UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.
For the quarterly period ended September 30, 1996
Commission file number 000-23266
UroMed Corporation
(Exact name of registrant as specified in its charter)
Massachusetts 04 - 3104185
------------- ------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
64 A Street, Needham, Massachusetts 02194
-----------------------------------------
(Address of principal executive offices)
(617) 433-0033
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
--- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
26,435,747 shares of Common stock, no par value, outstanding at October 31, 1996
Page 1
<PAGE>
UROMED CORPORATION
FORM 10-Q
For the quarterly period ended September 30, 1996
Table of contents
Page No.
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet at September 30, 1996 and
December 31, 1995 3
Statement of Operations for the three and
nine months ended September 30, 1996 and 1995 4
Statement of Cash Flows for the nine months
ended September 30, 1996 and 1995 5
Notes to Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 10
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
Page 2
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
UROMED CORPORATION
BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------------ -------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 9,015,166 $18,164,829
Short-term investments 33,849,903 42,262,477
Accounts receivable, net 189,070 275,071
Inventories 308,551 229,515
Prepaid expenses and other assets 707,460 921,055
------------------- ------------------
Total current assets 44,070,150 61,852,947
Fixed assets, net 3,245,625 2,042,331
Other assets 336,350 369,100
------------------- ------------------
$47,652,125 $64,264,378
=================== ==================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 933,376 $ 355,578
Accrued expenses 4,430,339 2,054,713
Deferred revenue 993,007 1,750,000
Capital lease obligations - 11,864
------------------- ------------------
Total current liabilities 6,356,722 4,172,155
------------------- ------------------
Stockholders' equity:
Preferred stock, $.01 par value; 500,000 shares
authorized; none issued - -
Common stock, no par value; 50,000,000 shares
authorized; 26,430,666 and 23,975,612 shares
issued and outstanding at September 30, 1996
and December 31, 1995, respectively 106,663,701 83,536,698
Additional paid-in capital 737,100 302,500
Net unrealized gain (loss) on investments available-
for-sale (34,993) 159,798
Deferred compensation (229,125) (273,000)
Accumulated deficit (65,841,280) (23,633,773)
------------------- ------------------
Total stockholders' equity 41,295,403 60,092,223
------------------- ------------------
$47,652,125 $64,264,378
=================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 3
<PAGE>
Item 1. Financial Statements (continued)
UROMED CORPORATION
STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------------- ----------------------------------------
1996 1995 1996 1995
------------------ ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
Revenues $ 800,364 $ 404,662 $ 2,118,977 $ 404,662
------------------ ------------------ ------------------- ------------------
Costs and expenses:
Cost of revenues 1,203,385 1,133,652 3,891,009 1,133,652
Research and development 2,039,275 1,273,182 35,733,860 5,443,685
Marketing and sales 2,785,345 439,462 4,925,543 1,444,051
General and administrative 822,080 476,196 1,948,303 1,441,692
------------------ ------------------ ------------------- ------------------
Total costs and expenses 6,850,085 3,322,492 46,498,715 9,463,080
------------------ ------------------ ------------------- ------------------
Loss from operations (6,049,721) (2,917,830) (44,379,738) (9,058,418)
Interest income 606,016 641,565 2,172,770 1,955,212
Interest expense 0 (862) (539) (3,593)
------------------ ------------------ ------------------- ------------------
Net loss $(5,443,705) $(2,277,127) $(42,207,507) $(7,106,799)
================== ================== =================== ==================
Net loss per share $ (.21) $ (.11) $ (1.67) $ (.34)
================== ================== =================== ==================
Weighted average common shares outstanding 26,429,093 20,954,237 25,244,303 20,867,823
================== ================== =================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 4
<PAGE>
Item 1. Financial Statements (continued)
UROMED CORPORATION
STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------------------
1996 1995
------------------- ------------------
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Net loss $(42,207,507) $(7,106,799)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 500,788 266,978
Issuance of common stock in connection with acquisition of technology 23,000,000 -
Issuance of common stock and stock options for services 434,600 477,820
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 86,001 (227,530)
Increase in inventories (79,036) (214,867)
(Increase) decrease in prepaid expenses and other current assets 213,595 (436,470)
Increase in accounts payable and accrued expenses 2,953,424 758,365
Increase (decrease) in deferred revenue (756,993) 1,250,000
------------------- ------------------
Net cash used in operating activities (15,855,128) (5,232,503)
Cash flows from investing activities:
Sale (purchases) of short-term investments, net 8,217,783 (32,122,513)
Purchase of fixed assets (1,660,207) (911,755)
Decrease in deposits 32,750 35,150
------------------- ------------------
Net cash provided by (used in) investing activities 6,590,326 (32,999,118)
------------------- ------------------
Cash flows from financing activities:
Principal payments on capital lease obligations (11,864) (25,925)
Proceeds from issuance of common stock, net of issuance costs 127,003 57,247
------------------- ------------------
Net cash provided by financing activities 115,139 31,322
------------------- ------------------
Net decrease in cash and cash equivalents (9,149,663) (38,200,299)
Cash and cash equivalents, beginning of period 18,164,829 42,332,175
------------------- ------------------
Cash and cash equivalents, end of period $ 9,015,166 $ 4,131,876
=================== ==================
Supplemental disclosure of cash flow information:
Interest paid $ 539 $ 3,593
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 5
<PAGE>
Item 1. Financial Statements (continued)
UROMED CORPORATION
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Nature of Business
Uromed Corporation (the "Company"), a Massachusetts corporation, was
incorporated in October 1990 to develop, manufacture and market products
for the management of urological and gynecological disorders.
2. Basis of Presentation
The balance sheet at September 30, 1996, the statement of operations for
the three months and nine months ended September 30, 1996 and 1995 and the
statement of cash flows for the nine months ended September 30, 1996 and
1995 are unaudited. In the opinion of management, all adjustments necessary
for a fair presentation of these financial statements have been included.
Such adjustments consisted only of normal recurring items. Interim results
are not necessarily indicative of results for a full year.
Certain prior year amounts have been reclassified to conform to the current
period financial statement presentation. The reclassifications had no
impact on net loss for these periods.
The financial statements should be read in conjunction with the Company's
audited financial statements and related footnotes for the year ended
December 31, 1995 which may be found in the Company's 1995 Annual Report to
Stockholders on Form 10-K.
3. Inventories
Inventories are stated at the lower of cost or market, cost being
determined using the first-in, first-out method. At September 30, 1996,
inventories consist of the following:
Raw materials $ 298,814
Work in process 9,737
===================
$ 308,551
===================
4. Net Loss Per Share
Net loss per share is determined by dividing net loss by the weighted
average number of common shares outstanding during the period. All common
stock equivalent shares from stock options have been excluded from the
calculation of weighted average number of common shares outstanding since
their inclusion would be antidilutive.
5. Acquisition of Technology
On May 9, 1996, the Company acquired all of the incontinence technology of
the ASI Liquidating Trust, the successor to Advanced Surgical Intervention,
Inc., including the Miniguard(TM) Patch, an FDA-cleared prescription
adhesive patch placed externally against the urethral opening to help block
leakage in women with mild to moderate stress incontinence. The Company
purchased the Miniguard Patch technology for $30.0 million, consisting of
$7.0 million in cash and $23.0 million in common stock. The acquisition of
this incontinence technology has been accounted for as purchased in-process
research and development and, as a result, the purchase price and related
expenses of $0.2 million have been charged to operations in the second
quarter of 1996.
Page 6
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6. Subsequent Event
On October 15, 1996, the Company completed the sale of $69.0 million
aggregate principal amount of its 6% Convertible Subordinated Notes due
October 15, 2003 (the "Notes") to certain qualified institutional buyers,
institutional accredited investors and foreign investors in reliance of
Rule 144A under the Securities Act of 1933 and to foreign investors.
The Notes are convertible at any time into shares of Common Stock of the
Company at a conversion price of $13.281 per share, subject to adjustment
under certain circumstances. Interest on the Notes is payable each year on
April 15 and October 15 at 6%. The Notes are redeemable at the option of
the Company on or after October 15, 1999. The Notes are unsecured
obligations of the Company and subordinated to all other Senior Debt (as
defined) of the Company.
Page 7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
Since its inception in October 1990, the Company has been engaged in the
design, development, manufacture and sale of products for the management of
urological and gynecological disorders. The Company's first two products,
the Reliance(R) Insert, a small, prescription, balloon-tipped single-use
plug, and the Miniguard(TM) Patch, a small, prescription, disposable
adhesive patch designed to be placed over the urinary opening, are intended
for the management of certain types of female urinary incontinence ("UI").
The Reliance Insert, which was cleared for marketing in the United States
by the U.S. Food and Drug Administration ("FDA") in August 1996, is also
commercially available in Germany, the United Kingdom, Finland, Norway,
Sweden, Denmark and The Netherlands. Commercial activities in France are
scheduled to be commenced by the Company's French distributor in the fourth
quarter of 1996. The first phase of the U.S. launch of the Reliance Insert
commenced officially on November 1, 1996.
The Company anticipates increased expenditures on manufacturing, sales and
marketing as it (i) moves ahead with commercialization of the Reliance
Insert in the United States and Europe and (ii) begins the manufacturing
process development, scale-up and other commercialization activities for
the Miniguard Patch. The Miniguard Patch was cleared for marketing in the
U.S. in May 1996, and is expected to be launched in the U.S. market in late
1997 or early 1998. In addition, the Company expects to increase future
facilities spending in order to accommodate changes in, as well as
increases to, its manufacturing space for both the Reliance Insert and the
Miniguard Patch.
In 1997, the Company anticipates it will continue to increase research and
development spending relating to its existing products and any new
products, including development and clinical testing of other urological
and gynecological products.
Results of Operations
The Company had revenues of $0.8 million for the third quarter of 1996 and
$2.1 million for the first nine months of 1996 compared to $0.4 million for
both the third quarter and first nine months of 1995. For 1996, this was an
increase of $0.4 million or 100% and $1.7 million or 425%, respectively,
over the comparable periods for 1995. Revenues in 1996 consisted primarily
of initial stocking shipments of the Reliance Insert product which were
sent to the Company's three European distributors and related recognition
of deferred revenue from a portion of the advance payments received upon
the signing of European distributorship agreements. Revenue in 1995 was the
result of initial stocking shipments of the Reliance Insert to the
Company's German distributor beginning in August 1995, in preparation for
the launch of the product in Germany in September 1995. This represented
the first time any product of the Company had been commercially available
anywhere in the world.
Cost of revenues were $1.2 million for the third quarter of 1996 and $3.9
million for the first nine months of 1996. This compares with cost of
revenues of $1.1 million for both the third quarter and first nine months
of 1995. For 1996, this was an increase of $0.1 million or 9% and $2.8
million or 255%, respectively, over the comparable periods for 1995. For
all periods in 1995 and 1996, these costs significantly exceeded product
revenue during the periods due to the current level of variable product
costs as well as the Company's manufacturing-related overhead costs,
relative to the low start-up volume of production in the periods. The
Company expects negative or low gross margins for the near term and,
accordingly, has considered this in its valuation of inventory. There can
be no assurance that the Company will ever realize sufficient production
volumes or otherwise reduce its manufacturing costs in order to raise gross
margins.
Research and development expenses increased by 54% to $2.0 million for the
third quarter of 1996 as compared to $1.3 million for the third quarter of
1995. The increase in research and development costs was primarily due to
additional engineering personnel and research projects as well as increased
clinical study costs.
The acquisition of the Miniguard Patch technology in May 1996 (see Note 5
of Notes to Financial Statements) has been accounted for as purchased
in-process research and development and, as a result, the purchase price of
$30.0 million, of which $7.0 million was paid in cash, and related expenses
of $0.2 million have been charged to operations in the second quarter of
1996. This charge resulted in research and development expenses increasing
by 561% to $35.7 million for the first nine months of 1996 as compared to
$5.4 million for the first nine months of 1995.
Before this charge, research and development expenses increased by 2% to
$5.5 million for the first nine months of 1996 as compared to $5.4 million
for the first nine months of 1995. The increase in research and development
costs was primarily due to additional engineering personnel and research
projects, outside consulting services and increased clinical study costs.
Partially offsetting this increase, manufacturing spending, starting in the
third quarter of 1995, is now being included in cost of revenues due to the
transition from the development stage to the commencement of commercial
product manufacturing.
Page 8
<PAGE>
Marketing and sales expenses increased by 600% to $2.8 million in the third
quarter of 1996 as compared to $0.4 million in the third quarter of 1995.
For the first nine months of 1996, marketing and sales expenses increased
by 250% to $4.9 million as compared to $1.4 million for the first nine
months of 1995. These increases were the result of preparations for the
U.S. launch of the Reliance Insert product including hiring marketing and
sales personnel, preparations for an advertising campaign, marketing
consulting fees, public relations activities, sales training, exhibit costs
and market research.
General and administrative expenses increased 60% to $0.8 million in the
third quarter of 1996 as compared to $0.5 million in the third quarter of
1995. For the first nine months of 1996, general and administrative
expenses increased by 36% to $1.9 million as compared to $1.4 million for
the first nine months of 1995. The increase in general and administrative
expenses is attributable to hiring additional administrative personnel and
increased consulting and legal expenses.
Interest income remained approximately the same at $0.6 million for the
third quarter of 1996 and the third quarter of 1995. Higher average cash
levels during the third quarter of 1996 were largely offset by lower
interest rates on investments. For the first nine months of 1996, interest
income increased by 10% to $2.2 million as compared to $2.0 million for the
first nine months of 1995. The increase was attributable to significantly
higher average interest bearing cash equivalents and short-term investments
for the first nine months of 1996 as a result of the completion of a public
offering of the Company's common stock in the fourth quarter of 1995,
partially offset by a decrease in interest rates during the period.
Net losses were $5.4 million and $2.3 million for the quarters and $42.2
million and $7.1 million for the nine month periods ended September 30,
1996 and 1995, respectively. Before the charge for acquired technology
mentioned above, net losses for the nine month periods ended September 30,
1996 and 1995 were $12.0 million and $7.1 million, respectively.
Liquidity and Capital Resources
At September 30, 1996, the Company had cash, cash equivalents and
short-term investments of $42.9 million, a decrease of $17.5 million from
$60.4 million at December 31, 1995. Working capital was $37.7 million at
September 30, 1996 as compared to $57.7 million at December 31, 1995, a
decrease of $20.0 million. These decreases in cash, cash equivalents and
short-term investments and in working capital during 1996 were mainly the
result of cash used in operations, including the $7.0 million cash portion
of the total $30.0 million purchase price of the acquired incontinence
technology relating to the Miniguard Patch. The balance of $23.0 million of
the purchase price consisted of 2,335,026 shares of common stock. The total
purchase price was charged to operations during the second quarter of 1996.
At September 30, 1996, the Company's funds were invested in U.S. government
obligations, corporate debt obligations and money market funds.
Net cash used in operating activities was $15.9 million during the nine
months ended September 30, 1996. Accounts receivable decreased by $0.1
million due to lower sales occurring near the end of the quarter ended
September 30, 1996 than the quarter ended December 31, 1995. Inventories
increased by $0.1 million primarily due to additional European distributors
requiring region-specific packaging. Prepaid expenses and other current
assets decreased by $0.2 million as the result of a decrease in interest
receivable on cash, cash equivalents and short-term investments. Accounts
payable and related accrued expenses together increased by $3.0 million
primarily as a result of expenses incurred in the launch of the Reliance
Insert product, conducting clinical studies and research and development
activities. Deferred revenue decreased by $0.8 million due to the
recognition of revenue from a portion of the advance payments received upon
the signing of European distributorship agreements.
