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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or (g) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
DUSA PHARMACEUTICALS, INC.
(Exact name of registrant as it appears in its charter)
NEW JERSEY 0-19777 22-3103129
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification Number)
181 UNIVERSITY AVENUE
TORONTO, ONTARIO M5H 3M7 CANADA
(Address of principal executive offices, including zip code)
(416) 363-5059
(Registrant's telephone number, including area code)
Securities To Be Registered Pursuant to Section 12 (b) Of The Act:
Title Of Each Class To Be Name of Each Exchange On Which
So Registered Each Class Is To Be Registered
None Not Applicable
Securities To Be Registered Pursuant To Section 12 (g) Of The Act:
Common Stock and Note Purchase Rights
(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On September 26, 1997, the Board of Directors of DUSA Pharmaceuticals,
Inc., a New Jersey corporation (the "Company"), declared a dividend of one
common stock and note purchase right (a "Right") for each outstanding share of
Common Stock (the "Rights Dividend"). The Rights Dividend is payable on October
24, 1997 (the "Record Date") to stockholders of record at the close of business
on the Record Date, and with respect to all shares of Common Stock that become
outstanding after the Record Date and prior to the earliest of the Distribution
Date (as defined below), the redemption of the Rights and the expiration of the
Rights. As of the Record Date, the number of shares of Common Stock outstanding
is 9,365,950.
Except as set forth below and subject to adjustment as provided in the
Rights Agreement (as defined below), each Right entitles the registered holder
to purchase from the Company one Unit, consisting initially of a one-tenth share
of Common Stock and one Note in the principal amount equal to nine-tenths of the
current market price of the Common Stock on the date of exercise, at an exercise
price of $50 per Right (the "Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement dated as of September 26, 1997 (the
"Rights Agreement"), between the Company and American Stock Transfer & Trust
Company, as Rights Agent (the "Rights Agent"). The Notes are issuable under, and
subject to the terms and conditions of, an Indenture (the "Indenture") between
the Company and American Stock Transfer and Trust Company.
The Rights will be evidenced by Common Stock certificates and not by
separate certificates until the tenth day following the earliest of (i) the date
of public disclosure that a person or group (an "Acquiring Person"), together
with persons affiliated or associated with it, has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the outstanding Common
Stock (the "Stock Acquisition Date") and (ii) the commencement or disclosure of
an intention to commence, a tender offer or exchange offer by a person other
than the Company and certain related entities if upon consummation of the offer,
such person or group together with persons affiliated or associated with it,
could acquire beneficial ownership of 15% or more of the outstanding Common
Stock, (the earlier of such dates being called the "Distribution Date), and
(iii) the date a majority of the Independent Directors and a majority of the
Continuing Directors declare a person an "Adverse Person" upon a determination
that such person, alone or together with its affiliates or associates, has
become the beneficial owner of an amount of Common Stock which the Independent
Directors determine to be substantial (which amount shall in no event be less
than 10% of the shares of Common Stock then outstanding) and a determination by
a majority of the Independent Directors and the Continuing Directors, after
reasonable inquiry and investigation, including consultations with such persons
as such directors shall deem appropriate that (a) such ownership is detrimental
to the maintenance, renewal, or acquisition of the Company's governmental or
regulatory approvals, agreements, permits, licenses or registrations, or (b)
such persons were convicted in criminal proceedings or are named defendants of
pending criminal proceedings (excluding minor offenses) relating to the
pharmaceutical industry or any other business regulated by any federal, state or
local governmental agency, or (c) such persons are currently subject to any
order, judgment, decree or
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debarment of any court of competent jurisdiction or governmental or regulatory
authority permanently or temporarily enjoining them from any type of business
practice relating to the pharmaceutical industry or any other business regulated
by any state or local governmental agency.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferable with and only with the Common Stock
(except in connection with redemption of the Rights). Until the Distribution
Date (or earlier redemption of the Rights), new Common Stock certificates issued
after the Record Date upon transfer, replacement or new issuance of Common Stock
will contain a notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Stock will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date. From and after the Distribution Date, such separate Right
Certificates alone will evidence the Rights.
The Rights will first become exercisable on the Distribution Date
(unless sooner redeemed). The Rights will expire at the close of business on
October 24, 2007 (the "Expiration Date"), unless earlier redeemed by the Company
as described below.
The Purchase Price is subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend or distribution on, or a
subdivision, combination or reclassification of, the Common Stock, (ii) upon the
grant to holders of the Common Stock of certain rights, options, or warrants to
subscribe for Common Stock or securities convertible into Common Stock at less
than the current market price of the Common Stock, or (iii) upon the
distribution to holders of the Common Stock of other securities, cash, property,
evidences of indebtedness, or assets.
In the event that a majority of the Independent Directors and a
majority of the Continuing Directors declare that a person is an Adverse Person
(an "Adverse Person Event"), a person acquires beneficial ownership of 15% or
more of the Common Stock (and the Independent Directors do not thereafter redeem
the Rights in the time and manner permitted, such event, is referred to herein
as a "Triggering Event"), then the Rights will "flip-in" and entitle such holder
of a Right, except as provided below, to purchase, upon exercise at the
then-current Purchase Price, that number of shares of Common Stock having a
market value of two times such Purchase Price.
Any Rights beneficially owned at any time on or after the earlier of
the Distribution Date and the Stock Acquisition Date by an Acquiring Person or
Adverse Person, or an affiliate or associate of an Acquiring Person or Adverse
Person (whether or not such ownership is subsequently transferred) will become
null and void upon the occurrence of a Triggering Event or an Adverse Person
Event, and any holder of such Rights will have no right to exercise such Rights.
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In the event that, following the Stock Acquisition Date, the Company is
acquired in a merger or other business combination in which the Common Stock
does not remain outstanding or is changed or 50% or more of its consolidated
assets or earning power is sold, leased, exchanged, mortgaged, pledged or
otherwise transferred or disposed of (in one transaction or a series of related
transactions) the Rights will "flip-over" and entitle each holder of a Right
(except those Rights which have been voided as set forth above) to purchase,
upon the exercise of the Right at the then-current Purchase Price, that number
of shares of common stock of the acquiring company (or, in certain
circumstances, one of its affiliates) which at the time of such transaction
would have a market value of two times such Purchase Price.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. Holders will have no right to receive fractional shares of
Common Stock or Notes (other than fractions which are in denominations of $10 or
integral multiples thereof) upon the exercise of Rights. In lieu of such
fractional shares or Notes, an adjustment in cash may be made based on the
market price of the Common Stock on the last trading date prior to the date of
exercise, or the Company may issue script, warrants or depository receipts.
At any time prior to the earlier of (i) ten days following the Stock
Acquisition Date, and (ii) the Expiration Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right, subject to
adjustment. Under certain circumstances the decision to redeem shall require the
concurrence of a majority of the Continuing Directors and a majority of the
Independent Directors. The Company may not redeem the Rights if the Independent
Directors have declared a person an Adverse Person. Immediately upon the action
of the Company's Board of Directors electing to redeem the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
thereafter will be to receive the applicable redemption price.
The term "Continuing Directors" includes any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, an Adverse Person or an
affiliate or associate of an Acquiring Person or an Adverse Person, or any
representative of the foregoing entities. The term "Independent Directors"
includes any member of the Board, while such Person is a member of the Board,
who (i) is not an employee of the Company or (ii) does not receive compensation
from the Company for services, other than services as a director.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder or noteholder of the Company, including, without
limitation, the right to vote or to receive dividends or distributions of
payments of principal or interest.
At any time prior to ten days following the Stock Acquisition Date, the
Company may, without the approval of any holder of the Rights, supplement or
amend certain provisions of the Rights Agreement (including the date on which
the Distribution Date will occur). Thereafter, the Rights Agreement may be
amended only to cure ambiguities, to correct inconsistent provisions, or
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in ways that do not adversely affect the Rights holders. The Rights Agreement
may not be amended to change the Purchase Price, the number of shares of Common
Stock, other securities, cash or other property obtainable upon exercise of a
Right, the redemption price, or the Expiration Date, except that, prior to ten
days following the Triggering Event, the Rights Agreement may be amended to
substitute other securities for the Unit otherwise obtainable upon exercise of a
Right, provided the value of such securities is equal to the then current market
price of one share of Common Stock.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. The Rights should not
interfere with any merger or other business combination approved by the
Company's Board of Directors prior to the time a person or group has acquired
beneficial ownership of 15% or more of the Common Stock, because until such time
the Rights may be redeemed by the Company.
The foregoing summary description of the Rights and the Notes does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement and the Indenture, copies of which are attached hereto as
Exhibits 1 and 2, respectively, and are incorporated herein by reference. Copies
of the Rights Agreement and the Indenture will be available free of charge from
the Company.
ITEM 2. EXHIBITS
1. Rights Agreement dated as of September 26, 1997 between DUSA
Pharmaceuticals, Inc. and American Stock Transfer & Trust
Company as Rights Agent, which includes as Exhibit A the form
of Rights Certificate, and as Exhibit B the Summary of Rights
to Purchase Common Stock and Notes. Pursuant to the Rights
Agreement, Rights Certificates will not be mailed until as
soon as practicable after the earlier of the tenth day after
public announcement that a person or group has acquired
beneficial ownership of 15% or more of the Common Stock or the
tenth day after a person commences, or announces an intention
to commence, a tender or exchange offer the consummation of
which could result in a person beneficially owning 15% or more
of the Common Stock, or immediately after the occurrence of an
Adverse Person Event, as such term is defined in the Rights
Agreement.
2. Form of Indenture dated as of September 26, 1997 between DUSA
Pharmaceuticals, Inc. and American Stock & Transfer Company.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized.
DUSA PHARMACEUTICALS, INC.
By: /s/ D. Geoffrey Shulman
D. Geoffrey Shulman, MD, FRCPC
President and Chief Executive Officer
Dated: October 23, 1997
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EXHIBIT INDEX
Exhibit
1. Rights Agreement dated as of September 26, 1997 between DUSA
Pharmaceuticals, Inc. and American Stock & Transfer Company as Rights
Agent, which includes as Exhibit A the form of Rights Certificate, and
as Exhibit B the Summary of Rights to Purchase Common Stock and Notes.
Pursuant to the Rights Agreement, Rights Certificates will not be
mailed until as soon as practicable after the earlier of the tenth day
after public announcement that a person or group has acquired
beneficial ownership of 15% or more of the Common Stock or the tenth
day after a person commences, or announces an intention to commence, a
tender or exchange offer the consummation of which could result in a
person beneficially owning 15% or more of the Common Stock, or
immediately after the occurrence of an Adverse Person Event, as such
term is defined in the Rights Agreement.
2. Form of Indenture dated as of September, 1997 between DUSA
Pharmaceuticals, Inc. and American Stock & Transfer Company as Trustee.
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 26, 1997, between DUSA
Pharmaceuticals, Inc., a New Jersey corporation (the "Company"), and, American
Stock Transfer & Trust Co., a New York corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on September 26, 1997, the Board of Directors of the Company
(the "Board") authorized and declared a dividend distribution of one Right for
each share of Common Stock of the Company outstanding at the Close of Business
on October 24, 1997, (the "Record Date"), each Right representing the right to
purchase one unit (a "Unit"), each Unit consisting initially of one-tenth (1/10)
share of Common Stock and a Note in principal amount equal to nine-tenths (9/10)
of the Current Market Price subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Stock then outstanding (determined without taking
into account any securities exercisable or exchangeable for, or convertible
into, Common Stock, other than any such securities beneficially owned by the
Acquiring Person and Affiliates and Associates of such Person). "Acquiring
Person" shall not include any Exempt Person. No person shall become an
"Acquiring Person" solely as the result of an acquisition of Common Stock by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Common Stock of the Company then outstanding as determined above;
provided, however, that if a Person becomes and remains the Beneficial Owner of
15% or more of the Common Stock of the Company then outstanding (as determined
above) solely by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional
shares of Common Stock by any means whatsoever, then such Person shall be deemed
to be an "Acquiring Person."
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a) (ii) hereof.
(d) "Adverse Person" shall mean any Person declared to be an Adverse
Person by the Independent Directors upon a determination that the criteria set
forth in Section 11(a)(ii)(B) hereof apply to such Person.
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(e) "Adverse Person Event" shall mean the determination by the
Independent Directors pursuant to Section 11(a)(ii)(B) hereof that a Person is
an Adverse Person.
(f) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended and in effect on the date of
this Agreement (the "Exchange Act").
(g) "Agreement" shall mean this Rights Agreement or as it from time to
time may be supplemented or amended pursuant to the applicable provision hereof.
(h) Except as provided below, a Person shall be deemed the "Beneficial
Owner" of, and shall be deemed to "beneficially own," any securities:
(i) which such Person or any Affiliate or Associate of such
Person beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or options or
otherwise; provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (a) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange, or (b) securities issuable upon exercise of Rights at any time prior
to the occurrence of a Triggering Event, or (c) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or Section
22 hereof (the "Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Original Rights;
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), including pursuant to any
agreement, arrangement of understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own" any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding : (a) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with , the applicable provisions of the General Rules and Regulations
under the Exchange Act and the requirements of any national securities exchange
on which the Common Stock is listed, and (b) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or successor
report); or
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(iv) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of
acquiring , holding, voting (except pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this paragraph (h) or disposing of any
voting securities of the Company; provided, however, that nothing in this
paragraph (h) shall cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the date of
such acquisition.
(i) "Board" shall mean the Board of Directors of the Company.
(j) "Business Day" shall mean any day other than a Saturday, 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.
(k) "Close of Business" on any given date shall mean 5:00 p.m., New
York time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 p.m., New York time, on the next succeeding Business Day.
(l) "Common Stock" shall mean the no par value common stock of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management , of such Person.
(m) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(n) "Company" shall mean the Person named as the "Company" in the first
paragraph of this Agreement until a successor corporation shall have become such
or until a Principal Party shall assume, and thereafter be liable for, all
obligations and duties of the Company hereunder, pursuant to the applicable
provisions of this Agreement, and thereafter "Company" shall mean such successor
corporation or Principal Party.
(o) "Continuing Director" shall mean (i) any member of the Board, while
such Person is a member of the Board, who is not an Acquiring Person or an
Adverse Person, or an Affiliate or Associate of an Acquiring Person or an
Adverse Person, or a representative of an Acquiring Person or an Adverse Person
or of any such Affiliate or Associate, and was a member of the Board prior to
the date of this Agreement, or (ii) any Person who subsequently becomes a member
of the Board, while such Person is a member of the Board, who is not an
Acquiring Person or an Adverse Person, or an Affiliate or Associate of an
Acquiring Person or an Adverse Person, or a representative of an Acquiring
Person or an Adverse Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is recommended or
approved by a majority of the Continuing Directors.
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(p) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(q) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(r) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(s) "Equivalent Common Stock" shall have the meaning set forth in
Section 11(b) hereof.
(t) "Exchange Act" shall have the meaning set forth in Section 1(f)
hereof.
(u) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company or of any Subsidiary
of the Company, or (iv) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan.
(v) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(w) "Final Expiration Date" shall mean the Close of Business on October
24, 2007.
(x) "Indenture" shall mean the Indenture, dated as of September 26,
1997, between the Company and American Stock Transfer & Trust Co., a New York
corporation, as trustee, as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental thereto and
shall include the terms of the particular series of securities issued
thereunder, including the Notes.
(y) "Independent Director" shall mean any member of the Board, while
such Person is a member of the Board, who (i) is not an employee of the Company
or (ii) does not receive compensation from the Company for services, other than
services as a director.
