obligation to
disclose further related information to SEPRACOR.
7. NON-DISCLOSURE AND OTHER RESTRICTIONS
While serving as a CONSULTANT to SEPRACOR, CONSULTANT may obtain
knowledge or private information belonging to, or possessed or used by, SEPRACOR
and its business. This knowledge or information (the "PROPRIETARY INFORMATION")
may include, but is not limited to, knowledge or information in the form of
proprietary, confidential or trade secret processes, plans, materials, formulas,
and the like relating to SEPRACOR's business, products and other activities.
CONSULTANT agrees to treat such knowledge or information as confidential.
CONSULTANT agrees that he will not, without the prior written consent of
SEPRACOR, at any time during the term of this AGREEMENT or extension thereof as
provided in Section 1, and for a period of five (5) years after termination of
this AGREEMENT, directly or indirectly reveal, furnish or make known to any
person or use for CONSULTANT's benefit or the benefit of others any PROPRIETARY
INFORMATION of SEPRACOR, disclosed to, learned of, developed, or otherwise
acquired by CONSULTANT while performing services for SEPRACOR. CONSULTANT is
permitted to disclose the information obtained under the terms of this AGREEMENT
to third parties only on a need-to-know basis related to the performance of work
under this AGREEMENT, provided that SEPRACOR has approved the disclosure in
advance, and only if such persons are bound to protect the confidentiality of
such information to the same extent as the CONSULTANT pursuant to this
AGREEMENT.
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<PAGE> 4
This obligation is specifically qualified and limited by the
understanding that CONSULTANT will not have any obligation or liability of any
kind with respect to any PROPRIETARY INFORMATION which:
(a) is generally known to the public at the time of disclosure or
becomes generally known through no wrongful act on the part of the
CONSULTANT;
(b) becomes known to the CONSULTANT through disclosure by sources
other than SEPRACOR having the legal right to disclose such
PROPRIETARY INFORMATION;
(c) has been independently developed by the CONSULTANT without
reference to or use of the PROPRIETARY INFORMATION; or
(d) is required to be disclosed by the CONSULTANT to comply with
applicable laws or governmental regulations, PROVIDED THAT the
CONSULTANT provides prior written notice of such disclosure to
SEPRACOR and takes reasonable and lawful actions to avoid and/or
minimize the extent of such disclosure.
8. PROPRIETARY PROPERTY
CONSULTANT agrees that all inventions, data, works, discoveries, designs,
technology and improvements, (whether or not protectable by a patent or a
copyright) ("INVENTIONS") related to the business of the SEPRACOR, which are
conceived of, made, reduced to practice, created, written, designed or
developed, authored or made by CONSULTANT, alone or in combination with others,
in the course of the performance of services under this AGREEMENT or thereafter
if resulting or directly derived from PROPRIETARY INFORMATION, shall be the sole
and exclusive property of SEPRACOR. The inventions are to be promptly reported
to SEPRACOR but otherwise maintained in confidence by CONSULTANT. All works
authored by the CONSULTANT under this AGREEMENT shall be deemed "works made for
hire" to the extent permitted by the copyright law.
CONSULTANT hereby assigns to SEPRACOR all INVENTIONS and any and all
related patents, copyrights, trademarks, trade names, and other industrial and
intellectual property rights and applications therefor, in the United States and
elsewhere, and appoints any officer of SEPRACOR as duly authorized agent to
execute, file, prosecute and protect the same before any government agency,
court or authority.
CONSULTANT agrees to cooperate fully with SEPRACOR and its nominees to
obtain patents or register copyrights in any and all countries for these
INVENTIONS,
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<PAGE> 5
and to execute all papers for use in applying for and obtaining such protection
thereon as SEPRACOR may desire, together with assignments thereof to confirm
SEPRACOR's ownership thereof, all at SEPRACOR's expense.