Net cash provided by investing activities was $6.6 million during the nine
months ended September 30, 1996. Short-term investments decreased by $8.2
million due to a shift into investments with shorter maturities. Fixed
assets increased by $1.7 million primarily as a result of milestone
payments made on additional automated production equipment and purchases of
other machinery and equipment. At September 30, 1996, the Company has
outstanding commitments of approximately $1.2 million for the purchase of
information systems and other machinery and equipment, against which
advance and milestone payments of $0.5 million have already been made.
Net cash provided by financing activities was $0.1 million during the nine
months ended September 30, 1996 primarily as the result of proceeds
received from the exercise of stock options and from purchases under the
employee stock purchase plan.
On October 15, 1996, the Company completed the sale of $69.0 million
aggregate principal amount of its 6% Convertible Subordinated Notes due
October 15, 2003 (the "Notes") (see Note 6 of Notes to Financial
Statements). The Company believes that available cash, cash equivalents and
short term investments and the proceeds of the Notes will be sufficient to
meet the Company's operating expenses and capital requirements for the
foreseeable future. The Company's future liquidity and capital requirements
depend on numerous factors, including, but not limited to, development of
the Company's marketing capability, market acceptance of the Reliance
Insert and Miniguard Patch products, the uncertainty of medical
reimbursement, development of the Company's manufacturing capability and
achieving acceptable cost of production, the uncertain protection
Page 9
<PAGE>
afforded the Company by its intellectual property and patents relating to
the Reliance Insert and Miniguard Patch, the development status of other
potential products, potential acquisitions and other potential strategic
product opportunities. There can be no assurance that the Company will not
require additional financing or that, if required, such financing will be
available on terms acceptable to the Company.
Forward-Looking Statements and Associated Risks
Certain statements contained in this Quarterly Report on Form 10-Q may be
considered forward looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, including statements regarding (i) the planned progression of the
Company's commercialization strategies for the Reliance Insert and
Miniguard Patch, including the timing and extent of initial sales in the
United States and abroad, (ii) the planned increases in manufacturing
capacity for the Reliance Insert and Miniguard Patch, including the timing
and extent of expenditures needed for capital equipment and inventory
production, (iii) consumer acceptance of the use of the Reliance Insert and
Miniguard Patch as strategies for the self-care of UI and the size and
accessibility of the Company's target markets, (iv) the protection which
may be provided by the Company's patents and related technology in the area
of treatment of incontinence, (v) the Company's planned uses for the net
proceeds of the sale of the Convertible Subordinated Notes mentioned above
and other liquid resources, and (vi) the extent of future revenues,
expenses and results of operations and the sufficiency of the Company's
financial resources to meet planned operational costs and other expenditure
needs. In addition, from time to time, the Company issues statements in
public filings or press releases, or officers of the Company make public
oral statements with respect to the Company, that may be considered
forward-looking. These forward-looking statements are based largely on the
Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control. Actual
results could differ materially from these forward-looking statements as a
result of certain factors, including those described below:
o The uncertainty that the Reliance Insert and the Miniguard Patch will
gain market acceptance either among physicians or UI sufferers in the
United States or in Europe and the risk that the adverse effects
experienced by some of the parties enrolled in clinical trials of the
Company's Reliance Insert will be more prevalent in widespread
consumer use of such products and that such effects will affect the
market acceptance of these products.
o The dependence by the Company on the success of two products, the
Reliance Insert and the Miniguard Patch, neither of which have been
widely marketed.
o The uncertainty that the Company will be able to develop the ability
to produce commercial quantities of its products and produce such
quantities at an acceptable cost.
o The uncertainty that the Company will be able to develop an effective
sales force and implement a successful marketing plan for the Reliance
Insert and the Miniguard Patch in the United States.
o The Company's dependence on others for raw materials and certain
components of its products, including certain materials available only
from single sources.
o The effect of competing products and surgical and non-surgical
alternative treatments for incontinence.
o The uncertainty that the Company will be able to develop an effective
distribution network and implement a successful distribution strategy
for the Company's products in the United States, Europe and elsewhere.
o The uncertain protection afforded the Company by its patents and other
intellectual property relating to the Reliance Insert and the
Miniguard Patch.
o The uncertainty whether the Company will be able to achieve medical
reimbursement for the Reliance Insert or the Miniguard Patch in the
United States or in all the European markets targeted for the
Company's products.
o The uncertainty whether the Company will be able to manufacture,
market and sell its products at prices that permit it to achieve
satisfactory margins in the production and marketing of its products.
o Risks relating to FDA or other governmental oversight of the Company's
operations, including the possibility that the FDA could impose costly
additional labeling requirements on, or restrict the marketing of, the
Company's products, or suspend operations at one or more of the
Company's facilities.
Page 10
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Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. 10.1 Indenture, dated as of October 15, 1996, by and
between the Company, as Issuer, and
State Street Bank and Trust Company, as Trustee.
Exhibit No. 10.2 Purchase Agreement, dated as of October 8, 1996,
by and between the Company and the
Purchasers (as defined therein).
Exhibit No. 10.3 Registration Rights Agreement, dated as of
October 15, 1996, by and between the
Company and the Purchasers (as defined therein).
(b) Reports on Form 8-K
On October 9, 1996, the Company filed a current report on Form 8-K
disclosing that on September 30,1996, the Company issued a press
release reporting that it had commenced a proposed offering of up to
$50,000,000 principal amount of Convertible Subordinated Notes due
2003 to certain qualified institutional buyers, institutional
accredited investors and foreign investors.
The Company's current report on Form 8-K also disclosed that on
October 9,1996, the Company issued a press release reporting that
it had set the terms of its $60,000,000 in principal amount of 6%
Convertible Subordinated Notes due October 15, 2003 to be offered
to certain qualified institutional buyers, institutional accredited
investors and foreign investors.
Page 11
<PAGE>
SIGNATURES
Pursuant to requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
UroMed Corporation
Date: November 08, 1996 /s/ John G. Simon
------------------------- -----------------------------------
John G. Simon, President and
Chief Executive Officer
Date: November 08, 1996 /s/ Paul J. Murphy
------------------------- -----------------------------------
Paul J. Murphy, Treasurer and
Chief Financial Officer
Page 12
EXHIBIT 10.1
---------------------------------------------------
UroMed Corporation,
as Issuer
TO
State Street Bank and Trust Company,
as Trustee
---------------
Indenture
Dated as of October 15, 1996
---------------
$69,000,000
6% Convertible Subordinated Notes
due October 15, 2003
---------------------------------------------------
<PAGE>
UROMED CORPORATION
Certain Sections of this Indenture relating to Sections 310 through 318,
inclusive, of the Trust Indenture Act of 1939:
Trust Indenture Indenture Section
Act Section
ss. 310(a)(1).......................................6.9
(a)(2)..........................................6.9
(a)(3)..........................................Not Applicable
(a)(4)..........................................Not Applicable
(b)............................................6.8
6.10
ss. 311(a) .......................................6.13
(b)............................................6.13
ss. 312(a) .......................................7.1
............................................7.2
(b)............................................7.2
(c)............................................7.2
ss. 313(a) ........................................7.3
(b)............................................7.3
(c)............................................7.3
(d)............................................7.4
ss. 314(a)7.4
(a)(4)..........................................1.1
10.4
(b).............................................Not Applicable
(c)(1)...........................................1.2
(c)(2) .........................................1.2
(c)(3)...........................................Not Applicable
(d).............................................Not Applicable
(e).............................................1.2
ss. 315(a) .......................................6.1
(b).............................................6.2
(c).............................................6.1
(d).............................................6.1
(e).............................................5.14
ss. 316(a) .......................................1.1
(a)(1)(A)......................................5.2
5.12
(a)(1)(B)......................................5.13
(a)(2).........................................Not Applicable
(b)............................................5.8
(c)............................................1.4
ss. 317(a)(1).......................................5.3
(a)(2)........................................5.4
(b)..........................................10.3
ss. 3.18(a).........................................1.7
- -----------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
------------
Page
----
RECITALS OF THE COMPANY...................................... 1
ARTICLE 1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION.................................................. 1
SECTION 1.1. Definitions.............................. 1
SECTION 1.2. Compliance Certificates and Opinions..... 11
SECTION 1.3. Form of Documents Delivered to the
Trustee................................................ 11
SECTION 1.4. Acts of Holders of Securities............ 12
SECTION 1.5. Notices, Etc., to Trustee and Company.... 14
SECTION 1.6. Notice to Holders of Securities, Waiver.. 15
SECTION 1.7. Effect of Headings and Table of
Contents............................................... 15
SECTION 1.8. Successors and Assigns................... 15
SECTION 1.9. Separability Clause...................... 15
SECTION 1.10. Benefits of Indenture................... 15
SECTION 1.11. Governing Law............................ 16
SECTION 1.12. Legal Holidays.......................... 16
SECTION 1.13. Conflict with Trust Indenture Act....... 16
ARTICLE 2. SECURITY FORMS................................... 16
SECTION 2.1. Forms Generally.......................... 16
SECTION 2.2. Forms of Securities...................... 17
SECTION 2.3. Form of Trustee's Certificate of
Authentication.......................... 30
SECTION 2.4. Form of Conversion Notice................ 30
ARTICLE 3. THE SECURITIES................................... 31
SECTION 3.1. Title and Terms.......................... 31
SECTION 3.2. Denominations............................ 32
SECTION 3.3. Execution, Authentication, Delivery and
Dating................................................. 32
SECTION 3.4. Temporary Securities..................... 33
SECTION 3.5. Global Securities, Non-Global Securities. 34
SECTION 3.6. Registration, Registration of Transfer and
Exchange; Restrictions on Transfer..................... 35
SECTION 3.7. Mutilated, Destroyed, Lost or Stolen
Securities............................................. 41
SECTION 3.8. Payment of Interest: Interest Rights
Preserved.............................................. 42
SECTION 3.9. Persons Deemed Owners.................... 43
SECTION 3.10. Cancellation............................ 44
SECTION 3.11. Computation of Interest................. 44
SECTION 3.12. CUSIP and ISIN Numbers.................. 44
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ARTICLE 4. SATISFACTION AND DISCHARGE....................... 44
SECTION 4.1. Satisfaction and Discharge of Indenture.. 44
SECTION 4.2. Application of Trust Money............... 46
ARTICLE 5. REMEDIES......................................... 46
SECTION 5.1. Events of Default........................ 46
SECTION 5.2. Acceleration of Maturity: Rescission and
Annulment.............................................. 48
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee................................. 49
SECTION 5.4. Trustee May File Proofs of Claim......... 49
SECTION 5.5. Trustee May Enforce Claims Without
Possession of Securities............................... 51
SECTION 5.6. Application of Money Collected........... 51
SECTION 5.7. Limitation on Suits...................... 51
SECTION 5.8. Unconditional Right of Holders to Receive
Principal, Premium and Interest and to Convert......... 52
SECTION 5.9. Restoration of Rights and Remedies....... 52
SECTION 5.10. Rights and Remedies Cumulative.......... 53
SECTION 5.11. Delay or Omission Not Waiver............ 53
SECTION 5.12. Control by Holders of Securities........ 53
SECTION 5.13. Waiver of Past Defaults................. 53
SECTION 5.14. Undertaking for Costs................... 54
SECTION 5.15. Waiver of Stay, Usury or Extension
Laws................................................... 54
ARTICLE 6. THE TRUSTEE...................................... 54
SECTION 6.1. Certain Duties and Responsibilities...... 54
SECTION 6.2. Notice of Defaults....................... 55
SECTION 6.3. Certain Rights of Trustee................ 55
SECTION 6.4. Not Responsible for Recitals or Issuance of
Securities............................................. 56
SECTION 6.5. May Hold Securities...................... 56
SECTION 6.6. Money Held in Trust...................... 56
SECTION 6.7. Compensation and Reimbursement........... 57
SECTION 6.8. Disqualification; Conflicting Interests. 57
SECTION 6.9. Corporate Trustee Required: Eligibility.. 57
SECTION 6.10. Resignation and Removal, Appointment of
Successor.............................................. 58
SECTION 6.11. Acceptance of Appointment by
Successor.............................................. 59
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business................................. 59
SECTION 6.13. Preferential Collection of Claims Against
Company................................................ 60
SECTION 6.14. Appointment of Authenticating Agent..... 60
ARTICLE 7. HOLDERS' LISTS AND REPORTS BY TRUSTEE AND
COMPANY...................................................... 62
SECTION 7.1. Company to Furnish Trustee Names and
Addresses of Holders................................... 62
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SECTION 7.2. Preservation of Information:
Communications to Holders............................. 62
SECTION 7.3. Reports by Trustee....................... 62
SECTION 7.4. Reports by Company....................... 63
ARTICLE 8. CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE............................................ 63
SECTION 8.1. Company May Consolidate, Etc., Only
on Certain Terms....................................... 63
SECTION 8.2. Successor Substituted.................... 64
ARTICLE 9. SUPPLEMENTAL INDENTURES.......................... 64
SECTION 9.1. Supplemental Indentures Without
Consent of Holders of Securities....................... 64
SECTION 9.2. Supplemental Indentures with Consent
of Holders of Securities............................... 65
SECTION 9.3. Execution of Supplemental Indentures..... 66
SECTION 9.4. Effect of Supplemental Indentures........ 67
SECTION 9.5. Conformity with Trust Indenture Act...... 67
SECTION 9.6. Reference in Securities to Supplemental
Indentures............................................. 67
ARTICLE 10. COVENANTS....................................... 67
SECTION 10.1. Payment of Principal, Premium and
Interest............................................... 67
SECTION 10.2. Maintenance of Office or Agency......... 67
SECTION 10.3. Money for Security Payments to Be
Held in Trust.......................................... 68
SECTION 10.4. Statement by Officers as to Default,.... 69
SECTION 10.5. Existence............................... 69
SECTION 10.6. Maintenance of Properties............... 70
SECTION 10.7. Payment of Taxes and Other Claims....... 70
SECTION 10.8. Registration and Listing................ 70
SECTION 10.9. Compliance with Rule 144A............... 71
SECTION 10.10. Resale of Certain Securities........... 71
SECTION 10.11. Registration Rights.................... 71
SECTION 10.12. Waiver of Certain Covenants............ 73
ARTICLE 11. REDEMPTION OF SECURITIES........................ 73
SECTION 11.1. Right of Redemption..................... 73
SECTION 11.2. Applicability of Article................ 73
SECTION 11.3. Election to Redeem, Notice to Trustee... 73
SECTION 11.4. Selection by Trustee of Securities to
Be Redeemed............................................ 73
SECTION 11.5. Notice of Redemption.................... 74
SECTION 11.6. Deposit of Redemption Price............. 75
SECTION 11.7. Securities Payable on Redemption
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Date................................................... 75
SECTION 11.8. Securities Redeemed in Part............. 75
ARTICLE 12. CONVERSION OF SECURITIES........................ 76
SECTION 12.1. Conversion Privilege and Conversion
Rate................................................... 76
SECTION 12.2. Exercise of Conversion Privilege........ 76
SECTION 12.3. Fractions of Shares..................... 78
SECTION 12.4. Adjustment of Conversion Rate........... 79
SECTION 12.5. Notice of Adjustments of Conversion
Rate................................................... 84
SECTION 12.6. Notice of Certain Corporate Action...... 85
SECTION 12.7. Company to Reserve Common Stock......... 86
SECTION 12.8. Taxes on Conversions.................... 86
SECTION 12.9. Covenant as to Common Stock............. 86
SECTION 12.10. Cancellation of Converted Securities... 86
SECTION 12.11. Provision in Case of Consolidation,
Merger or Sale of Assets............................... 86
SECTION 12.12. Optional Provision in Case of a
Distribution of Certain Shares......................... 88
ARTICLE 13. SUBORDINATION OF SECURITIES..................... 92
SECTION 13.1. Securities Subordinate to Senior Debt... 92
SECTION 13.2. Payment Over of Proceeds Upon
Dissolution, Etc....................................... 92
SECTION 13.3. Prior Payment to Senior Debt Upon
Acceleration of Securities............................. 93
SECTION 13.4. No Payment When Senior Debt in
Default................................................ 94
SECTION 13.5. Payment Permitted If No Default......... 95
SECTION 13.6. Subrogation to Rights of Holders of
Senior Debt............................................ 95
SECTION 13.7. Provisions Solely to Define Relative
Rights................................................. 95
SECTION 13.8. Trustee to Effectuate Subordination..... 96
SECTION 13.9. No Waiver of Subordination Provisions... 96
SECTION 13.10. Notice to Trustee...................... 96
SECTION 13.11. Reliance on Judicial Order or
Certificate of Liquidating Agent....................... 97
SECTION 13.12. Trustee Not Fiduciary for Holders
of Senior Debt. ...................................... 97
SECTION 13.13. Rights of Trustee as Holder of
Senior Debt; Preservation of Trustee's Rights. ....... 98
SECTION 13.14. Article Applicable to Paying Agents..... 98
SECTION 13.15. Certain Conversions and Repurchases
Deemed Payment. ...................................... 98
ARTICLE 14. REPURCHASE OF SECURITIES AT THE
OPTION OF THEHOLDER UPON A CHANGE IN CONTROL................. 99
SECTION 14.1. Right to Require Repurchase............. 99
SECTION 14.2. Conditions to the Company's Election
to Pay the Repurchase Price in Common Stock............ 99
SECTION 14.3. Notices: Method of Exercising
Repurchase Right, Etc.................................. 100
SECTION 14.4. Certain Definitions..................... 103
ANNEX A................................................................ 108
ANNEX B................................................................ 111
ANNEX C................................................................ 114
ANNEX D ............................................................... 116
<PAGE>
BOS-BUS:326725.1
INDENTURE, dated as of October 15, 1996, between UroMed Corporation, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts, having its principal executive office at 64 A Street, Needham,
Massachusetts, 02194, (herein called the "Company"), and State Street Bank and
Trust Company, a trust company duly organized and existing under the laws of The
Commonwealth of Massachusetts as Trustee hereunder (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 6%
Convertible Subordinated Notes due October 15, 2003 (herein called the
"Securities") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture.