(z) "Note" shall mean a subordinated note issuable under the Indenture
and pursuant to this Agreement upon the exercise of any Right prior to the
occurrence of any Triggering Event. Each Note shall be substantially in the form
of Exhibit I to the Indenture and shall initially be issuable in principal
amount equal to nine-tenths (9/10) of the Current Market Price of the Common
Stock calculated on the date of exercise of the Right with respect to which such
Note is being issued. Each Note shall bear interest from and after its date of
issuance at a rate set at or prior to the initial issuance of the first Note to
be issued by the Board, in its sole discretion, which may rely on the advice of
an independent investment banking firm. The rate of interest will be designed to
have such Note trade immediately following issuance at par. Notes will be issued
only in registered form, without coupons, in denominations of $10 and integral
multiples thereof. The Notes shall be subject to all the terms and conditions of
the Indenture, which is incorporated herein by reference.
(aa) "Original Rights" shall have the meaning set forth in Section
1(h)(ii) hereof.
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(bb) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, joint venture, trust, unincorporated
organization or other entity, and shall include any "group" as that term is used
in Rule 13d-5(b) under the Exchange Act.
(cc) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(dd) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(ee) "Record Date" shall have the meaning set forth in the first
preamble to this Agreement.
(ff) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(gg) "Rights" shall have the meaning set forth in the first preamble to
this Agreement.
(hh) "Rights Agent" shall mean the Person named as the "Rights Agent"
in the first paragraph of this Agreement until a successor Rights Agent shall
have become such pursuant to the applicable provisions hereof, and thereafter
"Rights Agent" shall mean such successor Rights Agent. If at any time there is
more than one Person appointed by the Company as Rights Agent pursuant to the
applicable provisions hereof, "Rights Agent" shall mean and include each such
Person.
(ii) "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.
(jj) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) (A) or (B).
(kk) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ll) "Section 13 Event" shall mean any event described in clauses (x),
(y), or (z) of Section 13(a) hereof.
(mm) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(nn) "Stock Acquisition Date" shall mean the first date (including,
without limitation, any such date which is on or after the date of this
Agreement and prior to the issuance of the Rights) of a public announcement
(which, for purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) under the Exchange Act) by the Company or
Acquiring Person that an Acquiring Person has become such.
(oo) "Subsidiary" shall have the meaning given to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Agreement.
(pp) "Substitute Consideration" shall have the meaning set forth in
Section 11(a)(iii) hereof.
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(qq) "Substitute Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(rr) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(ss) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(tt) "Unit" shall have the meaning set forth in the first preamble to
this Agreement.
Section 2. Appointment of Rights Agent. The Company has appointed the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent has accepted such appointment. The Company may from
time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the earliest of the Close of Business on (i) the tenth day
after the Stock Acquisition Date, (ii) the tenth Business Day, or such specified
or unspecified later date as may be determined by a majority of the Continuing
Directors and a majority of the Independent Directors, after the date that a
tender or exchange offer by any Person (other than an Exempt Person) is first
published or sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon consummation thereof, such
Person would be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, or (iii) immediately after the occurrence of an Adverse
Person Event (the earliest of (i), (ii) and (iii) being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the Close
of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates in substantially the
form of Exhibit A hereto (the "Rights Certificates"), evidencing one Right for
each share of Common Stock so held, subject to adjustment as provided herein. As
of and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates. In the event that an adjustment in the number of Rights per
share of the Common Stock has been made pursuant to Section 11(p) of this
Agreement, at the time of distribution of the Rights Certificates, the Company
may make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) of this Agreement) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights.
(b) As soon as practicable after the Record Date, the Company will send
a copy of a summary
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of rights, in substantially the form as initially attached to this Agreement as
Exhibit B, by first-class, postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Record Date, at the address of
such holder then shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any certificates
representing shares of Common Stock in respect of which Rights have been issued
shall also constitute the transfer of the Rights associated with such shares of
Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock
which are issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date. Rights shall also be issued to the extent provided in Section
22 hereof in respect of all shares of Common Stock which are issued (whether
originally issued or from the Company's treasury) after the Distribution Date
and prior to the Expiration Date. Certificates representing shares of Common
Stock in respect of which Rights are issued pursuant to the first sentence of
this Section 3(c) shall also be deemed to be certificates for Rights and,
commencing as soon as reasonably practical following the date of this Agreement,
shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between DUSA
Pharmaceuticals, Inc. (the "Company") and American Stock Transfer &
Trust Company (the "Rights Agent") dated as of September 26, 1997, (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who is,
was, or becomes an Acquiring Person, an Adverse Person or any Affiliate
or Associate of an Acquiring Person or an Adverse Person (as such terms
are defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and
void. The Rights shall not be exercisable, and shall be void so long as
held, by a holder in any jurisdiction where the requisite qualification
to the issuance to such holder, or the exercise by such holder, of the
Rights in such jurisdiction shall not have been obtained or be
obtainable.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and
registered holders of Common Stock shall also be the registered holders
of
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<PAGE> 8
the associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse thereof) shall each be substantially
in the form set forth in Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any securities exchange on which the Rights may from time
to time be listed, or to conform to usage. Subject to the provisions of Section
11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall
be dated as of the Distribution Date and on their face shall entitle the holders
thereof to purchase such number of Units as shall be set forth therein at the
price per Unit set forth therein (such exercise price per Unit, hereinafter
referred to as the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.
(b) Notwithstanding any other provision in this Agreement, any Rights
Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents
Rights beneficially owned by: (i) an Acquiring Person, an Adverse Person or any
Associate of Affiliate of an Acquiring Person or an Adverse Person, (ii) a
direct or indirect transferee of an Acquiring Person or an Adverse Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person or the Adverse Person becomes such, or (iii) a direct or indirect
transferee of an Acquiring Person or an Adverse Person (or of any such Associate
or Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person or the Adverse Person becoming such and receives such Rights
pursuant to either (A) a direct or indirect transfer (whether or not for
consideration) from the Acquiring Person or the Adverse Person to holders of
equity interests in such Acquiring Person or Adverse Person or to any Person
with whom such Acquiring Person or Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a direct or
indirect transfer which a majority of the Continuing Directors and a majority of
the Independent Directors have determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible)
the following legend (modified to apply to an Acquiring Person or an Adverse
Person, as applicable):
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an [Acquiring]
[Adverse] Person or an Affiliate or Associate of an [Acquiring]
[Adverse] Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights
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<PAGE> 9
represented hereby may become null and void in the circumstances
specified in Section 7(e) of the Rights Agreement.
Section 5. Execution, Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or any Vice President, either manually
or by facsimile signature, and shall have affixed thereto the Company's seal or
a facsimile thereof which shall be attested by the Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates shall be
countersigned, either manually or by facsimile signature by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificates may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal shareholder services office or offices
designated as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates upon exercise or transfer, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e), and
Section 14 hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the Expiration Date, any
Rights Certificate or Rights Certificates may be transferred, split up, combined
or exchanged for another Rights Certificate or Rights Certificates, entitling
the registered holder to purchase a like number of Units (or, following the
occurrence of a Triggering Event, other securities, cash or other assets as the
case may be) as the Rights Certificate or Rights Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights Certificates to be
transferred, divided, combined or exchanged at the principal shareholder
services office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such
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<PAGE> 10
surrendered Rights Certificate or Rights Certificates until the registered
holder shall have completed and signed the certificate contained in the form of
assignment set forth on the reverse side of each such Rights Certificate or
Rights Certificates and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e), and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part, at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase set
forth on the reverse side thereof and the certificate contained therein duly
executed, to the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment of the aggregate
Purchase Price with respect to the total number of Units (or, following the
occurrence of a Triggering Event, other securities, cash or other assets, as the
case my be) as to which such surrendered Rights are then exercisable, at or
prior to the earliest of (i) the Final Expiration Date, (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof or (iii) the time which
the Rights expire pursuant to Section 13(d) hereof (the earliest of (i), (ii),
(iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each Unit pursuant to the exercise of a
Right shall initially be $50.00, and shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase set forth on the reverse side
thereof and the certificate contained therein duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price for each
Unit (or, following the occurrence of a Triggering Event, other securities, cash
or other assets, as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, promptly (i) (A) requisition from
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<PAGE> 11
any transfer agent of the shares of Common Stock (or make available, if the
Rights Agent is the transfer agent for the Common Stock) certificates for the
total number of one one-tenths of a share of Common Stock which constitute part
of the Units to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Common Stock issuable as
part of the Units upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number on one one-tenths of a share of Common Stock as are to be purchased (in
which case certificates for the shares of Common Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company will direct the depositary agent to comply with such request, (ii)
requisition from any trustee or securities registrar under the Indenture (or
make available, if the Rights Agent is the trustee or securities registrar under
the Indenture) Notes for the total principal amount of Notes which constitute
part of the Units to be purchased (and the Company hereby irrevocably authorizes
the trustee or securities registrar under the Indenture to comply with all such
requests), (iii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares of Common Stock or fractional Notes in
accordance with Section 14 hereof, (iv) after receipt of such certificates or
depositary receipts for shares of Common Stock and such Notes, cause the same to
be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (v) after receipt thereof, deliver such cash, if any, to or upon the
order of the registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) shall be made in cash or by certified check, cashier's check or bank
draft payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including shares of Common Stock) of the
Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 6 and Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are or were formerly beneficially owned on or after the earlier of
the Distribution Date or the Stock Acquisition Date by (i) an Acquiring Person,
an Adverse Person or an Associate or Affiliate of an Acquiring Person or an
Adverse Person, (ii) a direct or indirect transferee of any such Acquiring
Person or Adverse Person (or of any such Associate or Affiliate) who becomes a
transferee after such Acquiring Person or Adverse Person becomes such, or (iii)
a direct or indirect transferee of any such Acquiring Person or Adverse Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or the Adverse Person becoming such and
receives such Rights pursuant to either (A) a direct or indirect transfer
(whether or not for consideration) from the Acquiring Person or Adverse Person
to holders of equity interests in such Acquiring Person or
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<PAGE> 12
Adverse Person or to any Person with whom such Acquiring Person or Adverse
Person has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a direct or indirect transfer which a majority of the
Continuing Directors and a majority of the Independent Directors have determined
is part of a plan, arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become null and void without
any further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or an Adverse Person or any of their respective Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
(g) Notwithstanding any statement to the contrary contained in this
Agreement or in any Rights Certificate, if the Distribution Date or the Stock
Acquisition Date shall occur prior to the Record Date, the provisions of this
Agreement, including without limitation Section 3 and 11(a)(ii), shall be
applicable to the Rights upon their issuance to the same extent such provisions
would have been applicable if the Record Date were the date of this Agreement.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Common Stock
(and, following the occurrence of a Triggering Event, other securities or out of
its authorized and issued shares held in its treasury), the
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<PAGE> 13
number of shares of Common Stock (and following the occurrence of a Triggering
Event, other securities) that, as provided in this Agreement including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Common Stock or Notes (and, following the
occurrence of a Triggering Event, other securities) issuable and deliverable
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares of Common Stock, all Notes and
other securities issuable to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Triggering Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement, a
registration statement under the Act, with respect to the securities purchasable
upon exercise of the Rights on an appropriate form (ii) cause such registration
statement to become effective as soon as practicable after such filing and (iii)
cause such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such securities, and (B) the
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. In addition, if the
Company shall determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability of the
Rights until the earlier such time as such registration statement has been
declared effective. Upon any suspension of exercisability of the Rights referred
to in this Section 9(c), the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable, and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to such holder,
or the exercise by such holder, of the Rights in such jurisdiction shall not
have been obtained or be obtainable.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all one one-tenths of a share of Common Stock
and all Notes (and, following the occurrence of a Triggering Event, other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares and of such Notes and of such other securities
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and that all shares shall be fully paid and nonassessable and all Notes
and other forms of indebtedness shall be valid, binding and enforceable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and
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<PAGE> 14
all federal and state transfer taxes and charges which may be payable in respect
of the issuance or delivery of the Rights Certificates, any certificates for a
number of one one-tenths of a share of Common Stock or the Notes (or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of a number of one one-tenths of a share of
Common Stock or Notes (or other securities, as the case may be) in respect of a
name other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for a number of one one-tenths of a share of Common Stock or any
Notes (or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Record Date for Securities Issued Upon Exercise. Each
Person in whose name any certificate for a number of one one-tenths of a share
of Common Stock and any Note (or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Common Stock and such Notes (or
other securities, as the case may be) represented thereby on, and such
certificate and such Note shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Common
Stock or Note (or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) or such Notes (or other securities, as
the case may be) on, and such certificate or Note shall be dated, the next
succeeding Business Day on which the Common Stock or Note (or other securities,
as the case may be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a stockholder or holder of Notes of the
Company with respect to shares or Notes for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends, payments of interest or principal or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) pay or declare a dividend on the Common Stock payable in
shares of Common Stock, (B) subdivide (by a stock split or otherwise) the
outstanding Common Stock into a larger number of shares, (C) combine (by a
reverse stock split or otherwise) the outstanding Common Stock into a smaller
number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in effect at the time of the record
date for such
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<PAGE> 15
dividend or of the effective date of such subdivision, combination or
reclassification, and the number of shares of Common Stock and that fraction of
the Current Market Price which is used to calculate the principal amount of the
Note issuable upon purchase of a Unit on such date (or the number and kind of
other securities, as the case may be), shall be proportionately adjusted so that
if a holder of Rights after such time were to exercise that number of Rights (or
fraction thereof) which would result in the aggregate amount of the Purchase
Price payable upon such exercise (at the Purchase Price then in effect) being
equal to the amount of the Purchase Price that was payable prior to such time
upon exercise of a Right, he would be entitled to receive the aggregate number
of shares of Common Stock and Notes in an aggregate principal amount (or the
number and kind of other securities, as the case may be) which, if such Right
had been exercised immediately prior to such date and at a time when the Common
Stock and Note (or other capital stock, as the case may be) transfer books of
the Company were open, he would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Person shall have become an Acquiring Person and
the time period in which the Board of Directors may
redeem the rights pursuant to Section 23(a) shall
have expired; or
(B) a majority of the Independent Directors shall declare
any Person to be an Adverse Person upon a
determination that such Person, alone or together
with its Affiliates and Associates, has, at any time
after the Record Date, become the Beneficial Owner of
an amount of Common Stock which the Independent
Directors determine to be substantial (which amount
shall in no event be less than 10% of the shares of
Common Stock then outstanding) and a determination by
a majority of the Continuing Directors and a majority
of the Independent Directors, after reasonable
inquiry and investigation, including consultation
with such persons as such directors shall deem
appropriate, that (a) such Beneficial Ownership is
detrimental to the maintenance, renewal, or
acquisition of the Company's governmental or
regulatory approvals, agreements, permits, licenses
or registrations, or (b) such persons were convicted
in criminal proceedings or are named defendants of
pending criminal proceedings (excluding minor
offenses) relating to the pharmaceutical industry or
any other business regulated by any Federal, state or
local governmental agency, or (c) such persons are
subject to any order, judgment, decree or debarment,
not subsequently reversed, suspended, or vacated, of
any court of competent jurisdiction or governmental
or regulatory authority permanently or temporarily
enjoining them from, or otherwise limiting such
person or entity from engaging in, any type of
business practice relating to the pharmaceutical
industry or any other business regulated by any state
or local
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<PAGE> 16
governmental agency.
proper provision shall be made so that promptly upon the occurrence of any event
described in Section 11(a) (ii) (A) or (B) hereof, each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of Units, such
number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number
of one-tenths of a share of Common Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, whether
or not such Right was then exercisable, and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by 50%
of the Current Market Price per share of Common Stock on the date of such first
occurrence (such number of shares being referred to as the "Adjustment Shares").