No rights are hereby given to SEPRACOR in any inventions conceived and
evidenced in an invention record or disclosure, or under any patents or patent
applications that CONSULTANT may own prior to the effective date of this
AGREEMENT or may subsequently acquire which do not arise out of the work
performed by CONSULTANT during the term of this AGREEMENT.
9. TERMINATION
Either SEPRACOR or CONSULTANT may terminate this AGREEMENT upon seven (7)
days written notice to the other party. Such termination will be without
prejudice to any right or remedy either SEPRACOR or CONSULTANT might have as a
result of this AGREEMENT or due to a failure of the other to perform its
obligations under this AGREEMENT.
If this AGREEMENT is terminated by SEPRACOR, CONSULTANT shall be entitled
to full payment for all expenses already incurred and for performance of
consulting services prior to the date of termination, for which SEPRACOR is
obligated to pay as described in Section 3 of this AGREEMENT, subject to the
limitations on reimbursement of expenses paid or incurred prior to the effective
date of termination. Such payments shall constitute full settlement of any and
all claims of CONSULTANT of every description against SEPRACOR. Notwithstanding
the foregoing, SEPRACOR may terminate this AGREEMENT, effective immediately upon
receipt of written notice, if CONSULTANT breaches or threatens to breach any
provision of this AGREEMENT.
10. NOTICES
Notices, and other communications required to be given hereunder shall be
deemed given when sent by either party by registered or certified mail to the
other party at the address set forth below or to such other address as one party
may from time-to-time designate by written notice to the other.
Timothy J. Barberich Digby W. Barrios
Sepracor Inc.
President & CEO
33 Locke Drive 57 Main Street
Marlborough, MA 01752 Ridgefield, CT 06877
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<PAGE> 6
Invoices are to be sent directly to:
ACCOUNTS PAYABLE
Sepracor Inc.
33 Locke Drive
Marlborough, MA 01752
Invoices must be submitted with full letterhead information. They must be
signed, and clearly marked as an "INVOICE." If appropriate, invoices should also
reference either a protocol or purchase order number.
11. IMPOSSIBILITY OF PERFORMANCE
Neither of the parties hereto shall be liable in damages for any delay or
default which is caused by conditions beyond its control, including but not
limited to Acts of God, governmental restrictions, continuing domestic or
international problems such as war or insurrections, strikes, fires, floods,
work stoppages, embargoes, and/or lack of materials; provided however that any
party hereto shall have the right to terminate this AGREEMENT if the other party
is unable to fulfill its obligations hereunder due to any of the above-mentioned
causes.
12. CONSTRUCTION
This AGREEMENT shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
13. SEPARABILITY AND WAIVER
If any of the terms, provisions, or conditions of this AGREEMENT or the
application thereof to any circumstances shall be ruled invalid or
unenforceable, the validity or enforceability of the remainder of this AGREEMENT
shall not be affected thereby, and each of the other terms, provisions, and
conditions of this AGREEMENT shall be valid and enforceable to the fullest
extent permitted by law.
A waiver or consent regarding any term, provision, or condition of this
AGREEMENT given by SEPRACOR on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
14. AMENDMENT
This AGREEMENT may be amended or modified only by a written instrument
executed by both SEPRACOR and CONSULTANT.
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<PAGE> 7
15. SUCCESSORS AND ASSIGNS
This AGREEMENT shall be binding upon, and inure to the benefit of, both
parties and their respective successors and assigns, including any corporation
with which, or into which, SEPRACOR may be merged or which may succeed to its
assets or business, provided, however, that the obligations of CONSULTANT are
personal and shall not be assigned by CONSULTANT.
16. ENTIRE AGREEMENT
This AGREEMENT constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this six (6) page AGREEMENT
to be executed in duplicate.
SEPRACOR INC.
By: /s/ Timothy J. Barberich By: /s/ Digby W. Barrios
----------------------------- -----------------------------
Title: Title: Consultant
----------------------- ----------------------
Date: Date: October 27, 1995
----------------------- -----------------------
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