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done. Further, all
things necessary to duly authorize the issuance of the Common Stock of the
Company issuable upon the conversion of the Securities, and to duly reserve for
issuance the number of shares of Common Stock issuable upon such conversion,
have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
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
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE.
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
<PAGE>
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(3) unless the context otherwise requires, any reference to a
statute, rule or regulation refers to the same (including any successor
statute, rule or regulation thereto) as it may be amended from time to
time; and
(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, 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
(5) 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.
"Act", when used with respect to any Holder of a Security, has the meaning
specified in Section 1.4.
"additional interest" has the meaning specified in Section 10.11
"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.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of Euroclear and Cedel, and of the Depositary for such Security, in
each case to the extent applicable to such transaction and as in effect from
time to time.
"Authenticating Agent" means any Person authorized pursuant to Section
6.14 to act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a vote duly adopted by the Board of Directors, a
copy of which, certified by the Clerk or an Assistant Clerk 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, shall have been delivered to the
Trustee.
<PAGE>
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"Business Day", when used with respect to any place of payment, place of
conversion or any other place, as the case may be, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in such place of payment, place of conversion or other place, as the case may
be, are authorized or obligated by law or executive order to close; provided,
however, that a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close shall not be a
Business Day for purposes of Sections 10.1, 10.3 or 11. 7.
"Cedel" means Cedel Bank, S.A. (or any successor securities clearing
agency).
"Change in Control" has the meaning specified in Section 14.4.
"Closing Price" means, with respect to the Common Stock of the Company,
for any day, the reported last bid price per share on the Nasdaq National Market
or, if the Common Stock is not quoted on the Nasdaq National Market, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading, or if not quoted on the Nasdaq National Market or listed or
admitted to trading on any national securities exchange, the average of the
closing bid and asked prices per share in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose.
"Commission" means the United States Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act, 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.
"Common Stock" means the Common Stock, no par value per share, of the
Company authorized at the date of this instrument as originally executed.
Subject to the provisions of Sections 12.11 and 12.12, shares issuable on
conversion or repurchase of Securities shall include only shares of Common Stock
or shares of any class or classes of common stock resulting from any
reclassification or reclassifications thereof; provided, however, that if at any
time there shall be more than one such resulting class, the shares so issuable
on conversion of Securities shall include shares of all such classes, and the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"common stock" includes any stock of any class of capital stock which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the issuer
thereof and which is not subject to redemption by the issuer thereof.
<PAGE>
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"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Notice" has the meaning specified in Section 14.3.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President or a Vice
President, and by its principal financial officer, Treasurer, an Assistant
Treasurer, its Clerk or an Assistant Clerk, and delivered to the Trustee.
"Constituent Person" has the meaning specified in Section 12.11.
"Conversion Rate" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered
(which at the date of this Indenture is located at Two International Place,
Fourth Floor, Boston, Massachusetts 02110).
"corporation" means a corporation, company, association, joint-stock
company or business trust.
"Defaulted Interest" has the meaning specified in Section 3.8.
"Depositary" means, with respect to any Security, a clearing agency that
is registered as such under the Exchange Act and is designated by the Company to
act as Depositary for such Security (or any successor securities clearing agency
so registered).
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"DTC" means The Depository Trust Company, a New York corporation.
"Effectiveness Period" has the meaning specified in the Registration
Rights Agreement.
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Event of Default" has the meaning specified in Section 5.1.
<PAGE>
-5-
"Exchange Act" means the United States Securities Exchange Act of 1934.
"Expiration Date" has the meaning specified in Section 1.4.
"Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or a nominee thereof.
"Holder" means the Person in whose name a Security is registered in the
Security Register.
"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, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article Fourteen or otherwise.
"Non-electing Share" has the meaning specified in Section 12.11.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or a Vice President and by the principal financial officer, the Treasurer, an
Assistant Treasurer, the Clerk or an Assistant Clerk of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company and who shall be reasonably acceptable to the Trustee.
"Other Securities" means the Securities sold by the Purchasers in the
initial offering contemplated by the Purchase Agreement in reliance on an
exemption from the registration requirements of the Securities Act other than
Rule 144A and Regulation S.
"Other Stock" has the meaning specified in Section 12.12.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
<PAGE>
-6-
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money
in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall
act as its own Paying Agent) for the Holders of such Securities,
provided that if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 3.7
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture;
provided, however, that in determining whether the Holders of the requisite
principal amount of 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 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 such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate. unincorporated organization or
government or any agency or political subdivision thereof.
"Post-Effective Registration Default" has the meaning specified in
Section 10.11.
"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 3.7 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.
<PAGE>
-7-
"Purchase Agreement" means the Purchase Agreement, dated October 8, 1996,
between the Company and the Purchasers, as such agreement may be amended from
time to time.
"Purchasers" means Goldman, Sachs & Co., PaineWebber Incorporated and
J.P. Morgan Securities Inc.
"Record Date" means any Regular Record Date or Special Record Date.
"Record Date Period" means the period from the close of business of any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date.
"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.
"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.
"Registrable Securities" has the meaning specified in the Registration
Rights Agreement.
"Registration Default" has the meaning specified in Section 10.11.
"Registration Rights Agreement" has the meaning specified in
Section 10.11.
"Regular Record Date" for interest payable in respect of any Security on
any Interest Payment Date means the April 1st or October 1st (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificate" means a certificate substantially in the
form set forth in Annex A.
"Regulation S Global Security" has the meaning specified in Section 2.1.
"Regulation S Legend" means a legend substantially in the form of the
legend required in the form of Security set forth in Section 2.2 to be placed
upon the Regulation S Securities.
"Regulation S Securities" means all Securities required pursuant to
Section 3.6(c) to bear a Regulation S Legend. Such term includes the Regulation
S Global Security.
"Repurchase Date" has the meaning specified in Section 14.1.
<PAGE>
-8-
"Repurchase Price" has the meaning specified in Section 14.1.
"Restricted Global Security" has the meaning specified in Section 2.1.
"Restricted Period" means the period of 41 consecutive days beginning on
and including the later of (i) the day on which Securities are first offered to
persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the last original issuance date of the Securities.
"Restricted Securities" means all Securities required pursuant to
Section 3.6(c) to bear any Restricted Securities Legend. Such term includes
the Restricted Global Security.
"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Annex B.
"Restricted Securities Legend" means, collectively, the legends
substantially in the forms of the legends required in the form of Security set
forth in Section 2.2 to be placed upon each Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Securities" means the Securities purchased by the Purchasers
from the Company pursuant to the Purchase Agreement, other than the Other
Securities and the Regulation S Securities.
"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of 1933.
"Securities Act, Legend" means a Restricted Securities Legend or a
Regulation S Legend.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.6.
"Senior Debt" means the principal of (and premium, if any) and interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) on, and all fees and
other amounts (including collection expenses, attorney's fees and late charges)
owing with respect to, the following, whether direct or indirect, absolute or
contingent, secured or unsecured, due or to become due, outstanding at the date
of execution of this Indenture or thereafter incurred, created or assumed: (a)
indebtedness of the Company for money borrowed or evidenced by bonds,
debentures, notes or similar instruments,
<PAGE>
-9-
(b) reimbursement obligations of the Company with respect to letters of credit,
bankers' acceptances and similar facilities issued for the account of the
Company, (c) every obligation of the Company issued or assumed as the deferred
purchase price of property or services purchased by the Company, excluding any
trade payables and other accrued current liabilities incurred in the ordinary
course of business, (d) obligations of the Company as lessee under leases
required to be capitalized on the balance sheet of the lessee under United
States generally accepted accounting principles, (e) obligations of the Company
under interest rate and currency swaps, caps, floors, collars or similar
arrangements intended to protect the Company against fluctuations in interest or
currency exchange rates, (f) indebtedness of others of the kinds described in
the preceding clauses (a) - (e) that the Company has assumed, guaranteed or
otherwise assured the payment thereof, directly or indirectly, and/or (g)
deferrals, renewals, extensions and refundings of, or amendments, modifications
or supplements to, any indebtedness or obligation described in the preceding
clauses (a) through (f) whether or not there is any notice to or consent of the
Holders; provided, however, that the following shall not constitute Senior Debt:
(i) any particular indebtedness or obligation that is . owed by the Company to
any of its direct and indirect Subsidiaries and (ii) any particular
indebtedness, deferral, renewal, extension or refunding if it is expressly
stated in the governing terms or in the assumption thereof that the indebtedness
involved is not senior in right of payment to the Securities or that such
indebtedness is pari passu with or junior to the Securities.
"Shelf Registration Statement" has the meaning specified in the
Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Company pursuant to Section 3.8.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a corporation, limited liability company, partnership
or other entity 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 and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock or other equity interests in the
corporation, limited liability company, partnership or other entity which
ordinarily has or have voting power for the election of directors, or persons
performing similar functions, whether at all times or only so long as no senior
class of stock or other interests has or have such voting power by reason of any
contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such
<PAGE>
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particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.7 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.
"Surrender Certificate" means a certificate substantially in the form
set forth in Annex D.
"Trading Day" means (i) if the Common Stock is quoted on the Nasdaq
National Market or any other system of automated dissemination of quotations of
securities prices, a day on which trades may be effected through such system;
(ii) if the Common Stock is listed or admitted for trading on any national
securities exchange, a day on which such national securities exchange is open
for business; or (iii) if the Common Stock is not listed or admitted for trading
on any national securities exchange or quoted on the Nasdaq National Market or
any other system of automated dissemination of quotation of securities prices, a
day on which the Common Stock is traded regular way in the over-the-counter
market and for which a closing bid and a closing asked price for the Common
Stock are available.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"United States" means the United States of America (including the States
and the District of Columbia), its territories. its possessions and other areas
subject to its jurisdiction (its 11 possessions" including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
"Unrestricted Securities Certificate" means a certificate substantially
in the form set forth in Annex .
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
<PAGE>
-11-
SECTION 1.2. Compliance Certificates and Opinions.
----------- ------------------------------------
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) 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,
(3) a statement that, in the opinion of 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
(4) 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 the Trustee.
----------- ------------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters
<PAGE>
-12-
upon which such certificate or opinion is based are erroneous. Any such
certificate or opinion of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders of Securities.
----------- -----------------------------
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given or taken by
Holders of Securities 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 or proxy duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record is delivered to the Trustee and, where it is hereby
expressly required, to the Company. The Trustee shall promptly deliver to the
Company copies of all such instruments and records delivered to the Trustee.
Such instrument or instruments and record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
of Securities signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent or proxy, or of the
holding by any Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 6.3) conclusive in favor of the Trustee and
the Company if made in the manner provided in this Section.
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
acknowledgements 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 execution of any such instrument or
writing and the authority of the Person executing the same may also be proved in
any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register. 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
<PAGE>
-13-
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,
regardless of whether notation of such action is made upon such Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, regardless of whether such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date, if any, by
Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Company
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense,
shall
<PAGE>
-14-
cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each
Holder of Securities in the manner set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 5.2, (iii) any request to institute proceedings referred
to in Section 5.7(2) or (iv) any direction referred to in Section 5.12. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, regardless whether such
Holders remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date, if any, by Holders of the requisite principal amount of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Trustee from setting a new record date for any action
(whereupon the record date previously set shall automatically and without any
action by any Person be cancelled and of no effect), nor shall anything in this
paragraph be construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Securities on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Company in writing and to each Holder of Securities in the manner set forth in
Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Expiration Date"
and from time to time may change the Expiration Date to any earlier or later
day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities in the manner set forth in Section 1.6, on or prior
to the existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to this Section, the party hereto that
set such record date shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 1.5. Notices, Etc., to Trustee and Company.
----------- -------------------------------------
Any request, demand, authorization, direction, notice, consent, election,
waiver or other Act of Holders of Securities or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) 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 and received at its Corporate
Trust Office, Attention: Corporate Trust Department (UroMed Corporation
6% Convertible Subordinated Notes due October 15, 2003), or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing, mailed, first-class postage prepaid, or telecopied and
confirmed by mail, first-class postage prepaid, or delivered by hand or
overnight courier, addressed to the Company at 64 A Street, Needham,
Massachusetts, telecopy no.: (617) 433-0032, Attention: Chief Financial
Officer, or at any other address previously furnished in writing to the
Trustee by the Company.
<PAGE>
-15-
SECTION 1.6. Notice to Holders of Securities, Waiver.
----------- ---------------------------------------
Where this Indenture provides for notice 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 (if any), and not earlier than the earliest date (if any),
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
the equivalent of such notice. Waivers of notice by Holders 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.
In 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 for every purpose hereunder.
SECTION 1.7. Effect of Headings and Table of Contents.
----------- ----------------------------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.8. 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 1.9. Separability Clause.
----------- -------------------
In case any provision in this Indenture or 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 1.10. 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, the holders of Senior Debt and the Holders of Securities, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
<PAGE>
-16-
SECTION 1.11. Governing Law.
------------ -------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF
AMERICA.
SECTION 1.12. Legal Holidays.
------------ --------------
In any case where any Interest Payment Date, Redemption Date, Repurchase
Date or Stated Maturity of any Security or the last day on which a Holder of a
Security has a right to convert his Security shall not be a Business Day at a
place of payment or place of conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal of, premium, if any, or interest on, or conversion of, such
Security need not be made on such day, but may be made on or by the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date, Redemption Date or Repurchase Date, or at the Stated
Maturity or on such last day for conversion; provided, however, that in the case
that payment is made on such succeeding Business Day, no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date,
Repurchase Date, Stated Maturity or last day for conversion, as the case may be,
to such succeeding Business Day.