(iii) In lieu of issuing shares of Common Stock in accordance
with Section 11(a)(ii) hereof, the Company may, if a majority of the Continuing
Directors, in their sole discretion, and a majority of the Independent
Directors, in their sole discretion, determine that the action described
immediately below in this Section 11(a)(iii) is necessary or appropriate and not
contrary to the interests of the holders of Rights other than any Acquiring
Person, any Adverse Person and any Affiliate or Associate of any such Person
(and, in the event that the number of shares of Common Stock which are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purpose other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the Company shall): (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price (such
excess being referred to as the "Spread"), and (B) with respect to each Right
(subject to Section 7(e) hereof), make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2)
a reduction in the Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares, or units of shares, of
preferred stock which the Board has deemed to have the same value as shares of
Common Stock (such shares for preferred stock being referred to as "Common Stock
Equivalents"), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing (whichever substituted, the "Substitute
Consideration"), having an aggregate value equal to the Current Value, as
adjusted (less the amount of any reduction in the Purchase Price where such
aggregate value has been determined by the Board based upon the advice of a
nationally recognized investment banking firm selected by the Board; provided,
however, if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the later of (x)
the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If, after the
occurrence of a Section 11(a)(ii) Event, the number of shares
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<PAGE> 17
of Common Stock that are authorized by the Company's certificate of
incorporation, as amended, but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof and
the Board shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a) (ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period, as it may
be extended, being referred to herein as the "Substitution Period"). To the
extent that the Company determines that action is to be taken pursuant to the
preceding provisions of this Section 11(a) (iii), the Company (x) shall provide,
subject to Section 7 (e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such provisions and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common Stock
shall be the Current Market Price per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the per share or per unit value of any Common Stock
Equivalent shall be deemed to equal the Current Market Price per share of the
Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock entitling them to
subscribe for or purchase Common Stock (or shares having the same rights,
privileges and preferences as the shares of Common Stock ("Equivalent Common
Stock")) or securities convertible into Common Stock or Equivalent Common Stock
at a price per share of Common Stock or per share of Equivalent Common Stock (or
having a conversion price per share, if a security convertible into Common Stock
or Equivalent Common Stock) less than the Current Market Price per share of
Common Stock on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on such record date,
plus the number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock and/or Equivalent Common Stock so to
be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price, and
the denominator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of additional shares of Common
Stock and/or Equivalent Common Stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Common Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the event that
such rights or warrants are not so issued, the Purchase
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<PAGE> 18
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation) of securities (other than Common Stock and rights,
options or warrants referred to in Section 11(b)), evidences of indebtedness,
cash (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable in
Common Stock, but including any dividend payable in stock other than Common
Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
Current Market Price per share of Common Stock on such record date, less the
fair market value (as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the securities, cash, assets or evidences of indebtedness so to be distributed
or of such subscription rights or warrants applicable to a share of Common Stock
and the denominator of which shall be such Current Market Price per share of
Common Stock. Such adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price which would have been
in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of (i) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such Common
Stock (other than the Rights), or (ii) any Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market Price shall be
properly adjusted to take into account ex-dividend trading. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the Nasdaq National Market (the "Nasdaq") or, if the shares of Common
Stock are not listed or admitted to trading on Nasdaq as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the
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<PAGE> 19
average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. through Nasdaq
or such other system then in use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Common Stock selected by the Board. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such date
as determined in good faith by the Board shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange (or Nasdaq)
on which the shares of Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of Common Stock are not listed
or admitted to trading on any national securities exchange, a Business Day. If
the Common Stock is not publicly held or not so listed or traded, Current Market
Price per share shall mean the fair value per share as determined in good faith
by the Board, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes, and shall be binding
on the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share, as the case may
be. Notwithstanding the first sentence of this Section 11(e) any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment, or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Section 11 and the
provisions of Sections 7, 9, 10, 12, 13 and 14 hereof with respect to the Common
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, one Unit, consisting of that number of
shares of Common Stock and a Note in principal amount equal to that fraction of
the Current Market Price of the Common Stock on the date of exercise purchasable
from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, one Unit, consisting of that number of
shares
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<PAGE> 20
of Common Stock (calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of shares covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price and one Note in principal amount equal to that fraction (calculated to the
nearest ten-thousandth) of the Current Market Value of the Common Stock on the
date of exercise obtained by (1) multiplying (q) such fraction of the Current
Market Price as was applicable immediately prior to this adjustment, by (r) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (2) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of shares of Common Stock and in the fraction of the Current Market Price
of the Common Stock on the date of exercise used to calculate the principal
amount of the Note purchasable as a Unit upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of Rights shall be
exercisable for one Unit, consisting of that number of shares of Common Stock
and a Note in principal amount equal to that fraction of the Current Market
Price of the Common Stock on the date of exercise for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
herein (and may bear, at the option of the Company, the adjusted Purchase Price)
and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the Units issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per
Unit and the Units which were expressed in the initial Rights Certificates
issued hereunder.
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<PAGE> 21
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated value, if any, of the number of shares
of Common Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Common Stock and Notes and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the shares of
Common Stock and Notes and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or Notes or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment, the Board shall determine to be
advisable in order that any (i) consolidation or subdivision of the Common
Stock, (ii) issuance wholly for cash of any shares of Common Stock at less than
the Current Market Price, (iii) issuance wholly for cash of shares of Common
Stock or securities which by their terms are convertible into or exchangeable
for shares of Common Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Common Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(n),
and Section 11(o) hereof), (ii) merge with or into any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section 11(n)
and Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction or a series of related transactions,
asset or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to, any other Person or
Persons (other than the Company or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(n) and Section 11(o)hereof),
if (x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
stockholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates and
Associates.
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<PAGE> 22
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or Section 26 hereof, take (or
permit any subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time prior to the Distribution Date (i) pay
a dividend or distribution on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, the number
of Rights shall be proportionately adjusted so that following any such event one
Right shall thereafter be associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date.
(q) The failure by the Independent Directors to declare a Person to be
an Adverse Person following such Person becoming the Beneficial Owner of 10% or
more of the outstanding Common Stock of the Company shall not imply that such
Person is not an Adverse Person or limit such directors' rights at any time in
the future to declare such Person to be an Adverse Person.
(r) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time prior to the Distribution Date
consolidate with, or merge with or into, any other Person for the primary
purpose of a change of domicile of the Company, and, in connection with such
consolidation or merger, all of the outstanding shares of Common Stock of the
Company shall be changed into or exchanged for shares of Common Stock of the
surviving corporation of such consolidation or merger (the "Surviving
Corporation"), then proper provision shall be made so that Rights shall be
associated with each share of Common Stock of the Surviving Corporation, except
as provided in Section 7(e) hereof, such that the number of Rights associated
with each share of Common Stock of the Surviving Corporation following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock of the
Surviving Corporation which the shares of Common Stock were changed into or
exchanged for pursuant to the consolidation or merger. Following such a
consolidation or merger, this Agreement shall remain in effect and all
references to the Company shall be deemed to be references to the Surviving
Corporation.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Common Stock and each trustee under the Indenture, a copy of such certificate,
and (c) mail a brief summary thereof to each holder of a Rights Certificate (or,
if prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 25 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until
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<PAGE> 23
it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Stock Acquisition Date, (x) the
Company shall, directly or indirectly, consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11 (n) and Section 11(o) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or merger,
(y) any Person (other than a subsidiary of the Company in a transaction which
complies with Section 11(n) and Section 11(o) hereof) shall consolidate with, or
merge with or into, the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in connection with
such consolidation or merger, all or part of the outstanding shares of Common
Stock shall be changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more transactions
each of which complies with Section 11(n) and Section 11(o) hereof), then, and
in each such case (except as may be contemplated by Section 13(d) hereof),
proper provision shall be made so that: (i) each holder of a Right, (except as
otherwise provided in this Agreement) shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid, non-assessable and freely tradeable shares of Common
Stock of the Principal Party, not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of one-tenths
of a share of Common Stock for which a Right is exercisable immediately prior to
the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of one-tenths of a share of Common Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by (2) 50% of the Current Market Price
per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any
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<PAGE> 24
Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a) hereof, the Person that is the issuer
of any securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any such case, (1) if
the Common Stock of such Person is not at such time and has not been
continuously over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
common Stock having the greatest aggregate market value; or (3) if none of the
Common Stock of such other Persons has been so registered, "Principal Party"
shall refer to whichever of such other Persons (other than an individual) is the
Person having the equity securities with the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger of sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act.
(iii) use its best efforts to qualify or register the Rights
and the securities
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<PAGE> 25
purchasable upon exercise of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate, and
(iv) use its best efforts to list the Rights and the
securities purchasable upon exercise of the Rights on a national securities
exchange,
(v) the Company and the Principal Party shall have furnished
to the Rights Agent an opinion of independent counsel stating that such
supplemental agreement is a legal, valid and binding agreement of the Principal
Party enforceable against the Principal Party in accordance with its terms; and
(vi) the Company and the Principal Party shall have filed
with the Rights Agent a certificate of a nationally recognized firm of
independent accountants setting forth the number of shares of Common Stock of
such issuer which may be purchased upon the exercise of each Right after the
occurrence of a Section 13 Event. The provisions of this Section 13 shall
similarly apply to successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall occur at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a) hereof.
(d) After the occurrence of a Section 13 Event (i) Principal Party
shall be liable for, and shall assume, by virtue of such occurrence of a Section
13 Event and without the necessity of any further act, all the obligations and
duties of the Company pursuant to this Agreement, (ii) the term "Company" as
used in this Agreement shall thereafter be deemed to refer to such Principal
Party, and (iii) such Principal Party shall take all steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common Stock
in accordance with Section 9) in connection with such occurrence of a Section 13
Event as necessary to ensure that the provisions of this Agreement shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights.
Section 14. Fractional Rights, Fraction Shares and Fractional Notes.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date pursuant to Section 11(i) hereof, or to
distribute Rights Certificates which evidence fractional Rights. If the Company
decides not to issue fractional Rights, there shall be paid in lieu thereof to
the registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of this
Section 14(a), the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price of
the Rights for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on Nasdaq or, if the Rights are not listed or admitted to trading on
Nasdaq, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading, or if the Rights are not
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listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board.
If on any such date no such market maker is making a market in the Rights the
fair value of the Rights on such date as determined in good faith by the Board
shall be used.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. Fractions of shares of Common Stock
may, at the election of the Company, be evidenced by depository receipts,
pursuant to an appropriate agreement between the Company and a depository
selected by it, provided that such agreement shall provide that the holders of
such depository receipts shall have the rights, privileges and preferences to
which they are entitled as beneficial owners of the Common Stock. In lieu of
fractional shares of Common Stock, the Company may at its option (i) issue scrip
or warrants in registered form (either represented by a certificate or
uncertificated) or in bearer form (represented by a certificate) which shall
entitle the holder to receive a full share of Common Stock upon the surrender of
such scrip or warrants aggregating a full share of Common Stock, or (ii) pay to
the registered holders of Rights Certificates at the time such Rights
Certificates are exercised as provided in this Agreement an amount in cash equal
to the same fraction of the current market value of a share of Common Stock. For
purposes of this Section 14(b), the current market value of one share of Common
Stock shall be the closing price per share of Common Stock (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) Notwithstanding anything to the contrary contained herein, the
Company shall not be required to issue Notes in denominations other than $10 or
integral multiples thereof and the Company may pay cash in lieu of issuing Notes
in denominations other than $10 or integral multiples thereof in an amount equal
the difference between the principal amount of the Notes otherwise issuable and
the integral multiple of $10 which is nearest to, but not in excess of, such
amount.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights, any fractional shares or any
fractional Notes upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
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of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal shareholder services office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the forms of assignment set forth on the reverse
thereof and the certificates contained herein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(d) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Common Stock or any Note or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder or a holder of a Note of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders or holders of
Notes (except as provided in Section 24 hereof), or to receive dividend,
subscription rights or payments of principal or interest, or
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otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or Note or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and
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in case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or Adverse
Person and the determination of Current Market Price) be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, or the Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or the authorization
of any Notes to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Common Stock will, when so issued, be validly
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<PAGE> 30
authorized and issued, fully paid and nonassessable or any Notes will, when so
issued, be validly authorized and issued, binding and enforceable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, or Secretary of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer. Any application by the Rights Agent for written instructions from the
Company may, at the Rights Agent's option, set forth in writing any action
proposed to be taken by, or omission of, the Rights Agent under this Agreement
and the date on and/or after which such action shall be taken or omission shall
be effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than three Business Days after the date the Company actually
receives such application, unless the Company shall have consented in writing to
an earlier date) unless, prior to taking any such action (or the effective date
in the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise
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or transfer, the certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent
shall not take any further action with respect to such requested exercise of
transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days notice in writing mailed to the Company, and to each
transfer agent of the Common Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon thirty (30) days notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or of the State of New Jersey
or the State of New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of New Jersey or the State of New York), in good standing, having a
principal office in the State of New Jersey or the State of New York, which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $10,000,000 or (b) an Affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by the Board to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance with the
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provisions of this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the earlier of
(i) the Close of Business on the tenth day following the Stock Acquisition Date
or, if there are Continuing Directors then in office, such later date as may be
approved by the Board of Directors of the Company with the concurrence of a
majority of Continuing Directors and Independent Directors, or (ii) the
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of $.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, that the Board may
not redeem any Rights following an Adverse Person Event; and provided further,
that, if the Board authorizes redemption of the Rights in either of the
circumstances set forth in clauses (i) and (ii) below, then there must be
Continuing Directors then in office and such authorization shall require the
concurrence of a majority of the Continuing Directors and a majority of the
Independent Directors: (i) such authorization occurs on or after the time a
Person becomes an Acquiring Person, or (ii) such authorization occurs on or
after the date of a change (resulting from a proxy or consent solicitation
effected in compliance with applicable law and the requirements of any national
securities exchange on which the Common Stock is listed) in a majority of the
directors in office at the commencement of such solicitation if any Person who
is a participant in such solicitation has stated (or, if upon the commencement
of such solicitation, a majority of the Board has determined in good faith) that
such Person (or any of its Affiliates or Associates) intends to take, or may
consider taking, any action which would result in such Person becoming an
Acquiring Person or which would cause the occurrence of a Triggering Event
unless, concurrent with such solicitation, such Person (or one or more of its
Affiliates or Associates) is making a cash tender offer pursuant to a Schedule
14D-1 (or any successor form) filed with the Securities and Exchange Commission
for all outstanding shares of Common Stock not beneficially owned by such Person
(or by its Affiliates or Associates). Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company's right
of redemption hereunder has expired. The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the Current Market
Price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board.
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(b) Immediately upon the action of the Board ordering the redemption of
the Rights, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly after
the action of the Board ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Transfer Agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
holders of Common Stock or to make any other distribution to the holders of
Common Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Common
Stock rights or warrants to subscribe for or to purchase any additional shares
of Common Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any direct or indirect consolidation or merger
into or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(n) and Section 11(o) hereof), or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(n) and Section 11(o) hereof), or (v) to effect
the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days prior to the record date for
determining holders of the shares of Common Stock for purposes of such action,
and in the case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Common Stock, whichever shall be the earlier.
Notwithstanding anything in this Agreement to the contrary, prior to the
Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities of
the Company, including the Rights, for purposes of this Agreement and no other
notice need be given. The failure to give notice as required by this Section 24
or any defect therein shall not affect the legality or validity of this action
taken by the Company or the vote upon any such action.
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(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Common
Stock shall, to the extent appropriate, also be deemed thereafter to refer to
other securities.
Section 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
DUSA Pharmaceuticals, Inc.
181 University Avenue, Suite 1208
Toronto, Ontario M5H 3M7 CANADA
Attention: D. Geoffrey Shulman, President
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
American Stock Transfer & Trust Co.