SECTION 1.13. Conflict with Trust Indenture Act.
------------ ---------------------------------
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision of the Trust Indenture Act shall be deemed to apply to this Indenture
as so modified or to be excluded, as the case may be. Until such time as this
Indenture shall be qualified under the Trust Indenture Act, this Indenture, the
Company and the Trustee shall be deemed for all purposes hereof to be subject to
and governed by the Trust Indenture Act to the same extent as would be the case
if this Indenture were so qualified on the date hereof.
ARTICLE TWO.
SECURITY FORMS
SECTION 2.1. Forms Generally.
----------- ---------------
The Securities shall be in substantially the forms set forth in this
Article, 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
<PAGE>
-17-
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner provided that it is permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities, as evidenced by their execution thereof.
Upon their original issuance, Rule 144A Securities shall be issued in the
form of one or more Global Securities registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee, as custodian for DTC,
for credit by DTC to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct). Such
Global Securities, together with their Successor Securities which are Global
Securities other than the Regulation S Global Security, are collectively herein
called the "Restricted Global Security". Upon their original issuance,
Regulation S Securities shall be issued in the form of one or more Global
Securities registered in the name of DTC, as depositary, or its nominee and
deposited with the Trustee, as custodian for DTC, for credit to the respective
accounts of the beneficial owners of the Securities represented thereby (or such
other accounts as they may direct), provided that upon such deposit all such
Securities shall be credited to or through accounts maintained at DTC by or on
behalf of Euroclear or Cedel. Such Global Securities, together with their
Successor Securities which are Global Securities, are collectively herein called
the "Regulation S Global Security".
Upon their original issuance, Other Securities shall not be issued in the
form of a Global Security or in any other form intended to facilitate book-entry
trading in beneficial interests in such Securities.
SECTION 2.2. Forms of Securities.
----------- -------------------
[FORM OF FACE]
[If this Security is a Restricted Security, then insert -- THIS SECURITY
AND THE COMMON STOCK ISSUABLE UPON ITS CONVERSION HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY ANY INITIAL INVESTOR THAT
IS NOT A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT, (1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
<PAGE>
-18-
COMPLYING WITH RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER OF
AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR (B) BY ANY
INITIAL INVESTOR THAT IS A QUALIFIED INSTITUTIONAL BUYER OR BY ANY SUBSEQUENT
INVESTOR, AS SET FORTH IN CLAUSE (A) ABOVE OR TO AN INSTITUTION THAT IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) or (7) IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND,
IN EACH CASE (A) AND (B) IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. SECURITIES OWNED BY AN
INITIAL INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN
BOOK-ENTRY FORM AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS, AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW.]
[If the Security is a Regulation S Security, then insert -- THIS SECURITY
AND THE COMMON STOCK ISSUABLE UPON ITS CONVERSION HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") . AND MAY NOT BE OFFERED,
SOLD OR DELIVERED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
ANY U.S. PERSON, UNLESS SUCH SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE.]
[If the Security is a Global Security, then insert -- THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO
TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[If the Security is a Global Security and The Depository Trust Company is
to be the Depositary therefor, then insert -- UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME
<PAGE>
-19-
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
UROMED CORPORATION
6% CONVERTIBLE SUBORDINATED NOTE DUE OCTOBER 15, 2003
No. ____________ $________
[IF RESTRICTED GLOBAL SECURITY - CUSIP NO. 917274AA0]
[IF ANY REGULATION S SECURITY - CUSIP NO. U9153EAA0]
[IF REGULATION S GLOBAL SECURITY - ISIN NO. - USU9153EAA02]
[IF OTHER SECURITY - CUSIP NO. - 917274AB81]
UROMED CORPORATION, a corporation duly organized and existing under the
laws of the Commonwealth of Massachusetts (herein called the "Company", which
term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to , or registered
assigns, the principal sum of _____________ Dollars ($____) [if this Security is
a Global Security, then insert - (which principal amount may from time to time
be increased or decreased to such other principal amounts (which, taken together
with the principal amounts of all other Outstanding Securities, shall not exceed
$69,000,000 in the aggregate at any time) by adjustments made on the records of
the Trustee hereinafter referred to in accordance with the Indenture)] on
October 15, 2003 and to pay interest thereon, from October 15, 1996, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on April 15 and October 15 in each year, commencing
April 15, 1997, at the rate of 6% per annum, until the principal hereof is due,
and at the rate of 6% per annum on any overdue principal and premium, if any,
and, to the extent permitted by law, on any overdue interest. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the April
1 or October 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Company, notice whereof shall
<PAGE>
-20-
be given to Holders of Securities not less than 10 days prior to such Special
Record Date, or be paid at any time 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, all as more
fully provided in the Indenture. Payment of the principal of (and premium, if
any, on) this Security shall be made upon the surrender of this Security at the
option of the Holder at the office or agency of the Company as may be designated
by it for such purpose in the Borough of Manhattan, The City of New York, 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, or at such
other offices or agencies as the Company may designate, by Dollar check or by
transfer to a Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Securities in excess of $2,000,000, and only if
such Holder shall have furnished wire instructions in writing to the Trustee no
later than 15 days prior to the relevant payment date) maintained by the payee
with a bank in the United States of America. Payment of interest on this
Security may be made by Dollar check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register, or, upon
written application by the Holder to the Security Registrar setting forth wire
instructions not later than the relevant Record Date, by transfer to a Dollar
account (such a transfer to be made only to a Holder of an aggregate principal
amount of Securities in excess of $2,000,000) maintained by the payee with a
bank in the United States of America.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof or by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal.
Dated:
UROMED CORPORATION
By:
----------------------------
<PAGE>
-21-
Attest:
- ----------------------
Name:
Title:
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "6% Convertible Subordinated Notes due October 15,
2003" (herein called the "Securities"), limited in aggregate principal amount to
$69,000,000, issued and to be issued under an Indenture, dated as of October 15,
1996 (herein called the "Indenture"), between the Company and State Street Bank
and Trust Company, as Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Debt and the Holders of the
Securities and of the terms upon which the Securities aRe, and are to be,.
authenticated and delivered.
The Securities are subject to redemption upon not less than 30 days'
notice by mail, at any time on or after October 15, 1999, as a whole or in part,
at the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount) if redeemed during the 12-month period
beginning October 15 of the years indicated:
Year Redemption Price
---- ----------------
1999......................................... 103.429
2000......................................... 102.571
2001......................................... 101.714
2002......................................... 100.857
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
<PAGE>
-22-
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled at any time before the close of business on
October 15, 2003 (or, in case this Security or a portion hereof is called for
redemption or the Holder hereof has exercised his right to require the Company
to repurchase this Security or a portion hereof, then in respect of this
Security or such portion hereof, as the case may be, until and including, but
(unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be) not after, the close of business on the
Redemption Date or the Repurchase Date, as the case may be) to convert this
Security (or any portion of the principal amount hereof that is an integral
multiple of $1,000), into fully paid and nonassessable shares (calculated as to
each conversion to the nearest 1/100 of a share) of Common Stock of the Company
at the rate of 75.2941 shares of Common Stock for each $1,000 principal amount
of Security (or at the current adjusted rate if an adjustment has been made as
provided in the Indenture) by surrender of this Security, duly endorsed or
assigned to the Company or in blank to the Company at the Corporate Trust Office
of the Trustee, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, at any other office or agency of the Company
maintained for such purpose and at the office or agency of any additional
conversion agent appointed by the Company, accompanied by written notice to the
Company that the Holder hereof elects to convert this Security (or if less than
the entire principal amount hereof is to be converted, specifying the portion
hereof to be converted) and, in case such surrender shall be made during the
period from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date,
also accompanied by payment in New York Clearing House (next day) funds (or
other funds acceptable to the Company) of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of this Security
then being converted, provided that, if this Security or any portion hereof has
been called for redemption on a Redemption Date or is repurchasable on a
Repurchase Date occurring, in either case, during the period from the close of
business on any Regular Record Date next preceding any Interest Payment Date to
the opening of business on the succeeding Interest Payment Date and is
surrendered for conversion during such period, then the Holder of this Security
who converts this Security or any portion hereof during such period will be
entitled to receive the interest accruing on the principal amount of this
Security so called for redemption or repurchasable and then being converted from
the Interest Payment Date next preceding the date of such conversion to such
succeeding Interest Payment Date and shall not be required to pay such interest
upon surrender of this Security for conversion. Subject to the provisions of the
preceding sentence and, in the case of a conversion after the close of business
on the Regular Record Date next preceding any Interest Payment Date and before
the opening of business on such Interest Payment Date, to the right of the
Holder of this Security (or any Predecessor Security) of record as of such
Regular Record Date to receive the related installment of interest to the extent
and under the circumstances provided in the Indenture, no payment or adjustment
is to be made on conversion for interest accrued hereon from the Interest
<PAGE>
-23-
Payment Date next preceding the day of conversion, or for dividends on the
Common Stock issued on conversion hereof. Interest payable on any Interest
Payment Date in respect of this Security or any portion hereof surrendered for
conversion on or after such Interest Payment Date shall be paid to the Holder of
such Security as of the Regular Record Date next preceding such Interest Payment
Date, notwithstanding the exercise of the right of conversion. No fractions of
shares or scrip representing fractions of shares will be issued on conversion,
but instead of any fractional interest, the Company shall pay a cash adjustment
as provided in the Indenture or, alternatively, the Company shall round up to
the next higher whole share.
The Conversion Rate is subject to adjustment as provided in the Indenture.
In addition, the Indenture provides that, in the event that the Company decides
to distribute to all holders of the Common Stock common stock ("Other Stock") of
another corporation and actually makes such distribution, then in lieu of making
the adjustment to the Conversion Rate required by the Indenture in respect of
such distribution, the Company may, at its option if certain requirements set
forth in the Indenture are satisfied, deliver shares of Other Stock, cash or
both to the Holders upon conversion of their Securities thereafter, to the
extent and subject to adjustment upon certain events affecting the Other Stock
as provided in the Indenture. The Indenture also provides that in case of
certain consolidations or mergers to which the Company is a party or the
conveyance, transfer, sale or lease of all or substantially all of the
properties and assets of the Company, the Indenture shall be amended, without
the consent of any Holders of Securities, so that this Security, if then
Outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, transfer, sale or lease (including any Common Stock retainable) by a
holder of the number of shares of Common Stock of the Company into which this
Security could have been converted immediately prior to such consolidation,
merger, conveyance, transfer, sale or lease (assuming such holder of Common
Stock failed to exercise any rights of election and received per share the kind
and amount received per share by a plurality of non-electing Shares and further
assuming, if such consolidation, merger, conveyance, transfer, sale or lease is
prior to the first date on which this Security may be converted as provided
above, that this Security was convertible immediately prior to the time of such
occurrence at the initial Conversion Rate specified above as adjusted from the
first original issue date of the Securities to such time as provided in the
Indenture). No adjustment in the Conversion Rate will be made until such
adjustment would require an increase or decrease of at least one percent of such
rate, provided that any adjustment that would otherwise be made will be carried
forward and taken into account in the computation of any subsequent adjustment.
If this Security is a Registrable Security, then the Holder of this
Security [if this Security is a Global Security, then insert- (and any Person
that has a beneficial interest in this Security)] and the Common Stock issuable
upon conversion hereof is
<PAGE>
-24-
entitled to the benefits of a Registration Rights Agreement, dated as of October
15, 1996 and as the same may be amended from time to time (the "Registration
Rights Agreement"), executed by the Company. Pursuant to the Registration Rights
Agreement, the Company has agreed for the benefit of the Holders from time to
time of Registrable Securities, at the Company's expense, (a) to file within 90
days after the first date of original issuance of the Securities, a Shelf
Registration Statement with the Commission with respect to resales of the
Registrable Securities, (b) to use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective by the Commission as
promptly as practicable but within 180 days after the first date of original
issuance of the Securities, and (c) to use its reasonable best efforts to
maintain such Shelf Registration Statement continuously effective under the
Securities Act for a period of three years or such earlier time as is specified
in the Registration Rights Agreement. Notwithstanding the foregoing, the Company
is entitled to suspend the use of the prospectus that is part of the Shelf
Registration Statement for resales of Registrable Securities during certain
periods as provided in the Registration Rights Agreement.
If (i) on or prior to 90 days following the first date of original
issuance of the Securities, a Shelf Registration Statement has not been filed
with the Commission, or (ii) on or prior to the 180th day following the first
date of original issuance of the Securities, such Shelf Registration Statement
is not declared effective (each, a "Registration Default"), additional interest
will accrue on the principal amount of this Security from and including the day
following the first day on which such Registration Default occurs to but
excluding the first day on which such Registration Default has been cured. In
addition, in the event that the Shelf Registration Statement becomes effective
and thereafter either (x) the Shelf Registration Statement ceases to be
effective during the Effectiveness Period or (y) use of the prospectus that is
part of the Shelf Registration Statement for resales of Registrable Securities
is suspended or prohibited (whether as permitted by the Registration Rights
Agreement or otherwise), and the total number of days (whether or not
consecutive) in which any such cessation, suspension or prohibition is in effect
equals or exceeds 61 during any 12-month period (each, a "Post Effective
Registration Default"), then additional interest will accrue on the principal
amount of this Security from and including such 61st day to but excluding the
first day thereafter on which the Shelf Registration Statement is effective and
such use of the prospectus is not suspended or prohibited (provided that any day
on which any such cessation, suspension or prohibition is in effect and that
occurs prior to such first day shall, if within the applicable 12-month period,
be taken into account in determining whether additional interest shall begin to
accrue again after such first day). Such additional interest will be paid
semi-annually in arrears, with the first semi-annual payment due on the first
Interest Payment Date in respect of the Securities following the date on which
such additional interest begins to accrue. Upon any Registration Default,
additional interest will accrue until such Registration Default is cured as
provided above at a rate per annum equal to one-quarter of one percent (0.25%)
(in
<PAGE>
-25-
addition to the interest rate of 6% per annum borne by this Security) to and
including the 90th day following such Registration Default and at a rate per
annum equal to one-half of one percent (0.50%) (in addition to such rate of 6%
per annum) from and including the 91st day following such Registration Default
until such Registration Default is cured as provided above. Upon any
Post-Effective Registration Default, additional interest shall accrue until
cured at a rate per annum equal to one-half of one percent (0.50%) (in addition
to such rate of 6% per annum).
Whenever in this Security there is a reference, in any context, to
interest on, or in respect of, any Security such mention shall be deemed to
include mention of additional interest accrued or payable as described in the
preceding paragraph to the extent that, in such context, additional interest is,
was or would be accrued or payable in respect of such Security and express I
mention of additional interest in any provisions of this Security shall not be
construed as excluding additional interest in those provisions of this Security
where such express mention is not made.
If this Security is a Registrable Security and the Holder of this Security
[if this Security is a Global Security, then insert -- (and any Person that has
a beneficial interest in this Security)] elects to sell this Security pursuant
to the Shelf Registration Statement then, by such election, such Holder of this
Security agrees to be bound by the terms of the Registration Rights Agreement
relating to the Registrable Securities which are the subject of such election.
If a Change in Control occurs, the Holder of this Security, at the
Holder's option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is an integral multiple of $1,000) at a
Repurchase Price equal to 100% of the principal amount thereof plus interest
accrued to the Repurchase Date. At the option of the Company, the Repurchase
Price may be paid in cash or, subject to the conditions provided in the
Indenture, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price. For purposes of this paragraph, the fair market
value of shares of Common Stock shall be determined by the Company and shall be
equal to 95% of the average of the Closing Price for the five consecutive
Trading Days ending on and including the third Trading Day immediately preceding
the Repurchase Date. Whenever in this Security there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the Repurchase Price payable in respect of
such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Security shall not be construed as excluding the Repurchase
Price so payable in those provisions of this Security when such express mention
is not made; provided, however, that for the purposes of the second succeeding
paragraph (regarding subordination), such reference shall be deemed to include
reference to the Repurchase Price only if the Repurchase Price is payable in
cash.
<PAGE>
-26-
[If not a Global Security insert - In the event of redemption, repurchase
or conversion of this Security in part only, a new Security or Securities for
the unredeemed, unrepurchased or unconverted portion hereof will be issued in
the name of the Holder hereof.]
[If a Global Security insert - In the event of a deposit or withdrawal of
an interest in this Security (including upon an exchange, transfer, redemption,
repurchase or conversion of this Security in part only) effected in accordance
with the Applicable Procedures, the Security Registrar, upon receipt of notice
of such event from the Depositary's custodian for this Security, shall make an
adjustment on its records to reflect an increase or decrease of the Outstanding
principal amount of this Security resulting from such deposit or withdrawal, as
the case may be.]
The indebtedness evidenced by this Security is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Debt of the Company, and this Security
is issued subject to such provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes.
If an Event of Default shall occur and be continuing, the principal of all
the Securities 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 under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time Outstanding, on
behalf of the Holders of all the Securities, 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 Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less
<PAGE>
-27-
than 25% in principal amount of the Securities at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity
and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities at the time Outstanding a direction inconsistent
with such request and shall have failed to institute any such proceeding for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to certain suits described in the Indenture, including any suit
instituted by the Holder of this Security for the enforcement of any payment of
principal hereof or any premium, if any, or interest hereon on or after the
respective due dates expressed herein or for the enforcement of the right to
convert this Security as provided in the Indenture.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on (including Liquidated Damages) this Security at the times, places
and rate, and in the coin or currency, herein prescribed or to convert this
Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of Securities is registrable on the Security Register
upon surrender of a Security for registration of transfer at the office or
agency of the Company in the Borough of Manhattan, The City of New York, and at
such other offices or agencies as the Company may designate, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities 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 recover any
tax or other governmental charge payable in connection therewith.
Prior to due presentation 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 thereof for all
purposes, whether or not such Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
<PAGE>
-28-
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York, United States of America.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.1 of the Indenture, the undersigned hereby
elects to have all or a portion of this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company to pay
[choose one] (a) it or (b) Name: __________________; address:
________________; Social Security or Other Taxpayer Identification Number, if
any: ____________, an amount in cash or, at the Company's election, Common
Stock valued as set forth in the Indenture, equal to 100% of the principal
amount to be repurchased (as set forth below), plus interest accrued to the
Repurchase Date, as provided in the Indenture.
D a t e d :
- -------------------
- -------------------
Signature
Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if cash or Common Stock is to be delivered other than
to, and in the name of, the registered Holder.
- -----------------------
<PAGE>
-29-
Signature Guarantee
Principal amount to be repurchased
(an integral multiple of $1,000): _______________________
Remaining principal amount following such repurchase
(not less than $1,000): ___________________
NOTICE: The signature to the foregoing Election must correspond to the name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
<PAGE>
-30-
SECTION 2.3. Form of Trustee's Certificate of Authentication.
----------- -----------------------------------------------
This is one of the Securities referred to in the within-mentioned
Indenture.
STATE STREET BANK
AND TRUST COMPANY,
as
Trustee
By:
------------------------
Authorized Signatory
SECTION 2.4. Form of Conversion Notice.
----------- -------------------------
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably exercises the
option to convert this Security, or any portion of the principal amount hereof
(which is an integral multiple of $1,000) below designated, into shares of
Common Stock (or Other Stock or cash) in accordance with the terms of the
Indenture referred to in this Security, and directs that such shares, together
with a check in payment for any fractional share (and any such other cash) and
any Securities representing any unconverted principal amount hereof, be
delivered to and be registered in the name of the undersigned unless a different
name has been indicated below. If shares of Common Stock (or Other Stock) or
Securities are to be registered in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated:
---------------
- ---------------------
Signature
If shares or Securities are to be
registered in the name of a Person
other than the Holder, please print If only a portion of the
such Person's name and address: Securities is to be converted,
please indicate:
1. Principal amount to be converted:
$------------
<PAGE>
-31-
- ------------------------
Name 2. Principal amount and denomination
of Securities representing unconverted
principal amount to be issued:
- ------------------------
Address
Amount:$_______
Denominations: $_______
(any integral multiple of $1,000)
- ------------------------
Social Security or other Taxpayer
Identification Number, if any
Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if cash or Common Stock is to be delivered other than
to, and in the name of, the registered Holder.
[Signature Guarantee]
ARTICLE THREE.
THE SECURITIES
SECTION 3.1. Title and Terms.
----------- ---------------
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to $69,000,000, except for
Securities authenticated and delivered in exchange for, or in lieu of, other
Securities pursuant to Section 3.4, 3.5, 3.6, 3.7, 9.6, 11.8, 12.2 or 14.3.
The Securities shall be known and designated as the "6% Convertible
Subordinated Notes due October 15, 2003" of the Company. Their Stated Maturity
shall be October 15, 2003, and they shall bear interest at the rate of 6% per
annum, from October 15, 1996 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, as the case may be, payable
semi-
<PAGE>
-32-
annually on April 15 and October 15, commencing April 15, 1997, until the
principal thereof is paid or made available for payment.
The principal of, premium, if any, and interest on the Securities shall be
payable as provided in the forms of Securities set forth in Section 2.2.
The Securities are entitled to the benefits of a Registration Rights
Agreement as provided by Section 10.11. The Securities are entitled to the
payment of additional interest as provided by Section 10.11.
The Securities shall be redeemable, as provided in Article Eleven.
The Securities shall be convertible as provided in Article Twelve.
The Securities shall be subordinated in right of payment to Senior Debt as
provided in Article Thirteen.
The Securities shall be subject to repurchase by the Company at the option
of the Holders as provided in Article Fourteen.
SECTION 3.2. Denominations.
----------- -------------
The Securities shall be issuable only in registered form, without coupons,
in denominations of $1,000 and any integral multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
----------- ----------------------------------------------
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its
President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Clerk or one of its Assistant Clerks. Any such signature
may be manual or facsimile.
Securities bearing the manual or facsimile signature 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.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities 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 such Company
Order shall authenticate and make available for delivery such Securities as in
this Indenture provided and not otherwise.
<PAGE>
-33-
Each Security shall be dated the date of its authentication.
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.
SECTION 3.4. Temporary Securities.
----------- --------------------
Pending the preparation of definitive Securities, the Company may 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.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.2, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.
<PAGE>
-34-
SECTION 3.5. Global Securities, Non-Global Securities.
----------- ----------------------------------------
(a) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act,
and in either case the Company thereupon fails to appoint a successor
Depositary, (ii) there shall have occurred and be continuing an Event of Default
with respect to such Global Security or (iii) the Company executes and delivers
to the Trustee a Company Order stating that all Global Securities shall be
exchanged in whole for Securities that are not Global Securities (in which case
such exchange shall be effected by the Trustee).
(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Trustee, as Security Registrar, for exchange or cancellation
as provided in this Article Three. If any Global Security is to be exchanged for
other Securities or cancelled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, in each
case, as provided in Section 3.6, then either (i) such Global Security shall be
so surrendered for exchange or cancellation as provided in this Article Three or
(ii) the principal amount thereof shall be reduced or increased by an amount
equal to the portion thereof to be so exchanged or cancelled, or equal to the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Trustee, as Security Registrar, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Security, the Trustee shall,
subject to Section 3.6(c) and as otherwise provided in this Article Three,
authenticate and deliver any Securities issuable in exchange for such Global
Security (or any portion thereof) to or upon the order of, and registered in
such names as may be directed by, the Depositary or its authorized
representative. Upon the request of the Trustee in connection with the
occurrence of any of the events specified in the preceding paragraph, the
Company shall promptly make available to the Trustee a reasonable supply of
Securities that are not in the form of Global Securities. The Trustee shall be
entitled to rely upon any order, direction or request of the Depositary
<PAGE>
-35-
or its authorized representative which is given or made pursuant to this Article
Three if such order, direction or request is given or made in accordance with
the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Securities, and owners of beneficial interests in a Global
Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members and
such owners of beneficial interests in a Global Security will not be considered
the owners or holders of such Global Security for any purpose of this Indenture
or the Securities.
SECTION 3.6. Registration, Registration of Transfer
and Exchange; Restrictions on Transfer.
--------------------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 10.2 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers and exchanges of Securities as herein provided.
Subject to the other provisions of this Indenture regarding restrictions
on transfer, upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 10.2 for such
purpose, 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 any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder, and subject to the other provisions of this
Section 3.6, Securities may be exchanged for other Securities of any authorized
denomination and of a like aggregate principal amount, upon surrender of the
<PAGE>
-36-
Securities to be exchanged at any 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.
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.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
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, 3.5, 9.6, 11.8, 12.2 or 14.3 not involving
any transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange any Security during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.4 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.
(b) Certain Transfers and Exchanges. Notwithstanding any other provision
of this Indenture or the Securities, transfers and exchanges of Securities and
beneficial interests in a Global Security of the kinds specified in this Section
3.6(b) shall be made only in accordance with this Section 3.6(b).
(i) Restricted Global Security to Regulation S Global
Security. If the owner of a beneficial interest in the Restricted
Global Security wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Regulation S Global Security, such transfer may be
effected only in accordance with the provisions of this Clause
(b)(i) and Clause (b)(vii) below and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of
(A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the
Regulation S Global Security in a specified principal amount be
<PAGE>
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credited to a specified Agent Member's account and that a beneficial
interest in the Restricted Global Security in an equal principal
amount be debited from another specified Agent Member's account and
(B) a Regulation S Certificate, satisfactory to the Trustee and duly
executed by the owner of such beneficial interest in the Restricted
Global Security or his attorney duly authorized in writing, then the
Trustee, as Security Registrar but subject to Clause (b)(vii) below,
shall reduce the principal amount of the Restricted Global Security
and increase the principal amount of the Regulation S Global
Security by such specified principal amount as provided in Section
3.5(c).
(ii) Regulation S Global Security to Restricted Global
Security. If the owner of a beneficial interest in the Regulation S
Global Security wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Security, such transfer may be
effected only in accordance with this Clause (b)(ii) and subject to
the Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the
Restricted Global Security in a specified principal amount be
credited to a specified Agent Member's account and that a beneficial
interest in the Regulation S Global Security in an equal principal
amount be debited from another specified Agent Member's account and
(B) if such transfer is to occur during the Restricted Period, a
Restricted Securities Certificate, satisfactory to the Trustee and
duly executed by the owner of such beneficial interest in the
Regulation S Global Security or his attorney duly authorized in
writing, then the Trustee, as Security Registrar, shall reduce the
principal amount of the Regulation S Global Security and increase
the principal amount of the Restricted Global Security by such
specified principal amount as provided in Section 3.5(c).
(iii) Restricted Non-Global Security to Restricted Global
Security or Regulation S Global Security. If the Holder of a
Restricted Security (other than a Global Security) wishes at any
time to transfer all or any portion of such Restricted Security to a
Person who wishes to take delivery thereof in the form of a
beneficial interest in the Restricted Global Security or the
Regulation S Global Security, such transfer may be effected only in
accordance with the provisions of this Clause (b)(iii) and Clause
(b)(vii) below and subject to the Applicable Procedures. Upon
receipt by the Trustee, as Security Registrar, of (A) such
Restricted Security as provided in Section 3.6(a) and instructions
satisfactory to the Trustee directing that a beneficial interest in
the Restricted Global Security or Regulation S Global
<PAGE>
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Security in a specified principal amount not greater than the
principal amount of such Security be credited to a specified Agent
Member's account and (B) a Restricted Securities Certificate, if the
specified account is to be credited with a beneficial interest in
the Restricted Global Security, or a Regulation S Certificate, if
the specified account is to be credited with a beneficial interest
in the Regulation S Global Security, in either case satisfactory to
the Trustee and duly executed by such Holder or his attorney duly
authorized in writing, then the Trustee, as Security Registrar but
subject to Clause (b)(vii) below, shall cancel such Restricted
Security (and issue a new Restricted Security in respect of any
untransferred. portion thereof) as provided in Section 3.6(a) and
increase the principal amount of the Restricted Global Security or
the Regulation S Global Security, as the case may be, by the
specified principal amount as provided in Section 3.5(c).
(iv) Regulation S Non-Global Security to Restricted Global
Security or Regulation S Global Security. If the Holder of a
Regulation S Security (other than a Global Security) wishes at any
time to transfer all or any portion of such Regulation S Security to
a Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Security or the Regulation S
Global Security, such transfer may be effected only in accordance
with this Clause (b)(iv) and Clause (b)(vii) below and subject to
the Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) such Regulation S Security as provided in Section
3.6(a) and instructions satisfactory to the Trustee directing that a
beneficial interest in the Restricted Global Security or Regulation
S Global Security in a specified principal amount not greater than
the principal amount of such Security be credited to a specified
Agent Member's account and (B) if the transfer is to occur during
the Restricted Period and the specified account is to be credited
with a beneficial interest in the Restricted Global Security, a
Restricted Securities Certificate satisfactory to the Trustee and
duly executed by such Holder or his attorney duly authorized in
writing, then the Trustee, as Security Registrar but subject to
Clause (b)(vii) below, shall cancel such Regulation S Security (and
issue a new Regulation S Security in respect of any untransferred
portion thereof) as provided in Section 3.6(a) and increase the
principal amount of the Restricted Global Security or the Regulation
S Global Security, as the case may be, by the specified principal
amount as provided in Section 3.5(c).
(v) Non-Global Security to Non-Global Security. A Security
that is not a Global Security may be transferred, in whole or in
part, to a Person who takes delivery in the form of another Security
<PAGE>
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that is not a Global Security as provided in Section 3.6(a),
provided that, if the Security to be transferred in whole or in part
is a Restricted Security, or is a Regulation S Security and the
transfer is to occur during the Restricted Period, then the Trustee
shall have received (A) a Restricted Securities Certificate,
satisfactory to the Trustee and duly executed by the transferor
Holder or his attorney duly authorized in writing, in which case the
transferee Holder shall take delivery in the form of a Restricted
Security, or (B) a Regulation S Certificate, satisfactory to the
Trustee and duly executed by the transferor Holder or his attorney
duly authorized in writing, in which case the transferee Holder
shall take delivery in the form of a Regulation S Security (subject
in every case to Section 3.6(c)).
(vi) Exchanges between Global Security and Non-Global
Security. A beneficial interest in a Global Security may be
exchanged for a Security that is not a Global Security as provided
in Section 3.5, provided that, if such interest is a beneficial
interest in the Restricted Global Security, or if such interest is a
beneficial interest in the Regulation S Global Security and such
exchange is to occur during the Restricted Period, then such
interest shall be exchanged for a Restricted Security (subject in
each case to Section 3.6(c)). A Security that is not a Global
Security may be exchanged for a beneficial interest in a Global
Security only if (A) such exchange occurs in connection with a
transfer effected in accordance with Clause (b)(iii) or (iv) above
or (B) such Security is a Regulation S Security and such exchange
occurs after the Restricted Period.