40 Wall Street
New York, NY 10005
Attention: Herbert Lemmer
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments, Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, at any time and from time to time if the Company so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary to
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desirable and which shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person, an Adverse Person or an
Affiliate or Associate of an Acquiring Person or an Adverse Person); provided,
this Agreement may not be supplemented or amended (A) whether before or after
the Distribution Date, to lengthen a time period relating to when the Rights may
be redeemed or to modify the ability (or inability) of the Board to redeem the
Rights, in either case at such time as the Rights are not then redeemable or (B)
after the Distribution Date to lengthen, pursuant to clause (iii) of this
sentence, any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, or the benefits to, the
holders of Rights (other than an Acquiring Person, an Adverse Person or an
Affiliate or Associate of an Acquiring Person or an Adverse Person). Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Final Expiration Date, the Purchase Price or the number of Units, or the number
of shares of Common Stock or the calculation of the principal amount or interest
rate of the Notes constituting such Units, for which a Right is exercisable, or
which affects any right vested in the Rights Agent. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board (with, where specifically provided for herein,
the concurrence of the Continuing Directors and the Independent Directors), the
Continuing Directors or the Independent Directors, as the case may be, shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board (with, where
specifically provided for herein, the concurrence of the Continuing Directors
and the Independent Directors), the Continuing Directors or the Independent
Directors, as the case may be, shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors and the Independent Directors), the
Continuing Directors and the Independent Directors, as the case may be, or to
the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights, to declare that a Person is an
Adverse Person, to amend the Agreement or to limit the Substitute Consideration
or Spread payable). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board (with, where
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<PAGE> 36
specifically provided for herein, the concurrence of the Continuing Directors
and the Independent Directors), the Continuing Directors or the Independent
Directors, as the case may be, in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board, the Continuing Directors or the
Independent Directors to any liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Continuing Directors, in their good faith judgment, and a majority of the
Independent Directors, in their good faith judgment, determine that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the
tenth day following the date of the later of such determinations by the
Continuing Directors and the Independent Directors.
Without limiting the foregoing, if any provision of this Agreement
requiring that a determination be made by less than the entire Board is held by
a court of competent jurisdiction of other authority to be invalid, void or
unenforceable, such determination shall then be made by the entire Board in
accordance with applicable law and the Company's articles of organization and
bylaws.
Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New Jersey and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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<PAGE> 37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the date first above written.
Attest: DUSA PHARMACEUTICALS, INC.
/s/ Nanette W. Mantell By: /s/ D. Geoffrey Shulman
Secretary D. Geoffrey Shulman
President
Attest: AMERICAN STOCK TRANSFER & TRUST CO.
/s/ Susan Silber By: /s/ Herbert Lemmer
Vice-Secretary Herbert Lemmer
Vice-President
37
<PAGE> 1
INDENTURE
THIS INDENTURE, dated as of September 26, 1997, between DUSA
Pharmaceuticals, Inc., a corporation duly organized and existing under the laws
of the State of New Jersey (herein called the "Company"), having its principal
office at 181 University Avenue, Suite 1208, Toronto, Ontario M5H 3M7, Canada,
and American Stock Transfer & Trust Co., a corporation duly organized and
existing under the laws of the State of New York, as Trustee (herein called the
"Trustee"), having its principal office at 40 Wall Street, New York, New York
10005.
WITNESSETH:
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as this Indenture provides.
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually covenanted and
agreed, for the benefit of the other party and for the equal and proportionate
benefit of all Holders of the Securities, or series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions.
(a) For all purposes of this Indenture and any indenture
supplemental hereto, except as otherwise expressly provided or unless the
context otherwise requires:
(i) the terms defined in this Article have the
meanings assigned to them in this Article and include the plural as
well as the singular;
(ii) all other terms used herein which are defined in
the Trust Indenture Act or the Securities Act, either directly or by
reference therein, have (except as herein otherwise expressly provided
or unless the context otherwise expressly provided or unless the
context otherwise requires) the meanings assigned to them therein as in
force on the date of this Indenture;
(iii) all accounting terms not otherwise defined
herein have the meanings
<PAGE> 2
assigned to them in accordance with generally accepted
accounting principles and, except as otherwise herein
expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation; and
(iv) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
(b) Certain terms, used principally in Article Six, are
defined in that Article.
(c) The following terms have the following meanings:
(i) "Act", when used with respect to any Holder, has
the meaning specified in Section 1.4.
(ii) "Affiliate" of any specified Person means any
other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such
specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means
the power to direct 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.
(iii) "Authenticating Agent" means any Person
authorized by the Trustee to act on behalf of the Trustee to
authenticate Securities.
(iv) "Board of Directors" means either the board of
directors of the Company, the executive committee of such
board or any duly authorized committee of such board.
(v) "Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such
certification and delivered to the Trustee.
(vi) "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions in the city where the Trustee maintains
its Corporate Trust office are authorized or obligated by law
to close.
(vii) "Capitalized Lease Obligation" means
Indebtedness represented by obligations under a lease that is
required to be capitalized for financial reporting purposes in
accordance with generally accepted accounting principles and
the amount
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<PAGE> 3
of such Indebtedness shall be the capitalized amount of such
obligations determined in accordance with such principles.
(viii) "Capital Stock" means any and all shares,
interests, participations or other equivalents (however
designated) or corporate stock.
(ix) "Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Securities Exchange Act of 1934, or, if at any time after
the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties
at such time.
(x) "Company" means the Person named as the "Company"
in the first paragraph of this Indenture until a successor
corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
(xi) "Company Request" or "Company Order" means a
written request or order signed in the name of the Company by
its Chairman of the Board, President or a Vice President, and
by its Treasurer, an Assistant Controller, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
(xii) "Corporate Trust Office" means the principal
office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office
at the date of execution of this Indenture is located at 40
Wall Street, New York, New York 10005.
(xiii) "Corporation" includes corporations,
associations, companies and business trusts.
(xiv) "Event of Default" has the meaning specified in
Section 5.1.
(xv) "Holder" or "Securityholder" or similar terms
means a Person in whose name a Security is registered in the
Security Register.
(xvi) "Indebtedness" means (A) any liability of any
person (1) for borrowed money, (2) evidenced by a note,
debenture or similar instrument (including a purchase money
obligation) given in connection with the acquisition of any
property or assets (other than inventory or similar property
acquired in the ordinary course of business), including
securities, or (3) for the payment of money relating to a
Capitalized Lease Obligation; (B) any liability of others
described in the preceding clause (A) which the person has
guaranteed or which is otherwise its legal liability; and (C)
any amendment, renewal, extension or refunding of any
liability of the types referred to
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<PAGE> 4
in clauses (A) and (B) above.
(xvii) "Indenture" means this instrument as
originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions
hereof and shall include the terms of particular series of
Securities established as contemplated by Section 3.1.
(xviii) "Notes" means any Security of the series
designated "One Year Notes" issued under this Indenture and
pursuant to the Rights Agreement and substantially in the form
of Exhibit 1 hereto.
(xix) "Officers Certificate" means a certificate
signed by the Chairman of the Board, President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an
Assistant Secretary, of the Company, and delivered to the
Trustee.
(xx) "Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Company and who shall be
acceptable to the Trustee.
(xxi) "Original Issue Date" of any Security (or any
portion thereof) means the earlier of (A) the date of such
Security or (B) the date of the first Security (or portion
thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or
substitution, provided, that the "Original Issue Date" for the
Notes shall be the first date on which any such Note is
issued.
(xxii) "Outstanding" when used with respect to
Securities or any series of Securities, means, as of the date
of determination, all Securities or all Securities of such
series, as the case may be, theretofore authenticated and
delivered under this Indenture, except:
(A) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;
(B) Securities, or portions thereof, for
whose payment or redemption money in the necessary
amount has been theretofore deposited with the
Trustee or any Paying Agent for the Holders of such
Securities; provided that, if such Securities are to
be redeemed prior to the maturity thereof, notice of
such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the
Trustee has been made; and
(C) Securities which have been paid pursuant
to Section 3.6 or in exchange for or in lieu of which
other Securities have been authenticated and
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<PAGE> 5
delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to
it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid
obligations of the Company; provided, however, that
in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have
given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether
the Trustee shall be protected in relying upon any
such request, demand, authorization, direction
notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or
any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
(xxiiii) "Paying Agent" means any person authorized
by the Company to pay the principal of (and premium, if any)
or interest on any Securities on behalf of the Company.
(xxiv) "Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or association or
government or any agency or political subdivision thereof.
(xxv) "Predecessor Security" of any particular
Security means every previous Security evidencing all or a
portion of the same debt as that evidenced by such particular
Security, and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security.
(xxvi) "Redemption Date", when used with respect to
any Security to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.
(xxvii) "Redemption Price", when used with respect to
any Security to be redeemed, means the price at which it is to
be redeemed pursuant to this Indenture.
(xxviii) "Responsible Officer", when used with
respect to the Trustee, means any officer in the Corporate
Trust Office or any other officer of the Trustee customarily
performing functions similar to those performed by any of the
above designated officers and also means, with respect to a
particular corporate trust matter,
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<PAGE> 6
any other officer to whom such matter is referred because of
his knowledge or any familiarity with the particular subject.
(xxix) "Rights Agreement" means the Rights Agreement
dated as of September 26, 1997, between the Company and
American Stock Transfer & Trust
Co., as Rights Agent.
(xxx) "Securities" has the meaning stated in the
first recital of this Indenture and more particularly means
any securities authenticated and delivered under this
Indenture.
(xxxi) "Security Register" has the meaning specified
in Section 3.5.
(xxxii) "Senior Indebtedness" means, with respect to
the Securities of a series which are subordinated in
accordance with their terms as contemplated by Section 3.1,
the principal or interest on and other amounts due on or in
connection with (A) any Indebtedness of the Company designated
in accordance with Section 3.1 as ranking senior to the
Securities of that series, whether outstanding on the date of
this Indenture or hereafter created, incurred, assumed or
guaranteed in any manner by the Company or in effect
guaranteed by the Company through an agreement to purchase or
otherwise; and (B) deferrals, renewals, extensions or
refundings of, or amendments, modifications or supplements to,
Indebtedness of the kind described in the preceding clause
(A), unless, in the case of any particular Indebtedness,
deferral, renewal, extension, refunding, amendment,
modification or supplement, the instrument creating or
evidencing the same or the assumption or guarantee thereof
expressly provides that such Indebtedness, deferral, renewal,
extension, refunding, amendment, modification or supplement
shall not be senior in right of payment to the Securities of
that series.
(xxiiii) "Subsidiary" means a corporation more than
50% of the outstanding voting stock of which is owned,
directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company or by one or more other
Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as
no senior class or stock has such voting power by reason of
any contingency.
(xxxii) "Trustee" means the Person named as the
"Trustee" in the first paragraph of this Indenture until a
successor Trustee shall have become such with respect to one
or more series of Securities pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall
mean and include each Person who is then a Trustee hereunder,
and if at any time there is more then one such Person,
"Trustee" shall mean and include each such Person, and
"Trustee", as used with respect to the Securities of any
series, shall mean the Trustee with respect to
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<PAGE> 7
Securities of that series.
(xxiv) "Trust Indenture Act" means the Trust
Indenture Act of 1939 as amended, as in force at the date as
of which this instrument was executed, except as provided in
Section 9.5.
Section 1.2 Compliance Certificates and Opinions.
(a) Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and, if requested by the Trustee, an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
(b) Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(i) a statement that each individual signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
individual, 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
(iv) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been
complied with.
Section 1.3. Form of Documents Delivered to Trustee.
(a) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
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<PAGE> 8
(b) Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of, or
representations by, counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 1.4 . Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the
Security Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
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<PAGE> 9
Section 1.5 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(a) The Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, or
(b) The Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to the attention of its President at 181 University Avenue, Suite
1208, Toronto, Ontario M5H 3M7, Canada, or at any other address previously
furnished in writing to the Trustee by the Company.
Section 1.6. Notice to Holders; Waiver.
(a) Where this Indenture provides for notices to Holders of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date, and not earlier then the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
(b) In any case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification of every purpose hereunder.
Section 1.7. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.
Section 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only
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and shall not affect the construction hereof.
Section 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 1.12. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New Jersey.
Section 1.13. Legal Holidays.
In any case where the due date of interest on or principal of any
Security or the Redemption Date of any Security shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) 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 such due date or Redemption Date; provided
that no interest shall accrue for the period from and after such prior date.
ARTICLE TWO
SECURITY FORMS
Section 2.1. Forms Generally.
(a) The Securities of each series and the Trustee's
certificate of authentication shall be in substantially the form set forth in
this Article (except that the Notes shall be substantially in the form set forth
in Exhibit 1 hereto), with the Trustee's certificate of authentication on the
face of the
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Security, or in such other form as shall be established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with any law or with any rules made
pursuant thereto or with any rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
to be necessary or appropriate, as evidenced by their execution of the
Securities.
(b) The definitive Securities shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities, as evidenced by
their execution of such Securities.
Section 2.2. Form of Face of Security.
Number [ ] $[ ]
[ ]% [Title of the Series of the Security]
DUSA Pharmaceuticals, Inc.
[ ]% [ ]%
Due Due
DUSA Pharmaceuticals, Inc., a corporation duly organized and existing
under the laws of the State of New Jersey (herein referred to as the "Company"),
for value received, hereby promises to pay to , or his or its registered
assigns, the principal sum of , at the office or agency of the Company
maintained for that purpose in , on , 19 , 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, on each
Interest Payment Date (as defined herein) on said principal sum at said office
or agency, in like coin or currency, at the rate per annum specified in the
title of this [indebtedness] from the Interest Payment Date, next preceding the
date of this [indebtedness] 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 [indebtedness] or unless no
interest has been paid or duly provided for on the [indebtedness] since the
Original Issue Date (as defined in the Indenture referred to on the reverse
hereto) of this [indebtedness] then from such Original Issue Date, until payment
of said principal sum has been made or duly provided for. The interest so
payable on any Interest Payment Date will, subject to certain exceptions
provided in the Indenture, be paid to the person in whose name this Note is
registered at the close of business on the fifteenth day preceding such Interest
Payment Date (the "Record Date" corresponding to such Interest Payment Date),
whether or not such Interest Payment Date is a business day, and may, at the
option of the Company, be paid by check mailed to the registered address of such
person. Notwithstanding the foregoing, if the date hereof is after the Record
Date corresponding to an Interest Payment Date and before such Interest Payment
Date, this
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[indebtedness] shall bear interest from such Interest Payment Date. An "Interest
Payment Date" shall be the and of each year, until the principal
hereof is paid or made available for payment.
Reference is made to the further provisions of this [indebtedness] set
forth on the reverse hereto. Such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
This [indebtedness] shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
or on behalf of the Trustee under such Indenture.
IN WITNESS WHEREOF, DUSA Pharmaceuticals, Inc. has caused this
instrument to be executed in its corporate name by the facsimile signatures of
its Chairman of the Board, its President or one of its Vice Presidents and its
Secretary and impressed or imprinted with its corporate seal or a facsimile
thereof.
Dated:
DUSA Pharmaceuticals, Inc.
By:
Title:
(SEAL)
ATTEST:
Title:
Section 2.3. Form of Reverse Side of Security.
DUSA Pharmaceuticals, Inc.
[ ]% [Title of Security ]
This [indebtedness] is one of a duly authorized issue of debentures,
notes or other evidences of indebtedness of the Company (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of September 26, 1997 (herein called
the "Indenture"), duly executed and delivered by the Company to American Stock
Transfer & Trust Co., 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 Holders of the Securities.