(vii) Regulation S Global Security to be Held Through
Euroclear or Cedel during Restricted Period. The Company shall use
its best efforts to cause the Depositary to ensure that, until the
expiration of the Restricted Period, beneficial interests in the
Regulation S Global Security may be held only in or through accounts
maintained at the Depositary by Euroclear or Cedel (or by Agent
Members acting for the account thereof), and no person shall be
entitled to effect any transfer or exchange that would result in any
such interest being held otherwise than in or through such an
account; provided that this Clause (b)(vii) shall not prohibit any
transfer or exchange of such an interest in accordance with Clause
(b)(ii) or (vi) above.
(c) Securities Act Legends. Rule 144A Securities, Other Securities and
their respective Successor Securities shall bear a Restricted Securities Legend,
and the Regulation S Securities and their Successor Securities shall bear a
Regulation S Legend, subject to the following:
<PAGE>
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(i) subject to the following Clauses of this Section 3.6(c), a
Security or any portion thereof which is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear
the Securities Act Legend borne by such Global Security while
represented thereby;
(ii) subject to the following Clauses of this Section 3.6(c),
a new Security which is not a Global Security and is issued in
exchange for another Security (including a Global Security) or any
portion thereof, upon transfer or otherwise, shall bear the
Securities Act Legend borne by such other Security, provided that,
if such new Security is required pursuant to Section 3.6(b)(v) or
(vi) to be issued in the form of a Restricted Security, it shall
bear a Restricted Securities Legend and, if such new Security is so
required to be issued in the form of a Regulation S Security, it
shall bear a Regulation S Legend;
(iii) Any Securities which are sold or otherwise disposed of
pursuant to an effective registration statement under the Securities
Act (including the Shelf Registration Statement), together with
their Successor Securities shall not bear a Securities Act Legend;
the Company shall inform the Trustee in writing of the effective
date of any such registration statement registering the Securities
under the Securities Act and shall notify the Trustee at any time
when prospectuses may not be delivered with respect to Securities to
be sold pursuant to such registration statement. The Trustee shall
not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the aforementioned registration
statement;
(iv) at any time after the Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities
Act, a new Security which does not bear a Securities Act Legend may
be issued in exchange for or in lieu of a Security (other than a
Global Security) or any portion thereof which bears such a legend if
the Trustee has received an Unrestricted Securities Certificate,
satisfactory to the Trustee and duly executed by the Holder of such
legended Security or his attorney duly authorized in writing, and
after such date and receipt of such certificate, the Trustee shall
authenticate and deliver such a new Security in exchange for or in
lieu of such other Security as provided in this Article Three;
(v) a new Security which does not bear a Securities Act Legend
may be issued in exchange for or in lieu of a Security (other than a
Global Security) or any portion thereof which bears such a
<PAGE>
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legend if, in the Company's judgment, placing such a legend upon
such new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and deliver such a
new Security as provided in this Article Three; and (vi)
notwithstanding the foregoing provisions of this Section 3.6(c), a
Successor Security of a Security that does not bear a particular
form of Securities Act Legend shall not bear such form of legend
unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the direction of the
Company, shall authenticate and deliver a new Security bearing a
Restricted Securities Legend in exchange for such Successor Security
as provided in this Article Three.
SECTION 3.7. Mutilated, Destroyed, Lost or Stolen Securities.
-----------------------------------------------
If any mutilated Security is surrendered to the Trustee or to a Transfer
Agent, the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
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 satisfactory to the Company or the Trustee
to save each of them and any agent of either of them harmless, then, in the
absence of actual notice to the Company or the Trustee that such Security has
been acquired by a bona fide purchaser, the Company shall execute and the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
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, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security.
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.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
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 duly issued hereunder.
<PAGE>
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies of any Holder with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.8. Payment of Interest; Interest Rights Preserved.
----------- ----------------------------------------------
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 Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security, the date of the proposed payment and the Special Record
Date, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause provided.
The Special Record Date for the payment of such Defaulted Interest shall
be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities at
such Holder's address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following Clause (2).
<PAGE>
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(2) The Company may 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 Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of 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.
Interest on any Security which is converted in accordance with Section
12.2 during a Record Date Period shall be payable in accordance with the
provisions of Section 12.2.
SECTION 3.9. 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 3.8) 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 agent of the Company or the Trustee shall be affected by
notice to the contrary.
<PAGE>
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SECTION 3.10. Cancellation.
------------ ------------
All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. 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.
SECTION 3.11. Computation of Interest.
------------ -----------------------
Interest on the Securities (including any additional interest) shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.12. CUSIP and ISIN Numbers.
------------ ----------------------
The Company in issuing Securities may use "CUSIP" and "ISIN" numbers (if
then generally in use) in addition to serial numbers; if so, the Trustee shall
use such "CUSIP" and "ISIN" numbers in addition to serial numbers in notices of
redemption and repurchase as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
CUSIP and ISIN numbers either as printed on the Securities or as contained in
any notice of a redemption or repurchase and that reliance may be placed only on
the serial or other identification numbers printed on the Securities, and any
such redemption or repurchase shall not be affected by any defect in or omission
of such CUSIP and ISIN numbers.
ARTICLE FOUR.
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
----------- ---------------------------------------
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
<PAGE>
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(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.7 and (ii) Securities
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) 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 (i), (ii) or (iii) 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;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, 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 (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive,
<PAGE>
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SECTION 4.2. Application of Trust Money.
----------- --------------------------
Subject to the provisions of the last paragraph of Section 10.3, all money
deposited with the 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
(including the Company acting as its own 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.
All moneys deposited with the Trustee pursuant to Section 4.1 (and held by
it or any Paying Agent) for the payment of Securities subsequently converted
shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default.
----------- -----------------
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Thirteen or be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of the principal of or premium, if
any, on any Security at its Maturity; or
(2) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of
30 days; or
(3) failure by the Company to give the Company Notice in
accordance with Section 14.3. or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in the performance or breach of which is specifically
dealt with elsewhere in this Section), and continuance of such default or
breach for a period of 60 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 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; or
<PAGE>
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(5) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company, or under any agreement,
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, with a principal amount then outstanding in
excess of $5,000,000, whether such indebtedness now exists or shall
hereafter be created, which default shall constitute a failure to pay the
principal of such indebtedness (in whole or in any part greater than
$5,000,000) when due and payable or shall have resulted in such
indebtedness (in whole or in any part greater than $5,000,000) becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having
been discharged, or such acceleration having been rescinded or annulled,
within a period of 30 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 aggregate
principal amount of the Outstanding Securities a written notice specifying
such default and requiring the Company to cause such indebtedness to be
discharged or cause such acceleration to be rescinded or annulled and
stating that such notice is a "Notice of Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises of (A)
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 or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as property
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable Federal
or State law, or 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 60 onsecutive days; or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of 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 or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or similar relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
<PAGE>
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liquidator, assignee, trustee, sequestrator or other similar official of
the Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by it
in writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company in furtherance of any
such action.
SECTION 5.2. Acceleration of Maturity: Rescission and Annulment.
----------- --------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Section 5.1(6) or 5.1(7) occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities may declare the principal of all the Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
and all accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in Section 5.1(6) or 5.1(7) occurs and is continuing,
the principal of, and accrued interest on, all the Securities shall ipso facto
become immediately due and payable without any declaration or other Act of the
Holders or any act on the part of the Trustee.
At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate borne by the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided therefor in the
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
<PAGE>
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(2) all Events of Default, other than the nonpayment of the
principal of, and any premium and interest on, Securities which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 5.13,
No rescission or annulment referred to above shall affect any subsequent
default or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
-------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when it becomes due and payable and such default continues for a period of
30 days, or
(2) default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,
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 interest and interest on any overdue principal and
premium, if any, and on any overdue interest, at the rate provided therefor in
the 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.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities 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.
----------- --------------------------------
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any
<PAGE>
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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, disbursement and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.7.
No provision of this Indenture 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 of a Security in any such proceeding;
provided, however, that the Trustee may, on behalf of such Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other such committee.
<PAGE>
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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 judgment has been recovered.
SECTION 5.6. Application of Money Collected.
----------- ------------------------------
Subject to Article Thirteen, 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, premium, if any, or interest, upon presentation of the Securities,
or both, as the case may be, and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.7;
and
SECOND: To the payment of the amounts then due and unpaid for principal
of, premium, if any, or 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, premium, if any, and interest, respectively.
SECTION 5.7. Limitation on Suits.
----------- -------------------
No Holder of any Security 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:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
<PAGE>
-52-
(3) 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;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders 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
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert.
----------------------------------------------------
Notwithstanding any other provision in this Indenture, but subject to the
provisions of Article Thirteen, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of the principal of,
premium, if any, and (subject to Section 3.8) interest on such Security or
payment on the respective Stated Maturities expressed in such Security (or, in
the case of redemption or repurchase, on the Redemption Date or Repurchase Date,
as the case may be), and to convert such Security in accordance with Article
Twelve, and to institute suit for the enforcement of any such payment and right
to convert, 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.
<PAGE>
-53-
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
3.7, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders of Securities 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 Security 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 any
acquiescence therein. Every right and remedy given by this Article Five 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 of Securities.
------------ --------------------------------
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) 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.
------------ -----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of, premium, if any, or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
<PAGE>
-54-
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.
------------ ---------------------
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 its as Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the extent provided in the
Trust Indenture Act; provided, that neither this Section nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company or any Holder, or
group of Holders, holding in the aggregate at least 10% in principal amount of
the Outstanding Securities or in any suit instituted by any Holder for the
enforcement of principal of (and premium, if any) or interest on any Security on
or after the respective maturities or Stated Maturities expressed in such
Security or for the enforcement of the right to convert any Security in
accordance with Article twelve.
SECTION 5.15. Waiver of Stay, Usury 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, usury or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no-provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably
<PAGE>
-55-
assured to it. 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.
----------- ------------------
The Trustee shall give the Holders notice of any default hereunder as and
to the extent provided by the Trust Indenture Act; provided, however, that in
the case of any default of the character specified in Section 5.1(4), 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.
SECTION 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 may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' 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,
<PAGE>
-56-
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; and
(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.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
----------- ------------------------------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
----------- -------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar 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, Security
Registrar or such other 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.
<PAGE>
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SECTION 6.7. Compensation and Reimbursement.
----------- ------------------------------
The Company agrees
(1) 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);
(2) 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; and
(3) 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 this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
SECTION 6.8. Disqualification; Conflicting Interests.
----------- ---------------------------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.9. Corporate Trustee Required: Eligibility.
----------- ---------------------------------------
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If such Person 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 Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
<PAGE>
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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 under Section 6.11.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If an instrument of acceptance by a successor Trustee 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.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) 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
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder who has been a 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 and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of
<PAGE>
-59-
such appointment, become the successor Trustee and supersede the successor
Trustee appointed by the Company. If no successor Trustee shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
hereinafter provided, any Holder who has been a 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 appointment of a
successor Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 1.6. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
------------ --------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, 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. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. 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 (including the trust created by this Indenture), 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 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
<PAGE>
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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.
------------ -------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
------------ -----------------------------------
The Trustee may appoint an Authenticating Agent or Agents which shall be
authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer, partial
conversion or partial redemption or pursuant to Section 3.7, 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. Wherever 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 on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee 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 $50,000,000 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.
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.
<PAGE>
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, 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 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 the 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.
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, subject to the provisions
of Section 6.7.
If an appointment is made pursuant to this Section, the Securities 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 described in the within-mentioned Indenture.
State Street Bank and Trust Company,
As Trustee
By
---------------------------------------
As Authenticating Agent
-----------------------
By
---------------------------------------
Authorized Signatory
--------------------
<PAGE>
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
----------- ---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(b) 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;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
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 Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(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 any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 7.3. Reports by Trustee.
----------- ------------------
(a)___The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
<PAGE>
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(b)___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 the
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when the Securities are listed on any stock exchange.
SECTION 7.4. Reports by Company.
----------- ------------------
The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.
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 into any other Person or,
directly or indirectly, convey, transfer, sell or lease all or substantially all
of its properties and assets to any Person, and the Company shall not permit any
Person to consolidate with or merge into the Company or, directly or indirectly,
convey, transfer, sell or lease all or substantially all of its properties and
assets to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer, sell or lease all or substantially all of its
properties and assets to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance, transfer or sale, or which leases, all or
substantially all the properties and assets of the Company shall be a
corporation, limited liability company, partnership or trust, shall be
organized and validly 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 or observance of every covenant of this
Indenture on the part of the Company to be performed or observed and shall
have provided for conversion rights in accordance with Article Twelve;
<PAGE>
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(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer, sale or lease and, if a
supplemental indenture is required in connection with such transaction,
such 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 Substituted.
----------- ---------------------
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer, sale or lease of all or
substantially all of the properties and assets of the Company in accordance with
Section 8. 1, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer, sale or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders of
Securities.
-----------------------------------------------------
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:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants and obligations of
the Company herein and in the Securities as permitted by this Indenture;
or
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(2) to add to the covenants of the Company for the benefit of the
Holders of Securities, or to surrender any right or power herein
conferred upon the Company; or
(3) to secure the Securities; or
(4) to make provision with respect to the conversion rights of
Holders of Securities pursuant to Section 12.11; or
(5) to make any changes or modifications to this Indenture necessary
in connection with the registration of any Registrable Securities under
the Securities Act as contemplated by Section 10.11, provided such action
pursuant to this clause (5) shall not adversely affect the interests of
the Holders of Securities; or
(6) to comply with the requirements of the Trust Indenture Act or
the rules and regulations of the Commission thereunder in order to effect
or maintain the qualification of this Indenture under the Trust Indenture
Act, as contemplated by this Indenture or otherwise; or
(7) 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 which shall not be inconsistent with the provisions
of this Indenture, provided that such action pursuant to this Clause (7)
shall not adversely affect the interests of the Holders of Securities.
SECTION 9.2. Supplemental Indentures with Consent of Holders of
Securities.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, 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 under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent or affirmative vote of the
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security or reduce the principal amount or
the rate of interest payable thereon or any premium payable upon
redemption or mandatory repurchase thereof, or change the coin or currency
in which any Security or the interest or any premium thereon or any other
amount in respect
<PAGE>
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thereof is payable, modify the provisions of Article Fourteen in a manner
adverse to the Holders or impair the right to institute suit for the
enforcement of any payment in respect of any Security on or after the
Stated Maturity thereof (or, in the case of redemption or any repurchase,
on or after the Redemption Date or Repurchase Date, as the case may be) or
the right to convert any Security or, except as permitted by Section
12.11, adversely affect the right to convert any Security as provided in
Article Twelve, or modify the provisions of this Indenture with respect to
the subordination of the Securities in a manner adverse to the Holders of
Securities, or
(2) reduce the percentage in principal amount of the Outstanding
Securities the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture,
or
(3) modify the obligation of the Company to maintain an office or
agency in the Borough of Manhattan, The City of New York pursuant to
Section 10.2, or
(4) modify any of the provisions of Section 10.9 or 10.10, or
(5) modify any of the provisions of this Section or Section 5.13 or
10.12, except to increase any percentage contained herein or therein 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.
It shall not be necessary for any Act of Holders of Securities 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 stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
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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.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
----------- --------------------------------------------------
Securities 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 so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
------------ ------------------------------------------
The Company will duly and punctually pay the principal of (and premium, if
any) and interest on the Securities 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 an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or
exchange, where Securities may be surrendered for conversion and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. 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, and
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the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders. notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside the Borough of Manhattan, The City of New York) where
the Securities may be presented or surrendered for any or all such purposes and
may from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 10.3. Money for Security Payments to Be Held in Trust.
------------ -----------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of (and premium, if any) or interest on
any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of (and premium, if any) or interest on any
Securities, deposit with a Paying Agent a sum sufficient to pay such amount,
such sum to be held as provided by the Trust Indenture Act, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company will cause each Paying Agent 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) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent and (ii) during the continuance of any default by the
Company (or any other obligor upon the Securities) in the making of any payment
in respect of the Securities, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and,
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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.