The
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Securities may be issued in one or more series, which different series may be
issued in various aggregate principal amounts, may as between different series
and within a given series mature at different times, may bear interest (if any)
at different rates, may be subject to different redemption provisions (if any),
may be subject to different sinking, purchase or analogous funds (if any), and
may otherwise vary as in the Indenture provided. This [indebtedness] is one of a
series designated as the [ ]% of (title of the series of the Security) the
Company, limited in aggregate principal amount to [ ].
Interest on the [indebtedness] shall be calculated on the basis of a
360-day year consisting of twelve 30-day months.
[Description of provisions of the series relating to redemption,
sinking fund, subordination or other permitted terms, if any.]
If an Event of Default, as defined in the Indenture, with respect to
the [indebtedness] of this series shall occur and be continuing, the principal
of the [indebtedness] of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than 80% in principal amount of the
Securities at the time Outstanding (as that term is defined in the Indenture) of
each series to be affected. The Indenture also contains provisions permitting
the Holders of 80% in aggregate principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this [indebtedness] shall be
conclusive and binding upon such Holder and upon all future Holders of this
[indebtedness] and of any Security issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of such
consent or waiver is made upon this [indebtedness].
No reference herein to the Indenture and no provision of this
[indebtedness] or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this [indebtedness] at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this [indebtedness] is registrable in the Security
Register upon surrender of this [indebtedness] for registration of transfer at
the office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this [indebtedness] are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company, duly executed by the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new [indebtedness] of
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<PAGE> 14
this series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The [indebtedness] are issuable only in registered form without coupons
in denominations of [$10] and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the
[indebtedness] are exchangeable for a like aggregate principal amount of
[indebtedness] of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this [indebtedness] for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this [indebtedness] is registered as the
owner hereof for all purposes, whether or not this [indebtedness] be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
All capitalized terms used in this [indebtedness] and not defined
herein shall have the meanings assigned to them in the Indenture.
This [indebtedness] shall be deemed to be a contract made under the laws of the
State of New Jersey, and for all purposes shall be construed in accordance with
and governed by the laws of that state.
Section 2.4. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated pursuant to the
within-mentioned Indenture.
, as Trustee , as Trustee
OR
By By
Authorized Signatory As Authenticating Agent
By
Authorized Officer
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ARTICLE THREE
THE SECURITIES
Section 3.1. Amount Unlimited; Issuable in Series.
(a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
(b) The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the initial issuance of Securities of any series:
(i) the title of the Securities of the series (which
shall distinguish the Securities of the series from all other
Securities);
(ii) any limit upon the aggregate principal amount of
the Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6, or 11.7);
(iii) the date or dates on which the principal of the
Securities of the series is payable;
(iv) the rate or rates at which the Securities of the
series shall bear interest, if any, the date or dates from
which such interest shall accrue and the dates on which such
interest shall be payable and the record date for the interest
payable on any such interest date;
(v) the place or places, if any, in addition to New
York, New York where the principal of (and premium, if any)
and interest on Securities of the series shall be payable;
(vi) the period or periods within which, the price or
prices at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part,
at the option of the Company;
(vii) the obligation, if any, of the Company to
redeem purchase or repay Securities of the series pursuant to
any sinking fund or analogous provisions or at the option of a
Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon
which Securities of the series shall be redeemed or purchased
or repaid, in whole or in part, pursuant to such obligation;
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<PAGE> 16
(viii) if other than the principal amount thereof,
the portion of the principal amount of Securities of the
series which shall be payable upon declaration of acceleration
of the maturity thereof pursuant to Section 5.2;
(ix) the Indebtedness of the Company, if any, which
shall constitute Senior Indebtedness with respect to the
Securities of the series and the terms and conditions of that
subordination; and
(x) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture).
(c) All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to such Board Resolution in any such indenture supplemental hereto.
(d) At the option of the Company, interest on the Securities
of any series that bears interest may be paid by mailing a check to the address
of the Person entitled thereto as such address shall appear in the Security
Register.
(e) If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
Section 3.2. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 3.1. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $10 and any integral multiple thereof.
Section 3.3. Execution, Authentication, Delivery and Dating.
(a) The Securities shall be executed on behalf of the Company
by its Chairman of the Board, its President or one of its Vice Presidents, under
its corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
(b) Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
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<PAGE> 17
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order and subject to the provisions
hereof shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an opinion of
Counsel stating:
(i) if the form of such Securities has been
established by or pursuant to Board Resolution as permitted by
Section 2.1, that such form has been established in conformity
with the provisions of this Indenture;
(ii) if the terms of such Securities have been
established by or pursuant to Board Resolution as permitted by
Section 3.1, that such terms have been established in
conformity with the provisions of this Indenture; and
(iii) that such Securities, when authenticated and
delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization and other laws of general
applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles.
(d) The Trustee shall not be required to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.
(e) Each Security shall be dated the date of its
authentication.
(f) No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture.
Section 3.4. Temporary Securities.
(a) Pending the preparation of definitive Securities of any
series, the Company may
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execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
(b) If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company designated by the Company
for that series, without charge to the Holder. Upon surrender for cancellations
of any one or more temporary Securities of any series the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations. Until so exchanged the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
Section 3.5. Registration, Registration of Transfer and
Exchange.
(a) The Company shall cause to be kept at an office or agency
of the Company a register ( the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and transfers of Securities. The Trustee is hereby
initially appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
(b) Upon surrender for registration of transfer of any
Security of any series at the office or agency designated by the Company for
that series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of a like
aggregate principal amount.
(c) At the option of the Holder, Securities of any series may
be exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
(d) All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
(e) Every Security presented or surrendered for registration
of transfer or exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and any registrar with respect to
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<PAGE> 19
such series of Securities duly executed, by the Holder thereof or his attorney
duly authorized in writing.
(f) No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.4, 9.6, or 11.7 not involving any transfer.
(g) The Company shall not be required:
(i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a
notice of redemption of Securities of that series selected for
redemption under Section 11.3 and ending at the close of
business on the day of such mailing, or
(ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed
in part.
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
(a) If any mutilated Security is surrendered to the Company or
to the Trustee, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series and of like tenor
and principal amount and bearing a number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by either of
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request, the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
(c) In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security.
(d) Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
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(e) Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
(f) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.7. Payment of Interest; Interest Rights Preserved.
(a) Interest on any Security which is payable, and is
punctually paid or duly provided for, on any interest payment date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the record date (as
hereinafter defined) for such interest payment notwithstanding the cancellation
of such Security upon the registration of transfer or exchange subsequent to the
record date and prior to such interest payment date; provided, however, that if
and to the extent that the Company shall default in the payment of the interest
due on such interest payment date, such defaulted interest shall be paid to the
Persons in whose names outstanding Securities are registered at the close of
business on a subsequent record date established by notice given by mail by and
on behalf of the Company to the Holders of Securities not less than 15 days
preceding such subsequent record date, such record date to be not less than 10
days preceding the date of payment of such defaulted interest. The term "record
date" as used in this Section 3.7 with respect to any regular interest payment
date shall mean such day preceding such interest payment date as may have been
established as the record date with respect to an interest payment date for
Securities of such series in a Board Resolution in accordance with Section 3.1
hereof. The Company may also make payment of any defaulted interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this sentence, such manner of payment shall be
deemed practicable by the Trustee.
(b) Subject to subsection (a) of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
Section 3.8. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any
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agent of the Company or the Trustee shall be affected by notice to the contrary.
Section 3.9. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it; provided, however, that if surrendered to
any Authenticating Agent, such Securities shall be promptly cancelled by such
Authenticating Agent and forwarded to the Trustee. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities held by the Trustee shall be
disposed of as directed by a Company Order; provided, that the Trustee shall not
be required to dispose of Securities in a manner deemed impracticable by the
Trustee.
Section 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of 12 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture.
(a) This Indenture shall, upon Company Request, cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:
(i) either
(A) all Securities theretofore authenticated
and delivered (other than (1) Securities which have
been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.6 and (2)
Securities for whose payment money has theretofore
been deposited in trust and thereafter discharged
from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or
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(B) all such Securities not theretofore
delivered to the Trustee for cancellation
(1) have become due an payable, or
(2) will become due and payable at
their stated maturity within one year, or
(3) are to be called for redemption
within one year under arrangements
satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in
the name, and at the expense, of the
Company, and the Company, in the case of
(1), (2) or (3) above, has deposited or
caused to be deposited with the Trustee as
trust funds in trust for the purpose an
amount sufficient to pay and discharge the
entire indebtedness on such Securities not
theretofore delivered to the Trustee for
cancellation, for principal (and premium, if
any) and interest to the date of such
deposit (in the case of Securities which
have become due and payable) or to the
stated maturity or Redemption Date, as the
case may be;
(ii) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been
complied with.
(b) In the event there are Securities of two or more series
hereunder, the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Securities of all series as to which it is Trustee and if the other
conditions thereto are met. In the event there are two or more Trustees
hereunder, then the effectiveness of any such instrument shall be conditioned
upon the receipt of such instruments from all Trustees hereunder.
(c) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.7, the
obligations of the Trustee to any Authenticating Agent under Section 6.14 and,
if money shall have been deposited with the Trustee pursuant to Subclause (B) of
Clause (i) of this Section, the obligations of the Trustee under Section 4.2 and
the last paragraph of Section 10.3, shall survive.
Section 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the
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Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
REMEDIES
Section 5.1. Events of Default.
"Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (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):
(a) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of such default
for a period of 5 days; or
(b) default in the payment of the principal of (or premium, if
any, on) any Security of that series when due and payable as therein or herein
provided whether at its maturity or upon acceleration, redemption or otherwise;
or
(c) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series; or
(d) default in the performance, or breach, of any covenant or
warranty of the Company contained in this Indenture in the terms of the
Securities of that series (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically dealt with
or which has expressly been included in this Indenture solely for the benefit of
series of Securities other than that series), and continuance of such default or
breach for a period of 10 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 10% in principal amount of the outstanding Securities
of that series a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder;
(e) a default under any mortgage, indenture, or instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Company (including a default with
respect to Securities of any series other than that series) whether such
indebtedness now exists or shall hereafter be created, which default shall have
resulted in such indebtedness, in an aggregate principal amount exceeding
$1,000,000, becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without
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such indebtedness having been discharged, or such acceleration having been
rescinded or annulled, or there having been deposited in trust a sum of money
sufficient to discharge in full such indebtedness, within a period of 10 days
after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 10% in principal amount of the outstanding Securities of that series a
written notice specifying such default and requiring the Company to cause such
indebtedness to be discharged, to cause there to be deposited in trust a sum
sufficient to discharge in full such indebtedness or to cause such acceleration
to be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; provided, however, that, subject to the provisions of
Sections 6.1 and 6.2, the Trustee shall not be deemed to have knowledge of such
default unless the Trustee shall have received written notice thereof from the
Company, from any Holder, from the holder of any such indebtedness or from the
trustee under any such mortgage, indenture or other instrument; or
(f) the entry by a court having jurisdiction in the premises
of
(i) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect
or
(ii) a decree or order appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of
its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in
effect for a period of 30 consecutive days; or
(g) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by
the Company to the entry of a decree or order for relief in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect or to the
commencement of any bankruptcy or insolvency case or proceeding, or the filing
by the Company of a petition or answer or consent seeking reorganization or
relief under any applicable Federal or State law now or hereafter in effect, or
the consent by the Company to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial part of
the property of the Company, or the making by the Company of an assignment for
the benefit of creditors, or the Company shall fail generally to pay its debts
as they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(h) any other Event of Default provided with respect to
Securities of that series.
(i) Subject to Sections 6.1 and 6.2, and except for
Events of Default described in Sections 5.1(a), (b) and (c),
the Trustee shall not be deemed to have knowledge of
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an Event of Default unless a Responsible Officer receives
written notice thereof.
Section 5.2. Acceleration of Maturity; Rescission and
Annulment.
(a) If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holder of not less than 10% in principal amount of the
Outstanding Securities of that series may declare the principal amount and the
interest accrued thereon of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal amount (or
specified amount) and interest accrued thereon shall become immediately due and
payable.
(b) At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of 80% in principal amount of
the Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the
Trustee a sum sufficient to pay:
(A) all overdue interest on all Securities
of that series,
(B) the principal of (the premium, if any,
on), any Securities of that series which have become
due otherwise than by such declaration of
acceleration and interest thereon at the rate or
rates prescribed therefor in such Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue interest at
the rate or rates prescribed therefor in such
Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses
and disbursements and advances of the Trustee, its
agents and counsel; and
(ii) all Events of Default with respect to Securities
of that series, other than the non-payment of the principal of
Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as
provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
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Section 5.3. Collection of Indebtedness and Suit for
Enforcement by Trustee.
(a) The Company covenants that if:
(i) default is made in the payment of any interest on
any Security when such interest becomes due and payable and
such default continues for a period of 5 days, or
(ii) default is made in the payment of the principal
of (or premium, if any, on) any Security at the maturity, redemption,
acceleration or otherwise thereof or in the deposit of any sinking fund
payment when and as due by the terms of any Security,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue interest, at the
rate or rates prescribed therefor in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
(b) If the Company fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities,
wherever situated.
(c) If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may at its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.4. Trustee May File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Company or any other obligor
upon the Securities or the property of the Company or of such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
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(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid
in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding;
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims; and
(iii) to distribute all amounts received with respect
to the claims of the Holders and the Trustee on their behalf,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.7.
(b) Subject to the provisions of Article Eight of this
Indenture, nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 5.5. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such 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 and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
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FIRST: To the payment of all amounts due the
Trustee under Section 6.7;
SECOND: To the Holders of Senior Indebtedness as
provided in Article Thirteen.
THIRD: To the payment of the amounts then due and
unpaid for principal or (and premium, if
any) and interest on the Securities in
respect of which or for the benefit of which
such money has been collected, ratably,
without preference or priority of any kind,
according to the amounts due and payable on
such Securities for principal (and premium,
if any) and interest, respectively.
Section 5.7. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series;
(b) the Holders of not less than 10% in principal amount of
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Events of Default in its own
name as Trustee hereunder:
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(d) the Trustee for 10 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 10-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of Holders of Securities of
such series 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 of Holders of Securities of such series or Holders of any
other series, or to obtain or to seek to obtain priority or preference over any
other of Holders of Securities of such series or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Holders of Securities of such series.
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Section 5.8 Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 3.7) interest on such Security on the due dates expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 5.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 3.6, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
Section 5.12. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
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respect to the Securities of such series, provided, that:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture;
(b) the Trustee shall have determined that the action so
directed would not be unjustly prejudicial to the Holders of any Securities of
any series with respect to which the Trustee is the Trustee not taking part in
such direction; and
(c) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults.
(a) The Holders of not less than 80% in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:
(i) in the payment of the principal of (or premium,
if any) or interest on any Security of such series, or
(ii) in respect of a covenant or provision hereof
which under Article Ten cannot be modified or amended without
the consent of the Holder of each Outstanding Security of such
series affected.
(b) Upon any such waiver, such default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security 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, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest on any Security on
or after the due dates expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
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Section 5.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the exercise of any power
herein granted to the Trustee, but will suffer and permit the exercise of every
such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default with
respect to Securities of any series,
(i) the Trustee undertakes to perform, with respect
to Securities of such series, such duties and only such duties
as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may, with respect to Securities of such series,
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
confirming 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) In case of Event of Default with respect to Securities of
any series has occurred and is continuing, the Trustee shall exercise, with
respect to Securities of such series, 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.
(c) 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:
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(i) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any series
pursuant to the provisions of Section 5.12 relating to the
time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with
respect to the Securities of such series; and
(iv) no provisions of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
Section 6.2 Notice of Defaults.
Within 60 days after the occurrence of any default hereunder
with respect to the Securities of any series, the Trustee shall transmit by
first-class mail to all Holders of Securities of such series, as their names and
addresses appear in the Security Register, notice of such default hereunder
known to a Responsible Officer of the Trustee, unless such default shall have
been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal of (of premium, if any) or interest on any
Security of such series or in the payment of any sinking fund installment with
respect to Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders of Securities of such series; and provided, further,
that in the case of any default of the character specified in Section 5.1 (d)
with respect to the Securities of such series, no such notice to Holders shall
be given, until at least 30 days after the occurrence thereof. For the purpose
of this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to
Securities of such series.
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6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith, believed by it to be authorized or
within the discretion or rights and powers conferred
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upon it by this Indenture.
Section 6.4 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificate of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. The Trustee
or any Authenticating Agent shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof, for the use of application
of any moneys paid over by the Trustee in accordance with any provisions of this
Indenture for the use or application of any moneys received by any Paying Agent
other than the Trustee.
Section 6.5 May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent or any
other agent of the Company, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to Sections 6.8 and 6.13, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent or such agent.
Section 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
Section 6.7. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
(c) to indemnify the Trustee for, and to hold it harmless
against any loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of
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defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder; and
(d) that the obligations of the Company under this Section 6.7
to compensate the Trustee and to pay or reimburse the Trustee for such
expenditures, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by a lien
prior to that of the Securities 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 Securities.
(e) When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 5.1(f) or (g) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any bankruptcy law.
Section 6.8. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting
interest, as defined in this Section, with respect to the Securities or any
series, it shall within 90 days after ascertaining that it has such conflicting
interest, either eliminate such conflicting interest or resign with respect to
the Securities of that series in the manner and with the effect hereinafter
specified in this Article.
(b) In the event that the Trustee shall fail to comply with
the provisions of Subsection (a) of this Section with respect to the Securities
of any series, the Trustee shall, within 10 days after the expiration of such
90-day period, transmit by mail to all Holders of Securities of that series, as
their names and addresses appear in the Security Register, notice of such
failure.
(c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest with respect to the Securities of any
series if:
(i) the Trustee is trustee under this Indenture with
respect to the Outstanding Securities of any series other than
that series or is trustee under another indenture under which
any other securities, or certificates of interest or
participation in any other securities, of the Company are
outstanding, unless such other indenture is a collateral trust
indenture under which the only collateral consists of
Securities issued under this Indenture; provided, that there
shall be excluded from the operation of this paragraph this
Indenture with respect to the Securities of any series other
than that series or other indenture or indentures under which
other securities, or certificates of interest or participation
in other securities, of the Company are outstanding if:
(A) this Indenture and such other indenture
or indentures are wholly unsecured and such other
indenture or indentures are hereafter qualified under
the Trust Indenture Act, unless the Commission shall
have found and declared by order pursuant to Section
305(b) or Section 307(c) of the Trust Indenture Act
that differences exist between the provisions of this
Indenture with
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respect to Securities of that series and one or more
other series or the provisions of such other
indenture or indentures which are so likely to
involve a material conflict of interest as to make it
necessary in the public interest or for the
protection of investors to disqualify the Trustee
from acting as such under this Indenture with respect
to the Securities of that series and such other
series or under such other indenture or indentures,
or
(B) the Company shall have sustained the
burden of proving, on application to the Commission
and after opportunity for hearing thereon, that
trusteeship under this Indenture with respect to the
Securities of that series and such other series or
such other indenture or indentures is not so likely
to involve a material conflict of interest as to make
it necessary in the public interest or for the
protection of investors to disqualify the Trustee
from acting as such under this Indenture with respect
to the Securities of that series and such other
series or under such other indenture or indentures;
(ii) the Trustee or any of its directors or executive
officers is an obligor upon the Securities or an underwriter
for the Company;
(iii) the Trustee directly or indirectly controls or
is directly or indirectly controlled by or is under direct or
indirect common control with the Company or an underwriter for
the Company;
(iv) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee
or representative of the Company, or of an underwriter (other
than the Trustee itself) for the Company who is currently
engaged in the business of underwriting, except that:
(A) one individual may be a director or an
executive officer, or both, of the Company but may
not be at the same time an executive officer of both
the Trustee and the Company;
(B) if and so long as the number of
directors of the Trustee in office is more than nine,
one additional individual may be a director or an
executive officer, or both, of the Trustee and a
director of the Company; and
(C) the Trustee may be designated by the
Company or by any underwriter for the Company to act
in the capacity of transfer agent, registrar,
custodian, paying agent, fiscal agent, escrow agent
or depositary or in any other similar capacity, or,
subject to the provisions of paragraph (i) of this
Subsection, to act as trustee, whether under an
indenture or otherwise;
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(v) 10% or more of the voting securities of the
Trustee is beneficially owned either by the Company or by any
director, partner or executive officer thereof, or 20% or more
of such voting securities is beneficially owned, collectively,
by any two or more of such persons; or 10% or more of the
voting securities of the Trustee is beneficially owned either
by an underwriter for the Company or by any director, partner
or executive officer thereof, or is beneficially owned,
collectively, by any two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation which is in default
(as hereinafter in this Subsection defined),
(A) 5% or more of the voting securities, or
10% or more of any other class of security, of the
Company not including the Securities issued under
this indenture and securities issued under any other
indenture under which the Trustee is also trustee, or
(B) 10% or more of any class of security of
an underwriter for the Company;
(vii) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is in
default (as hereinafter in this Subsection defined), 5% or
more of the voting securities of any person who, to the
knowledge of the Trustee, owns 10% or more of the voting
securities of, or controls directly or indirectly or is under
direct or indirect common control with, the Company;
(viii) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is in
default (as hereinafter in this Subsection defined), 10% or
more of any class of security of any person who, to the
knowledge of the Trustee, owns 50% or more of the voting
securities of the Company; or
(ix) the Trustee owns, on May 15 in any calendar
year, in the capacity of executor, administrator, testamentary
or inter vivos trustee, guardian, committee or conservator, or
in any other similar capacity, an aggregate of 25% or more of
the voting securities, or of any class of security, of any
person, the beneficial ownership of a specified percentage of
which would have constituted a conflicting interest under
Paragraph (vi), (vii) or (viii) of this Subsection. As to any
such securities of which the Trustee acquired ownership
through becoming executor, administrator or testamentary
trustee of an estate which included them, the provision of the
preceding sentence shall not apply for a period of two years
from the date of such acquisition to the extent that such
securities included in such estate do not exceed 25% of such
voting securities or 25% or any such class of security.
Promptly after May 15 in each calendar year, the Trustee shall
make a check of its holdings of such securities in any of the
above-mentioned capacities as of such May 15. If the Company
fails to make
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payment in full of the principal or (or premium, if any) or
interest on any of the Securities when and as the same becomes
due and payable, and such failure continues for 30 days
thereafter, the Trustee shall make a prompt check of its
holdings of such securities in any of the above-mentioned
capacities as of the date of the expiration of such 30-day
period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by
the Trustee, with sole or joint control over such securities
vested in it, shall, but only so long as such failure shall
continue, be considered as though beneficially owned by the
Trustee for the purposes of Paragraphs (vi), (vii) and (viii)
of this subsection.
The specification of percentages in Paragraphs (v) to (ix),
inclusive, of this subsection shall not be construed as
indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient to
constitute direct or indirect control for the purposes of this
paragraph (iii) or (vii) of this subsection.
For the purposes of Paragraphs (vi), (vii), (viii) and (ix) of
this subsection only, (x) the terms "security" and
"securities" shall include only such securities as are
generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence
an obligation to repay moneys lent to a person by one or more
banks, trust companies or banking firms, or any certificate of
interest or participation in any such note or evidence of
indebtedness; (y) an obligation shall be deemed to be "in
default" when a default payment of principal shall have
continued for 30 days or more and shall not have been cured;
and (z) the Trustee shall not be deemed to be the owner or
holder of (m) any security which it holds as collateral
security, as trustee or otherwise, for an obligation which is
not in default as defined in clause (y) above, or (n) any
security which it holds as collateral security under this
Indenture, irrespective of any default hereunder, or (c) any
security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar
representative capacity.
(d) For the purposes of this Section:
(i) The Term "underwriter", when used with reference
to the Company, means every person who, within three years
prior to the time as of which the determination is made, has
purchased from the Company with a view to, or has offered or
sold for the Company in connection with, the distribution of
any security of the Company outstanding at such time, or has
participated or has had a direct or indirect participation in
any such undertaking, or has participated or has had a
participation of any such undertaking, but such term shall not
include a person whose interest was limited to a commission
from an underwriter or dealer not in excess of the usual and
customary distributors' or sellers' commission.
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(ii) The term "director' means any director of a
corporation or any individual performing similar functions
with respect to any organization, whether incorporated or
unincorporated.
(iii) The term "person" means an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, an unincorporated organization or a
government or political subdivision thereof. As used in this
paragraph, the term "trust' shall include only a trust where
the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(iv) The term "voting security" means any security
presently entitling the owner or holding thereof to vote in
the direction or management of the affairs of a person, or any
security issued under or pursuant to any trust, agreement or
arrangement whereby a trustee or trustees or agent or agents
for the owner or holder of such security are presently
entitled to vote in the direction or management of the affairs
of a person.
(v) the term "Company" means any obligor upon the
Securities.
(vi) The term "executive officer" means the
president, every vice president, every trust officer, the
cashier, the secretary and the treasurer of a corporation, and
any individual customarily performing similar functions with
respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the
board of directors.
(e) The percentages of voting securities and other securities specified
in this section shall be calculated in accordance with the following provisions:
(i) a specified percentage of voting securities of
the Trustee, the Company or any other person referred to in
this section (each of whom is referred to as a "person" in
this paragraph) means such amount of the outstanding voting
securities of such person as entitles the holder or holders
thereof to cast such specified percentage of the aggregate
votes which the holders of all the outstanding voting
securities of such person are entitled to cast in the
direction or management of the affairs of such person.
(ii) A specified percentage of a class of securities
of a person means such percentage of the aggregate amount of
securities of the class outstanding.
(iii) The term "amount', when used in regard to
securities, means the principal amount if relating to
evidences of indebtedness, the number of shares if relating to
capital shares and the number of units if relating to any
other kind of security.
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(iv) The term "outstanding" means those securities
issued and not held by or for the account of the issuer. The
following securities shall not be deemed outstanding within
the meaning of this definition:
(A) securities of an issuer held in a
sinking fund relating to securities of the issuer of
the same class;
(B) securities of an issuer held in a
sinking fund relating to another class of securities
of the issuer, if the obligation evidenced by such
other class of securities is not in default as to
principal or interest or otherwise;
(C) securities pledged by the issuer thereof
as security for an obligation of the issuer not in
default as to principal or interest or otherwise; and
(D) securities held in escrow if placed in
escrow by the issuer thereof;
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled to exercise
the voting rights thereof.
(f) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in the
case of secured evidences of indebtedness, all of which are issued under a
single indenture, differences in the interest rates or maturity dates of various
series thereof shall not be deemed sufficient to constitute such series
different classes and provided, further, that, in the case of unsecured
evidences of indebtedness, differences in the interest rates or maturity dates
thereof shall not be deemed sufficient to constitute them securities of
different classes, whether or not they are issued under a single indenture.
Section 6.9 Corporate Trustee Required; Eligibility
There shall at all times be a Trustee hereunder with respect
to each series of Securities which shall be a corporation organized and doing
business under the laws of the United States of America, any state thereof or
the District of Columbia, authorized under such laws to exercise corporate trust
powers, having (together with any Person directly or indirectly controlling the
Trustee) a combined capital and surplus of at least $10,000,000 subject to
supervision or examination by federal or state authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this section, the combined capital, and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
article.
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Section 6.10. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section
6.8(a) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security of the
series as to which the Trustee has a conflicting interest for
at least six months, or
(ii) the Trustee shall cease to be eligible under
Section 6.9 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(iii) 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, (x) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (y) subject to Section 5.14, any
Holder who has been bona fide Holder of a Security for at least six months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities of one or more series, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular
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series) and shall comply with the applicable requirements of Section 6.11. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders of Securities of such series and accepted appointment in the manner
required by Section 6.11, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each
removal of Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Securities of such series as their names and addresses appear in
the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
Section 6.11 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which
(i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest
in, each successor Trustee all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such
successor Trustee relates,
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(ii) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which
the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and
(iii) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee and that no Trustee shall be responsible for any act
or failure to act on the part of any other trustee hereunder;
and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein, such
retiring Trustee shall with respect to the Securities of that
or those series to which the appointment of such successor
Trustee relates have no further responsibility for the
exercise of rights and powers or for the performance of the
duties and obligations vested in the trustee under this
Indenture, and each such successor Trustee, without any
further act, deed or conveyance, shall become vested with all
the rights, powers, trust and duties of the retiring Trustee
with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates; but,
on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to
such successor Trustee, to the extent contemplated by such
supplemental indenture, the property and money held by such
retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in Paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this article.
Section 6.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall
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have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion, or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities.
Section 6.13. Preferential Collection of Claims Against
Company.
(a) Subject to Subsection (b) of this section, if the Trustee
shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of the Company within four months prior to a default, as defined in
Subsection (c) of this section, or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set apart and hold in
special account for the benefit of the Trustee individually, the holders of the
Securities and the holders of other indenture securities, as defined in
Subsection (c) of this section.
(i) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in
respect of principal, premium, if any, or interest, effected
after the beginning of such four months' period and valid as
against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any
property described in Paragraph (ii) of this subsection, or
from the exercise of any right of set-off which the Trustee
could have exercised if a petition in bankruptcy had been
filed by or against the Company upon the date of such default;
and
(ii) all property received by the Trustee in respect
of any claims as such creditor, either as security therefor,
or in satisfaction or composition thereof, or otherwise, after
the beginning of such four months' period, or an amount equal
to the proceeds of any such property, if any, of the Company
and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee:
(A) to retain for its own account
(1) payments made on account of any
such claim by any Person (other than the
Company) who is liable thereon, and
(2) the proceeds of the bona fide
sale of any such claim by the Trustee to a
third Person, and
(3) distributions made in cash,
securities or other property in respect of
claims filed against the Company in
bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal
Bankruptcy Act or applicable state law;
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(B) to realize, for its own account upon any
property held by it as security for any such claim,
if such property was so held prior to the beginning
of such four months' period;
(C) to realize, for its own account, but
only to the extent of the claim hereinafter
mentioned, upon any property held by it as security
for any such claim, if such claim was created after
the beginning of such four months' period and such
property was received as security therefor
simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at
the time such property was so received the Trustee
had no reasonable cause to believe that a default, as
defined in Subsection (c) of this section wold occur
within four months; or
(D) to receive payment on any claim referred
to in Paragraph (B) or (C), against the release of
any property held as security for such claim as
provided in Paragraph (B) or (C), as the case may be,
to the extent of the fair value of such property.