Subject to any applicable abandoned property laws, any money deposited
with the Trustee or any Paying Agent, or then held by the Company, in trust for
the payment of the principal of (and premium, if any) or interest on any
Security and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such 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 repayment, 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 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.
SECTION 10.4. Statement by Officers as to Default,
------------ -----------------------------------
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
The Company shall deliver to the Trustee, as soon as possible and in any
event within 10 days after the Company becomes aware of the occurrence of an
Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default, and the action which the Company
proposes to take with respect thereto.
SECTION 10.5. Existence.
------------ ---------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the
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business of the Company and that the loss thereof is not disadvantageous in any
material respect to the Holders.
SECTION 10.6. Maintenance of Properties.
------------ -------------------------
The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company or any such Subsidiary from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 10.7. Payment of Taxes and Other Claims.
------------ ---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 10.8. Registration and Listing.
------------ ------------------------
The Company (i) will effect all registrations with, and obtain all
approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) for the shares of Common Stock
issuable upon conversion of Securities to be lawfully issued and delivered as
provided herein, and thereafter publicly traded (if permissible under the
Securities Act) and qualified or listed as contemplated by clause (ii) (it being
understood that the Company shall not be required to register the Securities or
the Common Stock issuable on conversion thereof under the Securities Act, except
pursuant to the Registration Rights Agreement referred to in Section 10.11); and
(ii) will qualify the shares of Common Stock required to be issued and delivered
upon conversion of Securities, prior to such issuance or delivery, for quotation
on the Nasdaq National Market or, if the Common Stock is not then quoted on the
Nasdaq National Market, list the Common Stock on each national securities
exchange on which outstanding Common Stock is listed or
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quoted at the time of such delivery. Nothing in this Section 10.8 will limit
the application of Section 10.11.
SECTION 10.9. Compliance with Rule 144A.
------------ -------------------------
Until the third anniversary of the later of the last date of original
issuance of the Securities and the last date on which any Security was acquired
from an Affiliate of the Company, unless the Securities have become convertible
into securities of another Person in accordance with Section 12.11, the Company
will use its best efforts to be subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act. At any time during such period when the Company
is not subject to Section 13 or 15(d) of the Exchange Act, the Company will take
all actions necessary to permit resales of the Securities and shares of Common
Stock issued upon conversion thereof to be made pursuant to Rule 144A, including
furnishing to any holder of such a security (or a beneficial interest therein),
or to any prospective purchaser designated by such holder, upon the request of
such holder, such financial and other information as may be required to be
delivered under paragraph (d)(4) of Rule 44A to permit such resales.
SECTION 10.10. Resale of Certain Securities.
------------- ----------------------------
Until the third anniversary of the last date of original issuance of the
Securities, the Company will not, and will use its reasonable best efforts not
to permit any of its "affiliates" (as defined under Rule 144) to, resell (x) any
Securities which constitute "restricted securities" under Rule 144 or (y) any
Common Stock into which the Securities have been converted under this Indenture
which constitute "restricted securities" under Rule 144, that in either case
have been reacquired by any of them.
SECTION 10.11. Registration Rights.
------------- -------------------
The Company agrees that the Holders (and any Person that has a beneficial
interest in a Security) from time to time of Registrable Securities are entitled
to the benefits of a Registration Rights Agreement, dated as of October 15, 1996
and as the same may be amended from time to time (the "Registration Rights
Agreement"), executed by the Company. Pursuant to the Registration Rights
Agreement, the Company has agreed for the benefit of the Holders from time to
time of Registrable Securities, at the Company's expense, (i) to file within 90
days after the first date of original issuance of the Securities, a Shelf
Registration Statement with the Commission with respect to resales of the
Registrable Securities, (ii) to use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective by the Commission as
promptly as practicable but within the 180 days after such date, and (iii) to
use its reasonable best efforts to maintain such Shelf Registration Statement
continuously effective under the Securities Act during the Effectiveness Period.
Notwithstanding the foregoing, the Company is entitled to
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suspend the use of the prospectus that is part of the Shelf Registration
Statement for resales of Registrable Securities during certain periods as
provided in the Registration Rights Agreement.
If (i) on or prior to 90 days following the first date of original
issuance of the Securities, a Shelf Registration Statement has not been filed
with the Commission, or (ii) on or prior to the 180th day following the first
date of original issuance of the Securities, such Shelf Registration Statement
is not declared effective (each, a "Registration Default"), additional interest
will accrue on the principal amount of this Security from and including the day
following the first day on which such Registration Default occurs to but
excluding the first day on which such Registration Default has been cured. In
addition, in the event that the Shelf Registration Statement becomes effective
and thereafter either (x) the Shelf Registration Statement ceases to be
effective during the Effectiveness Period or (y) use of the prospectus that is
part of the Shelf Registration Statement for resales of Registrable Securities
is suspended or prohibited (whether as permitted by the Registration Rights
Agreement or otherwise), and the total number of days (whether or not
consecutive) in which any such cessation, suspension or prohibition is in effect
equals or exceeds 61 during any 12-month period (each, a "Post Effective
Registration Default"), then additional interest will accrue on the principal
amount of the Securities from and including such 61st day to but excluding the
first day thereafter on which the Shelf Registration Statement is effective and
such use of the prospectus is not suspended or prohibited (provided that any day
on which any such cessation, suspension or prohibition is in effect and that
occurs prior to such first day shall, if within the applicable 12-month period,
be taken into account in determining whether additional interest shall begin to
accrue again after such first day). Such additional interest will be paid
semi-annually in arrears, with the first semi-annual payment due on the first
Interest Payment Date in respect of the Securities following the date on which
such additional interest begins to accrue. Upon any Registration Default,
additional interest will accrue until such Registration Default is cured as
provided above at a rate per annum equal to one-quarter of one percent (0.25%)
(in addition to the interest rate of 6% per annum borne by this Security) to and
including the 90th day following such Registration Default and at a rate per
annum equal to one-half of one percent (0.50%) (in addition to such rate of 6%
per annum) from and including the 91st day following such Registration Default
until such Registration Default is cured as provided above. Upon any
Post-Effective Registration Default, additional interest shall accrue until
cured at a rate per annum equal to one-half of one percent (0.50%) (in addition
to such rate of 6% per annum).
Whenever in this Indenture there is mentioned, in any context, interest
on, or in respect of, any Security, such mention shall be deemed to include
mention of additional interest provided for in this Section to the extent that,
in such context, additional interest is, was or would be accrued or payable in
respect thereof pursuant to the provisions of this Section and express mention
of additional interest in any
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provisions hereof shall not be construed as excluding additional interest in
those provisions hereof where such express mention is not made.
SECTION 10.12. Waiver of Certain Covenants.
------------- ---------------------------
The Company may omit in any particular instance to comply with any
covenant or conditions set forth in Sections 10.5 to 10.7, inclusive, if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1. Right of Redemption.
------------ -------------------
The Securities may be redeemed at the election of the Company, as a whole
or from time to time in part, at any time on or after October 15, 1999, at the
Redemption Prices specified in the form of Security hereinbefore set forth.
SECTION 11.2. Applicability of Article.
------------ ------------------------
Redemption of Securities at the election of the Company, as permitted by
any provision of this Indenture, shall be made in accordance with such provision
and this Article.
SECTION 11.3. Election to Redeem, Notice to Trustee.
------------ -------------------------------------
The election of the Company to redeem any Securities pursuant to Section
11.1 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities, 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 to be redeemed.
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed.
------------ -------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide
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for the selection for redemption of portions (equal to $ 1,000 or any integral
multiple thereof) of the principal amount of Securities of a denomination larger
than $1,000.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and each Security Registrar
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.
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 11.5. 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.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption of any
Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date,
(5) the Conversion Rate, the date on which the right to convert the
Securities to be redeemed will terminate and the place or places where
such Securities may be surrendered for conversion,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
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Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 11.6. Deposit of Redemption Price.
------------ ---------------------------
Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 10.3) 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 other than any Securities called for redemption
on that date which have been converted prior to the date of such deposit.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 3.8) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.
SECTION 11.7. Securities Payable on Redemption Date.
------------ -------------------------------------
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 Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity 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 Dates according to their
terms and the provisions of Section 3.8.
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 borne by the Security.
SECTION 11.8. Securities Redeemed in Part.
------------ ---------------------------
Any Security which is to be redeemed only in part shall be surrendered at
an office or agency of the Company designated for that purpose pursuant to
Section 10.2 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly
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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 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
CONVERSION OF SECURITIES
SECTION 12.1. Conversion Privilege and Conversion Rate.
------------ ----------------------------------------
Subject to and upon compliance with the provisions of this Article, at the
option of the Holder thereof, any Security or any portion which is $1,000 or an
integral multiple thereof may be converted into fully paid and nonassessable
shares (calculated as to each conversion to the nearest 1/100th of a share) of
Common Stock of the Company at the Conversion Rate, determined as hereinafter
provided, in effect at the time of conversion. Such conversion right shall
expire at the close of business on October 15, 2003, subject, in the case of
conversion of any Global Security, to any Applicable Procedures. In case a
Security or portion thereof is called for redemption at the election of the
Company or the Holder thereof exercises his right to require the Company to
repurchase the Security, such conversion right in respect of the Security, or
portion thereof, so called or repurchasable, shall expire at the close of
business on the Redemption Date or the Repurchase Date, as the case may be,
unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be (in each case subject as aforesaid to any
Applicable Procedures with respect to any Global Security).
The rate at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Rate") shall be initially 75.2941
shares of Common Stock for each $1,000 principal amount of Securities. The
Conversion Rate shall be adjusted in certain instances as provided in this
Article Twelve.
SECTION 12.2. Exercise of Conversion Privilege.
------------ --------------------------------
In order to exercise the conversion privilege, the Holder of any Security
to be converted shall surrender such Security, duly endorsed or assigned to the
Company or in blank, at any office or agency of the Company maintained for that
purpose pursuant to Section 10.2, accompanied by a duly signed conversion notice
substantially in the form provided in Section 2.4 stating that the Holder elects
to convert such Security or, if less than the entire principal amount thereof is
to be converted, the portion thereof to be converted. Each Security surrendered
for conversion (in whole or in part) during the period from the close of
business on any Regular Record Date next preceding any Interest Payment Date to
the opening of
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business on such Interest Payment Date shall (except in the case of any Security
or portion thereof which has been called for redemption on a Redemption Date, or
is repurchasable on a Repurchase Date, occurring, in either case, within such
period) be accompanied by payment in New York Clearing House (next day) funds
(or other funds acceptable to the Company) of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of such Security
(or portion thereof, as the case may be) being surrendered for conversion. The
interest so payable on any Interest Payment Date with respect to any Security
(or portion thereof, if applicable) which has been called for redemption on a
Redemption Date, or is repurchasable on a Repurchase Date, occurring, in either
case, during the period from the close of business on the Regular Record Date
next preceding such Interest Payment Date to the opening of business on such
Interest Payment Date, which Security (or portion thereof, if applicable) so
called for redemption or repurchasable is surrendered for conversion (in whole
or in part) during such period, shall be paid upon such conversion to the Holder
of such Security as of the conversion date in an amount equal to the interest
that would have been payable on the principal amount of such Security so called
for redemption or repurchasable and being converted if such principal amount had
been converted as of the close of business on such Interest Payment Date. The
interest so payable on any Interest Payment Date in respect of any Security (or
portion thereof, as the case may be) which has not been called for redemption on
a Redemption Date, or is not repurchasable on a Repurchase Date, occurring, in
either case, during the period from the close of business on the Regular Record
Date next preceding such Interest Payment Date to the opening of business on
such Interest Payment Date, which Security (or portion thereof, as the case may
be) not so called for redemption or repurchasable is surrendered for conversion
(in whole or in part) during such period, shall be paid to the Holder of such
Security as of such Regular Record Date. Interest payable on any Interest
Payment Date in respect of any Security surrendered for conversion on or after
such Interest Payment Date shall be paid to the Holder of such Security as of
the Regular Record Date next preceding such Interest Payment Date,
notwithstanding the exercise of the right of conversion. Except as provided in
this paragraph, no cash payment or adjustment shall be made upon any conversion
on account of any interest accrued from the Interest Payment Date next preceding
the conversion date, in respect of any Security (or part thereof, as the case
may be) surrendered for conversion, or on account of any dividends on the Common
Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and deliver to the Trustee, for delivery to the Holder, a
certificate or certificates for the number of full
<PAGE>
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shares of Common Stock issuable upon conversion, together with payment in lieu
of any fraction of a share, as provided in Section 12.3.
All shares of Common Stock delivered upon such conversion of Restricted
Securities shall rank pari passu with other shares of Common Stock of the
Company and shall bear restrictive legends substantially in the form of the
legends required to be set forth on the Restricted Securities pursuant to
Section 3.6 and shall be subject to the restrictions on transfer provided in
such legends.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in an aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
If shares of Common Stock to be issued upon conversion of a Restricted
Security, or Securities to be issued upon conversion of a Restricted Security in
part only, are to be registered in a name other than that of the beneficial
owner of such Restricted Security, then there must be delivered to the
conversion agent a Surrender Certificate, dated the date of surrender of such
Restricted Security and signed by or on behalf of such beneficial owner, as to
compliance with the restrictions on transfer applicable to such Restricted
Security. Neither the Trustee nor any conversion agent, registrar or transfer
agent shall be required to register in a name other than that of the beneficial
owner, shares of Common Stock or Securities issued upon conversion of any such
Restricted Security not so accompanied by a properly completed Surrender
Certificate.
SECTION 12.3. Fractions of Shares.
------------ -------------------
No fractional shares of Common Stock shall be issued upon conversion of
any Security or Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall calculate and pay a cash
adjustment in respect of such fraction (calculated to the nearest 1/100th of a
share) in an amount equal to the same fraction of the Closing Price at the close
of business on the day of conversion (or, if such day is not a Trading Day, on
the Trading Day immediately preceding such day), alternatively, the Company
shall round up to the next higher whole share.
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SECTION 12.4. Adjustment of Conversion Rate.
------------ -----------------------------
The Conversion Rate shall be subject to adjustments from time to time as
follows:
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in shares of
Common Stock, the Conversion Rate in effect at the opening of business on the
day following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be increased by dividing such
Conversion Rate by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this paragraph (1), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.
(2) Subject to the last sentence of paragraph (7) of this Section, in
case the Company shall issue rights, options or warrants to all holders of its
Common Stock entitling them to subscribe for or purchase shares of Common Stock
at a price per share less than the current market price per share (determined as
provided in paragraph (8) of this Section 12.4) of the Common Stock on the date
fixed for the determination of shareholders entitled to receive such rights,
options or warrants, the Conversion Rate in effect at the opening of business on
the day following the date fixed for such determination shall be increased by
dividing such Conversion Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
current market price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not issue any rights, options or warrants in respect of shares of Common
Stock held in the treasury of the Company.