For purposes of Paragraphs (B), (C) and (D), property
substituted after the beginning of such four months'
period for property held as security at the time of
such substitution shall, to the extent of the fair
value of the property released, have the same status
as the property released, and, to the extent that any
claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for
the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim
shall have the same status as such pre-existing
claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Holders and the Holders of other indenture
securities in such manner that the Trustee, the Holders and the Holders of other
indenture securities realize, as a result of payment from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable state law, the same percentage of their respective
claims, calculated before crediting to the claim of the Trustee anything on
account of the receipt by it from the Company of the funds and property in such
special account and before crediting to the respective claims of the Trustee and
the Holders and the holders of other indenture securities dividends on claims
filed against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable state law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividend" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable state law, whether such
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distribution is made in cash, securities or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceedings for
reorganization is pending shall have jurisdiction (x) to apportion among the
Trustee, the Holders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and proceeds thereof, or (y) in lieu of such apportionment,
in whole or in part, to give to other provisions of this paragraph due
consideration in determining the fairness of the distributions to be made to the
Trustee and the Holders and the holders of other indenture securities with
respect to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured or unsecured portions of
such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the
beginning of such four months' period shall be subject to the provisions of this
subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such four months'
period, it shall be subject to the provisions of this subsection if and only if
the following conditions exist:
(iii) the receipt of property or reduction of claim,
which would have given rise to the obligation to account, if
such Trustee had continued as Trustee, occurred after the
beginning of such four months' period; and
(iv) such receipt of property or reduction of claim
occurred within four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection
(a) of this section a creditor relationship arising from:
(i) the ownership or acquisition of securities issued
under any indenture, or any security or securities having a
maturity of one year or more at the time of acquisition by the
Trustee;
(ii) advances authorized by a receivership or
bankruptcy court of competent jurisdiction or by this
Indenture, for the purpose of preserving any property which
shall at any time be subject to the lien of this Indenture or
of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances
surrounding the making thereof is given to the Holders at the
time and in the manner provided in this Indenture;
(iii) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture,
transfer agent, registrar, custodian, paying agent, fiscal
agent or depositary, or other similar capacity;
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(iv) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a
result of goods or securities sold in a cash transaction, as
defined in Subsection (c) of this section;
(v) the ownership of stock or of other securities of
a corporation organized under the provisions of Section 25(a)
of the Federal Reserve Act, as amended, which is directly or
indirectly a creditor of the Company; and
(vi) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange, acceptances or
obligations which fall within the classification of
self-liquidating paper, as defined in Subsection (c) in this
section.
(c) For the purposes of this section only:
(i) the term "default" means any failure to make
payment in full of the principal of or interest on any of the
Securities or upon the other indenture securities when and as
such principal or interest becomes due and payable;
(ii) the term "other indenture securities" means
securities upon which the Company is an obligor outstanding
under any other indenture;
(A) under which indenture and as to which
securities the Trustee is also trustee,
(B) which contains provisions substantially
similar to the provisions of this section, and
(C) under which a default exists at the time
of the apportionment of the funds and property held
in such account;
(iii) the term "cash transaction" means any
transaction in which full payment for goods or securities sold
is made within seven days after delivery of the goods or
securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand;
(iv) the term "self-liquidating paper" means any
draft bill of exchange, acceptance or obligation which is
made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship
with the
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Company arising form the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or
obligation;
(v) the term "Company" means any obligor upon the
Securities; and
(vi) the term "Federal Bankruptcy Act" means the
Bankruptcy Act or Title 11 of the United States Code.
Section 6.14. Appointment of Authenticating Agent.
(a) At any time when any of the Securities remain Outstanding,
the Trustee may appoint an Authenticating Agent or Agents with respect to one or
more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate securities of such series issued upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
3.6, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Whenever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery by an Authenticating Agent and a certificate of
authentication executed by an Authenticating Agent. Each Authenticating Agent
shall be acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, authorized under such laws to act as
authenticating Agent, having a combined capital and surplus of not less than
$10,000,000 and subject to supervision or examination by federal or state
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this section, the combined capital
and surplus of such Authenticating Agent 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 an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this section.
(b) Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
(c) An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any
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time such Authenticating Agent shall cease to be eligible in accordance with the
provision of this section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this section.
(d) The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under this section,
and the Trustee shall be entitled to be reimbursed for such payments.
(e) The provisions of Sections 3.8, 6.4 and 6.5 shall be
applicable to each Authenticating Agent.
(f) Pursuant to each appointment made under this section, the
Securities of each series covered by such appointment may have endorsed thereon,
in addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
As Authenticating Agent
By:
Authorized Signatory
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 Company to Furnish Trustee Names and Addresses of
Holders.
(a) The Company will furnish or cause to be furnished to the
Trustee:
(i) semi-annually, not more than 15 days after each
record date with respect to a regular interest payment date
for each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of
the Holders of such series as of such record date; provided;
however, that if Securities of any series shall have more than
two regular interest payment dates in each calendar year or
shall
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not bear interest, then such list with respect to such series
of Securities will be furnished to the Trustee semi-annually
on such dates as may be agreeable to the Trustee; and
(ii) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the Company of
any such request, a list of similar form and content as of a
date not more than 15 days prior to the time such list is
furnished.
(b) Any such list may be dated as of the date not more than 15
days prior to the time such information is furnished or caused to be furnished
and need not include information received after such date; provided, however,
that if the Trustee is the sole registrar with respect to any series of
Securities, no such list need be furnished with respect to such series.
Section 7.2 Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 7.1 and the names
and addresses of Holders received by the Trustee in its capacity as sole
Security Registrar, if so acting. The Trustee may destroy any list furnished to
it as provided in Section 7.1 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Trustee and furnish proof reasonably
satisfactory to the Trustee that each applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants' desire to communicate with other Holders
with respect to their rights under this Indenture or under the Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within five business
days after the receipt of such application, at its election, either:
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with
Section 7.2(a), or
(ii) inform such applicants as to the approximate
number of Holders whose names and addresses appear in the
information preserved at the time by the Trustee in accordance
with Section 7.2(a), and as to the approximate cost of mailing
to such Holders the form of proxy or other communication, if
any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appears in the
information preserved at the time by the Trustee in accordance with Section
7.2(a) a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or
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provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interests of the holders or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If the Commission, after opportunity for hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and renewal of such tender; otherwise the Trustee shall be relieved
of any obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 7.2(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under Section
7.2(b).
Section 7.3. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with
the May 15 next succeeding the Original Issue date of such Securities, the
Trustee shall transmit by mail to all Holders, as their names and addresses
appear in the Security Register, a brief report dated as of such May 15 with
respect to:
(i) its eligibility under Section 6.9 and its
qualifications under Section 6.8, or in lieu thereof, if to
the best of its knowledge it has continued to be eligible and
qualified under said section, a written statement to such
effect;
(ii) the character and amount of any advances (and if
the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee (as such) which remain
unpaid on the date of such report, and for the reimbursement
of which it claims or may claim a lien or charge, prior to
that of the Securities, on the trust estate or on any property
or funds held or collected by it as Trustee, except that the
Trustee shall not be required (but may elect) to report such
advances if such advances so remaining unpaid aggregate not
more than 1/2 of 1% of the principal amount of the Securities
Outstanding on the date of such report;
(iii) the amount, interest rate and maturity date of
all other indebtedness owing by the Company (or by any other
obligor on the Securities) to the Trustee in its individual
capacity, on the date of such report, with a brief description
of any
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property held as collateral security therefor, except an
indebtedness based upon a creditor relationship arising in any
manner described in Section 6.13(b) (ii), (iii), (iv) or (vi);
(iv) the property and funds, if any, physically in
the possession of the Trustee (as such) on the date of such
report;
(v) any additional issue of Securities which the
Trustee has not previously reported; and
(vi) any action taken by the Trustee in the
performance of its duties hereunder which it has not
previously reported and which in its opinion materially
affects the Securities, or the Securities of any series,
except action in respect of a default, notice of which has
been or is to be withheld by the Trustee in accordance with
Section 6.2.
(b) The Trustee shall transmit by mail to all Holders, as
their names and addresses appear in the Security Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Securities, on the trust estate or on property or funds held or collected by
it as Trustee and which it has not previously reported pursuant to this
subsection, except that the Trustee shall not be required (but may elect) to
report such advances if such advances remaining unpaid at any time aggregate 10%
or less of the principal amount of the Securities Outstanding at such time, such
report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
(d) Notwithstanding anything in this Section 7.3 to the
contrary, if no event described in Section 313(a) of the Trust Indenture Act has
occurred within the 12 months preceding May 15 of each year, no report need be
transmitted to Holders.
Section 7.4. Reports by Company.
The Company shall:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time
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by rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); or, if the Company is not
required to file information, documents or reports pursuant to either of said
sections, then it shall file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations;
(c) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to Paragraphs (a) and (b)
of this section as may be required by rules and regulations prescribed from time
to time by the Commission; and
(d) promptly furnish such additional information regarding the
Company as may be reasonably requested and reasonably deemed necessary by the
Trustee in the conduct of its duties hereunder; provided, however, that the
Company shall have no obligation concerning any information constituting
restricted securities information under any law or governmental regulation at
the time of application thereto.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1. Company may Consolidate, Etc., Only on Certain
Terms.
The Company shall not consolidate with or merge with or into
any other corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or with or
into which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation organized and existing under
the laws of the United States of America, any state thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and interest
on all the Securities and the performance and observance of every covenant of
this Indenture on the part of the Company to be performed or observed;
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(b) immediately after giving effect to such transaction no
Event of Default, and no event which, after notice of lapse of time or both,
would become an Event of Default shall have happened or be continuing; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and supplemental indenture comply with
this article and that all conditions precedent herein provided for relating to
such transaction have been complied with.
Section 8.2 Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the
Company with or into any other corporation or any conveyance, transfer or lease
of the properties and assets of the Company substantially as an entirety in
accordance with Section 8.1, the successor corporation formed by such
consolidation or with or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor corporation had been named as the Company
herein, and thereafter, except in the case of a lease, the preecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
Section 8.3 Officers' Certificates and Opinions of Counsel
The Trustee, subject to the provisions of Article Six, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any consolidation, merger, conveyance, transfer or lease and any
assumption complies with the provisions of this Article Eight, that all
conditions precedent herein provided for relating to such transaction have been
complied with and that it is proper for the Trustee under the provisions of this
Article Eight to join in the execution of the supplemental indenture referred to
in Section 8.1.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures without Consent of
Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
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(b) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such series) or
to surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable as to principal, and with or
without interest coupons; or
(e) to change or eliminate any of the provisions of this
Indenture, provided, that, any such change or elimination shall become effective
only when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of
such provision; or
(f) to secure the Securities; or
(g) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 and 3.1; or
(h) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.11(b); or
(i) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Indenture, provided such action shall not adversely affect the interest of
the Holders of Securities of any series in any material respect.
Section 9.2. Supplemental Indentures with Consent of Holders.
(a) With the consent of the Holders of not less than 80% in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
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(i) change the due date of the principal of, or any
installment of principal of or interest on, any Security, or
reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or
reduce the amount of the principal of any Security that would
be due and payable upon a declaration of the maturity thereof
pursuant to Section 5.2, or change the coin or currency in
which any Security or any premium or the interest thereon is
payable, or impair the right to institute suit for the
enforcement of any such payment on or after the due date
thereof (or, in the case of redemption, on or after the
Redemption Date), or
(ii) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and
their consequences) provided for in this Indenture, or
(iii) modify any of the provisions of this section or
Section 5.13, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of
each Outstanding Security affected thereby; provided, however,
that this clause shall not be deemed to require the consent of
any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this section or the
deletion of this provision, in accordance with the
requirements of Sections 6.11(b) and 9.1(h).
(b) A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
(c) It shall not be necessary for any Act of Holders under
this section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 9.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 6.1) shall be fully protected in relying
upon, an Opinion of Counsel and an Officers' Certificate stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent therewith, and that it will be valid and
binding upon the Company in accordance with its terms. The Trustee is hereby
authorized to join with the Company in the execution of any supplemental
indenture permitted by this Article and is authorized or permitted by the terms
of this Indenture to make any
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further appropriate agreements and stipulations which may be therein contained,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects its own rights, duties or immunities under this
Indenture or otherwise.
Section 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this article
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.6. Reference in Securities to Supplemental
Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and delivered by the Company to the
Trustee and thereafter upon surrender by the Holders of Outstanding Securities,
the same shall be authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series, but any such exchange shall not be
necessary to make such modification effective as to Outstanding Securities.
ARTICLE TEN
COVENANTS
Section 10.1. Payment of principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of that series in accordance
with the terms of the Securities and this Indenture.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The
City of New York for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of
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transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served.
Unless otherwise designated by the Company in a written notice to the Trustee,
such office or agency for all purposes shall be the Corporate Trust Office of
the Trustee. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. 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 of the Trustee.
Section 10.3. Money for Securities Payments to Be Held in
Trust.
(a) The Company will, prior to each due date of the principal
of (and premium, if any) or interest on any Securities of that series, deposit
with a Paying Agent a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Paying Agent will promptly notify the Trustee of the
Company's action or failure so to act.
(b) The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this section, that such Paying Agent will:
(i) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Securities
of that series in trust for such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(ii) give the Trustee notice within two Business Days
of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment of
principal of (and premium, if any) or interest on the
Securities of that series; and
(iii) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent.
(c) The Company may, at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, or by
Company Order direct any Paying Agent to pay, to the Trustee all sums held by
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sum were held by the Paying Agent; and, upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
(d) Any money deposited with the Trustee or any Paying Agent
in trust for the
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payment of the principal of (and premium, if any) or interest on any Security of
any series and remaining unclaimed for three years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request, and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repaying may, at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in Toronto, Ontario
and the borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
(e) Neither the Company nor any Affiliate of the Company shall
act as Paying Agent under this Indenture.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 11.1. Applicability of Article.
Securities of any series which are redeemable before their
stated maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 3.1 for Securities of any
series) in accordance with this article.
Section 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 11.3. Selection by Trustee of Securities to be
Redeemed.
(a) If less than all the Securities of any series are to be
redeemed, the Company will notify the Trustee not less than 60 days prior to the
date fixed for redemption as to the aggregate principal amount of Securities to
be redeemed, and thereupon, the particular Securities to be redeemed shall be
selected not less than 45 days prior to the Redemption Date by the Trustee, from
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the Outstanding Securities of such series not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denominations for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series or of a
denomination larger than the minimum authorized denomination for Securities of
that series.
(b) The Trustee shall promptly notify the Company in writing
of the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
(c) For the purposes of any such selection, the Company will,
upon request of the Trustee, close for a period of 15 days preceding the mailing
of any notice of redemption the Security Register of the Company with respect to
such series of Securities.
(d) For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
Section 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register. The notice provided in the manner herein
provided shall be conclusively presumed to have been duly given whether or not
the Holders receive such notice. In any case, failure to give such notice to the
Holder of any Security designated for redemption as a whole or in part shall not
affect the validity of the proceedings of the redemption of any other Security.
Section 11.5. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date.
Section 11.6. Securities Payable on Redemption Date.
(a) Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date,
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the
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Company at the Redemption Date together with accrued interest to the Redemption
Date; provided, however, that installments of interest whose due date is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant record date with respect to such installments of
interest according to their terms and the provisions of Section 3.7.
(b) If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 11.7. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a specified place of payment therefor (with, if the Company or
the Trustee so require, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same
series, of any authorized denomination as requested by such holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
Section 12.1. Applicability of Article.
(a) The provisions of this article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 3.1 for Securities of such series.
(b) The minimum amount of any sinking fund payment provided
for by the terms of the Securities of any series is herein referred to as a
"mandatory sinking fund payment," and any payment in excess of such minimum
amount provided for by the terms of Securities of any series is herein referred
to as an "optional sinking fund payment." If provided for by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 12.2. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.
Section 12.2. Satisfaction of Sinking Fund Payments with
Securities.
In lieu of making all or part of any sinking fund payments in
cash with respect to
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Securities of any series, the Company
(a) may deliver to the Trustee for cancellation Outstanding
Securities of such series (other than any previously called for redemption) and
(b) may apply as a credit Securities of a series which have
been redeemed either at the election of the Company pursuant to the terms of
such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of
such series required to be made pursuant to the terms of such Securities
provided, that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of the series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 12.2 and will also deliver to the Trustee any
Securities so delivered. Not less than 30 days before each sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment in the manner specified in Section 11.3 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 11.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 11.6 and 11.7.
ARTICLE THIRTEEN
SUBORDINATION
Section 13.1 Applicability of Article.
The provisions of this article shall be applicable to the
Securities of any series which are subordinated in accordance with their terms
as contemplated by Section 3.1 to any Senior Indebtedness.
Section 13.2. Securities Subordinated to Senior Indebtedness.
(a) The Company, for itself and its successors, and each
Holder, by his acceptance of Securities, agrees that the payment of the
principal of and interest on the Securities is subordinated,
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to the extent and in the manner provided in this article (except as otherwise
specified as contemplated by Section 3.1 or such series of Securities) to the
prior payment in full of all Senior Indebtedness.
(b) This Article shall constitute a continuing offer to all
persons who, in reliance upon such provisions, become holders of, or continue to
hold, Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders are made obligees hereunder and
they and/or each of them may enforce such provisions.
Section 13.3. No Payment on Securities in Certain
Circumstances.
(a) Upon the maturity of any Senior Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof and interest thereon and
other amounts due in connection therewith shall first be paid in full, or such
payment duly provided for in accordance with the terms of such indebtedness or
in a manner otherwise satisfactory to the holders of such Senior Indebtedness,
before any payment is made
(i) on account of principal of or interest on the
Securities or
(ii) to acquire any of the securities for cash or
property other than Capital Stock of the Company or
(iii) on account of the redemption provisions for
the Securities.
(b) Upon the happening of an event of default (or if an event
of default would result upon any payment with respect to the Securities) with
respect to any Senior Indebtedness, as such event of default is defined therein
or in the instrument under which it is outstanding, permitting the holders to
accelerate the maturity thereof and (if the default is other than (i) default in
payment of the principal of or interest on or other amounts due in connection
with such Senior Indebtedness or (ii) a default for which notice is required to
be sent under the terms of such Senior Indebtedness by the holders thereof or
their representative) upon written notice thereof given to the Company and the
Trustee by the Holders of such Senior Indebtedness or their representative,
then, unless and until such event of default shall have been cured or waived or
shall have ceased to exist, no payment shall be made by the Company with respect
to the principal of or interest on the Securities or to acquire any of the
Securities or on account of the redemption provisions for the Securities;
provided, however, that if such default is a default other than a default
referred to in Clause (i) of this Section 13.3(b), nothing contianed in this
Section 13.3(b) shall prevent the Company from making payment of interest, when
due, on the Securities; and provided further, that if such default has not
become the subject of pretrial proceedings within 120 days after the occurrence
thereof (in the case of a default specified in clause (A) of this Section
13.3(b)), then the Company shall resume making any and all required payments in
respect of the Securities.
(c) In the event notwithstanding the provisions of this
Section 13.3, the Company shall make any payment to the Trustee on account of
the principal of or interest on the Securities or
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on account of the redemption provisions (other than as permitted by Section
13.3(b)), after the happening of an event of default of the type specified in
Clause (i) or (ii) of Section 13.3(b) above or after receipt by the Company and
the Trustee of written notice as provided in Section 13.3(b) above of any other
event of default with respect to any Senior Indebtedness, then, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist, such payment (subject to the provisions of Sections 13.7 and 13.8) shall
be held by the Trustee, in trust for the benefit of, and shall be paid forthwith
over and delivered to, the holders of Senior Indebtedness ( pro rata as to each
of such holders on the basis of the respective amounts of Senior Indebtedness
held by them) or their representative, as their respective interests may appear,
for application to the payment of all Senior Indebtedness remaining unpaid to
the extent necessary to pay all Senior Indebtedness in full in accordance with
its terms, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Indebtedness. The Company shall give prompt written
notice to the Trustee of any default under any Senior Indebtedness or under any
agreement pursuant to which Senior Indebtedness may have been issued.
Section 13.4. Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation or Reorganization of Company.
Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditor or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full (or to have such payment duly proved for) of
the principal thereof and interest due thereon and other amounts due in
connection therewith before the Holders are entitled to receive any payment on
account of the principal of or interest on the Securities;
(b) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to which the
Holders or the Trustee on behalf of the Holders would be entitled except for the
provisions of this article, shall be paid by the liquidating trustee or agent or
other person making such payment or distribution directly to the holders of
Senior Indebtedness or their representative to the extent necessary to make
payment in full of all Senior Indebtedness remaining unpaid, after giving effect
to any concurrent payment or distribution nor provision therefor to the holders
of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, shall be received by the Trustee or the
Holders or any Paying Agent (or, if the Company is acting as its own Paying
Agent, money for any such payment or distribution shall be segregated or held in
trust) on account of principal of or interest on the Securities before all
Senior Indebtedness is paid in full, or effective provision made for its
payment, such payment or distribution (subject to the provisions of Sections
13.7 and 13.8) shall be received and held in trust for and shall be paid over to
the holders of the Senior Indebtedness until all such Senior Indebtedness shall
have been paid in full, after giving
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effect to any concurrent payment or distribution or provision therefor to the
holders of such Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of
any dissolution, winding up, liquidation or reorganization of the Company or any
assignment for the benefit of the Company's creditors.
Section 13.5. Securityholders to be Subrogated to Rights of
Holders of Senior Indebtedness.
Subject to the payment in full of all Senior indebtedness, the
Holders of Securities shall be subrogated to the rights of the Holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until all amounts owing on the Securities
shall be paid in full, and for the purpose of such subrogation no such payments
or distributions to the holders of Senior Indebtedness by or on behalf of the
Company or by or on behalf of the Holders by virtue of this article which
otherwise would have been made to the Holders shall, as between the Company and
the Holders, be deemed to be payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this article are
and are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Senior Indebtedness, on the other
hand.
Section 13.6. Obligations of the Company Unconditional.
Nothing contained in this article or elsewhere in this
Indenture or in any Security is intended to or shall impair, as between the
Company and the Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and interest on the
Securities 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
and creditors of the Company other than the holders of Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this article of the Holders
of Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy. Upon any distribution of assets
of the Company referred to in this article, the Trustee, subject to the
provisions of Sections 6.1 and 6.3, and the Holders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up, liquidation, reorganization or similar proceedings
are pending, or a certificate of the liquidating trustee or agent or other
person making any distribution to the Trustee or to the Holders, for the purpose
of ascertaining the persons entitled to participate in such distribution, the
holders of Senior Indebtedness 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.
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Section 13.7. Trustee and Paying Agent Entitled to Assume
Payments Not Prohibited in Absence of Notice.
The Trustee and Paying Agent shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee or the Paying Agent or the taking of any other
action under this article by the Trustee unless and until the Trustee or the
Paying Agent shall have received written notice thereof from the Company or from
one or more holders of Senior Indebtedness or from any representative therefor
and, prior to the receipt of any such written notice, the Trustee and Paying
Agent, subject to the provisions of Sections 6.1 and 6.3, shall be entitled in
all respects conclusively to assume that no such facts exist.
Section 13.8. Application by Trustee of Moneys Deposited with
It.
Money or securities deposited in trust with the Trustee
pursuant to and in accordance with Section 10.1 shall be for the sole benefit of
Securityholders and, to the extent allocated for the payment of Securities,
shall not be subject to the subordination provisions of this article. Otherwise,
any deposit of moneys by the Company with the Trustee or any Paying Agent
(whether or not in trust) for the payment of the principal of or interest on any
Securities shall be subject to the provisions of Sections 13.1, 13.2, 13.3, 13.4
and 13.5 except that, if two Business Days prior to the date on which by the
terms of this Indenture any such moneys may become payable for any purpose
(including, without limitation, the payment of either the principal of or the
interest on any Security), the Trustee shall not have received with respect to
such monies the notice provided for in Section 13.7, then the Trustee or the
Paying Agent shall have full power and authority to receive such moneys and to
apply the same 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 during or
after such two Business Days. This section shall be construed solely for the
benefit of the Trustee and Paying Agent and nothing herein shall be construed to
relieve any Holders from the duties imposed upon them under Section 13.4(c) with
respect to moneys received in violation of the provisions of this article.
Section 13.9. Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms of
this Indenture, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with. The holders of Senior Indebtedness may
extend, renew, modify or amend the terms of the Senior Indebtedness or any
security therefor and release, sell or exchange such security and otherwise deal
freely with the Company, all without affecting the liabilities and obligations
of the parties to the Indenture or the Holders. No provision in any supplemental
indenture which affects the superior position of the holders of the Senior
Indebtedness shall be effective against the holders of the Senior Indebtedness
who have not consented thereto.
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Section 13.10. Securityholders Authorize Trustee to Effectuate
subordination of Securities.
Each Holder by his acceptance of Securities authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
article and appoints the Trustee his attorney-in-fact for which purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or any other similar remedy or otherwise) tending towards liquidation
of the business and assets of the Company, the immediate filing of a claim for
the unpaid balance of his Securities in the form required in said proceedings
and causing said claim to be approved. If the Trustee does not file a prior
claim or proof of debt in the form required in such proceeding prior to 30 days
before the expiration of the time to file such claim or claims, then the holders
of Senior Indebtedness are hereby authorized to have the right to file and are
hereby authorized to file an appropriate claim for and on behalf of the Holders.
Section 13.11. Right of Trustee and Paying Agent to Hold
Senior Indebtedness.
The Trustee and the paying Agent, in their individual
capacities, shall be entitled to all of the rights set forth in this article in
respect of any Senior Indebtedness at any time held by either of them to the
same extent any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee or the Paying Agent of any
of its rights as such Holder.
Section 13.12. This Article Not to Prevent Events of Default.
The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this article shall not
be construed as preventing the occurrence of an Event of Default under Section
5.1.
Section 13.13. No Fiduciary Duty Created to Holders of Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness by virtue of the provisions of this article.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
[Seal] DUSA Pharmaceuticals, Inc.
Attest:
By: /s/ D. Geoffrey Shulman
/s/ Nanette W. Mantell D. Geoffrey Shulman
Secretary Title: President and Chief Executive Officer
[Seal] AMERICAN STOCK TRANSFER & TRUST CO.
Attest:
/s/ Susan Silber By: /s/ Herbert Lemmer
Vice-Secretary Herbert Lemmer
Vice-President
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EXHIBIT 1
FORM OF ONE YEAR NOTE
[Form of Face of Note]
Number $_________
ONE YEAR NOTE
DUSA PHARMACEUTICALS, INC.
[ ]%
Due________________
DUSA Pharmaceuticals, Inc., a corporation duly organized and existing
under the laws of the State of New Jersey (herein referred to as the "Company"),
for value received, hereby promises to pay to _____________________ , or
registered assigns, the principal sum of $ ____________ , at the office or
agency of the Company in ____________________ , on _________________ , ______ ,
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, on each Interest Payment Date (as defined herein) on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum specified in the title of this Note from the Interest Payment Date,
next preceding the date of this Note 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 Note, or unless no
interest has been paid or duly provided for on the Notes since the Original
Issue Date as defined in the Indenture referred to on the reverse hereto) of
this Note, then from such original Issue Date, until payment of said principal
sum has been made or duly provided for. The interest so payable on any Interest
Payment Date will, subject to certain exceptions provided in the Indenture, be
paid to the person in whose name this Note is registered at the close of
business on the fifteenth day preceding such Interest Payment Date (the "Record
Date" corresponding to such Interest Payment Date), whether or not such Interest
Payment Date is a business day, and may, at the option of the Company, be paid
by check mailed to the registered address of such person. Notwithstanding the
foregoing, if the date hereof is after the Record Date corresponding to an
Interest Payment Date and before such Interest Payment Date, this Note shall
bear interest from such Interest Payment Date; provided, however, that if the
Company shall default in the payment of interest due on the Interest Payment
Date on the series of Securities of which this Note is part, then this Note
shall bear interest from the next preceding Interest Payment Date to which
interest has been paid or duly provided for, or, if no interest has been paid or
duly provided for on the Notes since the Original Issue Date of this Note, from
the Original Issue Date hereof. An "Interest Payment Date" shall be a date which
is 90, 180 or 270 days after the Original Issue Date of this Note.
This Note may be redeemed by the Company at any time in accordance with
the provisions therefore in the Indenture, for a payment in cash equal to 100%
of the then outstanding principal sum, plus accrued and unpaid interest to the
Redemption Date.
<PAGE> 70
Reference is made to the further provisions of this Note set forth on
the reverse hereto. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been signed by or on behalf
of the Trustee under such Indenture.
IN WITNESS WHEREOF, DUSA Pharmaceuticals, Inc. has caused this
instrument to be executed in its corporate name by the facsimile signatures of
its Chairman of the Board, its President, or one of its Vice Presidents or its
Secretary and impressed or imprinted with its corporate seal or a facsimile
thereof.
Dated: DUSA Pharmaceuticals, Inc.
By:
D. Geoffrey Shulman
Title: President and Chief Executive Officer
<PAGE> 71
[Form of Certificate of Authentication]
This is one of the Securities of the series designated pursuant to the
within-mentioned Indenture.
as Trustee as Trustee
OR
By
Authorized Signatory as Authenticating Agent
By:
Authorized Signatory
<PAGE> 72
[Form of Reverse Side of Note]
DUSA PHARMACEUTICALS, INC.
ONE YEAR NOTE
This Note is one of a duly authorized issue of debentures,
notes or other evidences of indebtedness of the Company (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of September 26, 1997, (herein
called the "Indenture"), duly executed and delivered by the Company to American
Stock Transfer & Trust Co., 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 Holders of the Securities.
The Securities may be issued in one or more series, which different series may
be issued in various aggregate principal amounts, may as between different
series and within a given series mature at different times, may bear interest
(if any) at different rates, may be subject to different redemption provisions
(if any), may be subject to different sinking, purchase or analogous funds (if
any), and may otherwise vary as in the Indenture provided. This Note is one of a
series designated as the One Year Notes of the Company, limited in aggregate
principal amount to the amount issuable upon exercise of the Company's Rights
declared as dividends on September 26, 1997, pursuant to a rights agreement
dated as of September 26, 1997 between the Company and American Stock Transfer &
Trust Co., as rights agent.
Interest on the Notes shall be calculated on the basis of a
360-day year consisting of twelve 30-day months.
If an Event of Default, as defined in the Indenture, with
respect to Notes of this series shall occur and be continuing, the principal of
the Notes of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than 80% in principal
amount of the Securities at the time Outstanding (as that term is defined in the
Indenture) of each series to be affected. The Indenture also contains provisions
permitting the Holders of 80% in aggregate principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities
of such series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Security issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
<PAGE> 73
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is registrable in the
Security Register upon surrender of this Note for registration of transfer at
the office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes are issuable only in registered form without coupons
in denominations of [$10] and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
[This Note is subordinated in right of payment to the prior
payment in full of all Senior Indebtedness. "Senior Indebtedness" means the
principal of interest on and other amounts due on or in connection with (i) any
Indebtedness of the Company (other than the Notes), whether outstanding on the
date of this Indenture or hereafter created, incurred, assumed or guaranteed in
any manner by the Company; and (ii) deferrals, renewals, extensions or
refundings of, or amendments, modifications or supplements to, such
Indebtedness, unless the instrument creating or evidencing such Indebtedness or
the assumption or guarantee thereof expressly provides that such Indebtedness
shall not be senior in right of payment to the Notes. Senior Indebtedness shall
not, however, include Indebtedness of the Company to a Subsidiary for money
borrowed or advances from such Subsidiary.]
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company, the Trustee and
any agent of the Company or the Trustee may treat the person in whose name this
Note is registered as the owner hereof for all purposes, whether or not this
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
All capitalized terms used in this Note and not defined herein
shall have the meanings assigned to them in the Indenture.
This Note shall be deemed to be a contract made under the laws
of the State of New Jersey and for all purposes shall be construed in accordance
with and governed by the laws of such state.