<PAGE>
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(3) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(4) Subject to the last sentence of this paragraph (4), the last
sentence of paragraph (7) of this Section and the provisions of Section 12.12,
in case the Company shall, by dividend or otherwise, distribute to all holders
of its Common Stock evidences of its indebtedness, shares of any class of
capital stock, or other property (including securities, but excluding (i) any
rights, options or warrants referred to in paragraph (2) of this Section, (ii)
any dividend or distribution paid exclusively in cash, (iii) any dividend or
distribution referred to in paragraph (1) of this Section and (iv) any merger or
consolidation to which Section 12.11 applies), the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the date
fixed for the determination of shareholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in paragraph (8) of this Section 12.4)
of the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution filed with the Trustee) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
distribution. If the Board of Directors determines the fair market value of any
distribution for purposes of this paragraph (4) by reference to the actual or
when issued trading market for any securities comprising such distribution, it
must in doing so consider the prices in such market over the same period used in
computing the current market price per share pursuant to paragraph (8) of this
Section. In lieu of making the foregoing adjustment, in the event that the
Company shall distribute rights or warrants relating to securities of the
Company (other than those referred to in paragraph (2) of this Section)
("Rights") pro rata to holders of Common Stock, the Company shall make proper
provision so that each Holder of a Security who converts such Security (or any
portion thereof) after the record date for such distribution and prior to the
expiration or redemption of the Rights shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable upon such
conversion (the "Conversion Shares"), a number
<PAGE>
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of Rights to be determined as follows: (i) if such conversion occurs on or prior
to the date for the distribution to the holders of Rights of separate
certificates evidencing such Rights (the "Distribution Date"), the same number
of Rights to which a holder of a number of shares of Common Stock equal to the
number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights; and
(ii) if such conversion occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares of Common Stock into which the
principal amount of the Security so converted was convertible immediately prior
to the Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(5) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 12.11 applies or as part of a
distribution referred to in paragraph (4) of this Section) in an aggregate
amount (the "cash amount") that, combined together with (a) the aggregate amount
of any other distributions to all holders of its Common Stock made exclusively
in cash within the 12 months preceding the date of payment of such distribution
and in respect of which no adjustment pursuant to this paragraph (5) has been
made and (b) the aggregate of any cash plus the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and described
in a Board Resolution) of any non-cash consideration payable in respect of any
tender offer by the Company or any Subsidiary for all or any portion of the
Common Stock concluded within the 12 months preceding the date of payment of
such distribution and in respect of which no adjustment pursuant to paragraph
(6) of this Section 12.4 has been made (such cash amount and amounts in (a) and
(b) combined, the "combined cash and tender amount") exceeds 12.5 % of the
product of the current market price per share (determined as provided in
paragraph (8) of this Section 12.4) of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such date
(the "aggregate current market price"), then, and in each such case, immediately
after the close of business on such date for determination, the Conversion Rate
shall be adjusted so that the same shall equal the rate determined by dividing
the Conversion Rate in effect immediately prior to the close of business on the
date fixed for determination of the shareholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of this
Section) of the Common Stock on the date fixed for such determination less an
amount equal to the quotient of (x) the excess of such combined cash and tender
amount over 12.5% of such aggregate current market price divided by (y) the
number of shares of Common Stock outstanding on such date for determination and
(ii) the denominator of which shall be equal to the current market price per
share (determined as provided
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in paragraph (8) of this Section 12.4) of the Common Stock on such date for
determination.
(6) In case a tender offer made by the Company or any Subsidiary for all
or any portion of the Common Stock shall expire and such tender offer (as
amended upon the expiration thereof) shall require the payment to shareholders
(based on the acceptance (up to any maximum specified in the terms of the tender
offer) of Purchased Shares (as defined below)) of an aggregate consideration
(the "consideration amount") having a fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution) that combined together with (a) the aggregate of the cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), as of
the expiration of such tender offer, of any non-cash consideration paid in
respect of any other tender offer by the Company or any Subsidiary for all or
any portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to this paragraph (6) has been made and (b) the aggregate amount of any
distributions to all holders of the Company's Common Stock made exclusively in
cash within the 12 months preceding the expiration of such tender offer and in
respect of which no adjustment pursuant to paragraph (5) of this Section has
been made (such consideration amount and amounts in (a) and (b) combined, the
"combined tender and cash amount") exceeds 12.5% of the product of the current
market price per share of the Common Stock (determined as provided in paragraph
(8) of this Section 12.4) as of the last time (the "Expiration Time") tenders
could have been made pursuant to such tender offer (as it may be amended) times
the number of shares of Common Stock outstanding (including any tendered shares)
as of the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate immediately prior to close of
business on the date of the Expiration Time by a fraction (i) the numerator of
which shall be equal to (A) the product of (I) the current market price per
share of the Common Stock (determined as provided in paragraph (8) of this
Section 12.4) on the date of the Expiration Time multiplied by (11) the number
of shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time less (B) the combined tender and cash amount, and (ii) the
denominator of which shall be equal to the product of (A) the current market
price per share of the Common Stock (determined as provided in paragraph (8) of
this Section 12.41) as of the Expiration Time multiplied by (B) the number of
shares of Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "Purchased Shares").
<PAGE>
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(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger to
which Section 12.11 applies) shall be deemed to involve (a) a distribution of
such securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of shareholders entitled to receive such distribution" and
"the date fixed for such determination" within the meaning of paragraph (4) of
this Section), and (b) a subdivision or combination, as the case may be, of the
number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision becomes effective" or "the day
upon which such combination becomes effective", as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the meaning
of paragraph (3) of this Section 12.4). Rights or warrants issued by the Company
to all holders of its Common Stock entitling the holders thereof to subscribe
for or purchase shares of Common Stock, which rights or warrants (i) are deemed
to be transferred with such shares of Common Stock, (ii) are not exercisable and
(iii) are also issued in respect of future issuances of Common Stock, in each
case in clauses (i) through (iii) until the occurrence of a specified event or
events ("Trigger Event"), shall for purposes of this Section 12.4 not be deemed
issued until the occurrence of the earliest Trigger Event.
(8) For the purpose of any computation under paragraphs (2), (4), (5) or
(6) of this Section 12.4, the current market price per share of Common Stock on
any date shall be calculated by the Company and be deemed to be the average of
the daily Closing Prices for the five consecutive Trading Days selected by the
Company commencing not more than 10 Trading Days before, and ending not later
than, the earlier of the day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "ex date", when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
in the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(9)) would require an increase or decrease of at least one percent in such rate;
provided, however, that any adjustments which by reason of this paragraph (9)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may be.
(10) The Company may make such increases in the Conversion Rate, for the
remaining term of the Securities or any shorter term, in addition to those
required by
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paragraphs (1), (2), (3), (4), (5) and (6) of this Section 12.4, as it considers
to be advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes. The Company shall have the power
to resolve any ambiguity or correct any error in the application of this
paragraph (10) and its actions in so doing shall, absent manifest error, be
final and conclusive.
(11) The Company from time to time at its option may increase the
Conversion Rate by any amount for any period of at least 20 calendar days if the
Board of Directors has made a determination that such increase would be in the
best interests of the Company, which determination shall be conclusive and
evidenced by a Board Resolution. To exercise this option the Company shall
provide a notice to the Trustee and the Holders in accordance with Sections 1.5
and 1.6 at least 15 calendar days prior to the first day of the period during
which the Conversion Rate will be adjusted stating that the Conversion Rate will
be adjusted pursuant to this provision, the period during which the adjusted
Conversion Rate will be in effect and the adjusted Conversion Rate.
SECTION 12.5. Notice of Adjustments of Conversion Rate.
------------ ----------------------------------------
Whenever the Conversion Rate is adjusted as provided in Section 12.4 or in
Section 12.12:
(1) the Company shall compute the adjusted Conversion Rate in
accordance with Section 12.4 and shall prepare a certificate signed by the
chief financial officer or the treasurer of the Company setting forth the
adjusted Conversion Rate and showing in reasonable detail the facts upon
which such adjustment is based, and such certificate shall promptly be
filed with the Trustee and at each office or agency maintained for the.
purpose of conversion of Securities pursuant to Section 10.2; and
(2) a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall forthwith be prepared,
and as soon as practicable after it is prepared, such notice shall be
provided by the Company to the Trustee and to all Holders in accordance
with Sections 1.5 and 1.6. Unless and until the Trustee receives such
notice, it need not inquire into whether any adjustment of the Conversion
Rate is required and may assume that no such adjustment has been, or is
required to be, made.
<PAGE>
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SECTION 12.6. Notice of Certain Corporate Action.
------------ ----------------------------------
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable (i) otherwise than exclusively in cash or
(ii) exclusively in cash in an amount that would require
any adjustment pursuant to Section 12.4; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company, or
of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the conveyance, sale, transfer or lease of all or
substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender offer for
all or a portion of the Company's outstanding shares of Common Stock (or
shall amend any such tender offer);
then the Company shall cause to be filed with the Trustee and at each office or
agency maintained for the purpose of conversion of Securities pursuant to
Section 10.2, and shall cause to be provided to all Holders in accordance with
Section 1.6, at least 20 days (or 10 days in any case specified in clause (a) or
(b) above) prior to the applicable record, expiration or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution, rights,
options or warrants are to be determined, (y) the date on which the right to
make tenders under such tender offer expires or (z) the date on which such
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger,
conveyance, transfer, sale, lease, dissolution, liquidation or winding up.
Neither the failure to give such notice or the notice referred to in the
following paragraph nor any defect
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therein shall affect the legality or validity of the proceedings described in
clauses (a) through (e) of this Section 12.6.
The preceding paragraph to the contrary notwithstanding, the Company shall
cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2, and shall cause to be
provided to all Holders in accordance with Section 1.6, notice of any tender
offer by the Company or any Subsidiary for all or any portion of the Common
Stock at or about the time that such notice of tender offer is provided to the
public generally.
SECTION 12.7. Company to Reserve Common Stock.
------------ -------------------------------
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all Outstanding Securities.
SECTION 12.8. Taxes on Conversions.
------------ --------------------
Except as provided in the next sentence, the Company will pay any and all
taxes and duties that may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Securities pursuant hereto. The Company
shall not, however, be required to pay any tax or duty which may be payable in
respect of any transfer involved in the issue and delivery of shares of Common
Stock in a name other than that of the Holder of the Security or Securities to
be converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such tax
or duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.
SECTION 12.9. Covenant as to Common Stock.
------------ ---------------------------
The Company agrees that all shares of Common Stock which may be delivered
upon conversion of Securities, upon such delivery, will have been duly
authorized and validly issued and will be fully paid and nonassessable Stock)
and, except as provided in Section 12.8, the Company will pay all taxes, liens
and charges with respect to the issue thereof.
SECTION 12.10. Cancellation of Converted Securities.
------------- ------------------------------------
All Securities delivered for conversion shall be delivered to the Trustee
or the Paying Agent or its agent to be canceled by or at the direction of the
Trustee, which shall dispose of the same as provided in Section 3.10.
SECTION 12.11. Provision in Case of Consolidation,
Merger or Sale of Assets.
-----------------------------------
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In case of any consolidation of the Company with any other Person, any
merger of the Company into another Person or of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any conveyance, sale, transfer or lease of all or substantially all of the
properties and assets of the Company, the Person formed by such consolidation or
resulting from such merger or which acquires such properties and assets, as the
case may be, shall execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then Outstanding shall have the right
thereafter, during the period such Security shall be convertible as specified in
Section 12.1, to convert such Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease (including any Common Stock retainable) by a
holder of the number of shares of Common Stock of the Company into which such
Security might have been converted immediately prior to such consolidation,
merger, conveyance, sale, transfer or lease, (a) assuming such holder of Common
Stock of the Company (i) is not a Person with which the Company consolidated,
into which the Company merged or which merged into the Company or to which such
conveyance, sale, transfer or lease was made, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (h) failed to exercise his
rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer or lease (provided that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer, or lease is not the same for each share of Common Stock of the Company
held immediately prior to such consolidation, merger, conveyance, sale, transfer
or lease by others than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised
("Non-electing Share"), then for the purpose of this Section 12.11 the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by the holders of
each Nonelecting Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-electing Shares), and (b) further assuming
that, if such consolidation, merger, conveyance, transfer, sale or lease occurs
before the first date on which Securities may be converted as provided herein,
such Security was convertible immediately prior to the time of such occurrence
at the initial Conversion Rate as adjusted from the first original issue date of
the Securities to such time as provided herein. Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section 12.11 shall similarly apply to successive
consolidations, mergers, conveyances, sales, transfers or leases. Notice of the
execution of such a supplemental indenture shall be given by the Company to the
Holder of each Security as provided in Section 1.6 promptly upon such execution.
In this paragraph, "securities of the kind receivable" upon such consolidation,
merger, conveyance,
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transfer, sale or lease by a holder of Common Stock means securities that, among
other things, are registered and transferable under the Securities Act, and
listed and approved for quotation in all securities markets, in each case to the
same extent as such securities so receivable by a holder of Common Stock.
SECTION 12.12. Optional Provision in Case of a Distribution of
Certain Shares.
-----------------------------------------------
(1) In the event that the Company decides to distribute to all holders
of the Common Stock common stock ("Other Stock") of another corporation ("Other
Corporation") and actually makes such distribution, then in lieu of making the
adjustment to the Conversion Rate required by this Indenture in respect of such
distribution, the Company, at its option if the requirements set forth in this
Section are satisfied, may place in escrow for the benefit of the Holders a
number of shares of Other Stock equal to the aggregate number of shares of Other
Stock that would be distributed to all Holders as of the record date for such
distribution in respect of the shares of Common Stock issuable on conversion of
their Securities, had such Securities been converted on such record date at the
Conversion Rate then in effect (without such adjustment). In the event the
Company exercises this option, upon all conversions of Securities from time to
time after the close of business on such record date, Holders will receive their
respective pro rata portions of the Other Stock held in escrow in addition to
Common Stock. (Any Holder converting a Security after the close of business on
such record date and before the open of business on the distribution date will
receive on conversion a due bill for the relevant number of shares of Other
Stock, which will be distributed to such Holder on the distribution date.) Upon
any such conversion, a Holder's pro rata portion will equal the principal amount
of Securities being converted divided by the aggregate principal amount of all
Securities Outstanding on the record date for such distribution.
(2) The Company may exercise the option described in paragraph (1) of
this Section only if: (i) the aggregate number of shares of Other Stock so
placed in escrow does not exceed 33-1/3% of the aggregate number of all publicly
traded shares of Other Stock and (ii) the total market capitalization of the
Other Corporation is at least $50 million. Compliance with the requirements set
forth in clauses (i) and (ii) of this paragraph (2) will be determined as of the
date on which the distribution of Other Stock to the holders of Common Stock is
completed, provided that if, on the record date for such distribution, shares of
Other Stock are already publicly traded, then compliance with such requirements
will be determined as of such record date. If such requirements are to be
satisfied as of the distribution date but are not, the Company will adjust the
Conversion Rate in respect of such distribution as required by the Indenture,
retroactively to the open of business on the first day after such record date
(and any Holder that receives a due bill upon conversion after the close of
business on such record date but before the open of business on the distribution
date will receive Common Stock pursuant to such adjustment, rather than Other
Stock).
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For the purposes of this Section 12.12, shares of Other Stock will be deemed to
be "publicly traded" if such shares are not held by an Affiliate of the Other
Corporation (other than the Company), may be freely traded by the holders (other
than the Company) without registration under the Securities Act, are of a class
of securities registered under Section 12(b) or (g) of the Exchange Act and are
either approved for trading in the Nasdaq National Market or listed on the New
York Stock Exchange or the American Stock Exchange. For the purposes of this
Section 12.12, the 'total market capitalization" of the Other Corporation for
these purposes will be the product of the reported last bid price per share of
Other Stock in the principal securities market in which such stock is approved
for trading or in which it is listed on the applicable date specified in the
second sentence of this paragraph (2) times the aggregate number of shares of
Other Stock (other than shares held by any Affiliate of the Other Corporation
other than the Company) outstanding on such applicable compliance date. In the
event that the aggregate number of shares of Other Stock to be escrowed for the
benefit of the Holders pursuant to this Section 12.12 would exceed the 331/3%
requirement set forth in clause (i) of this paragraph, the Company may still
exercise its option to escrow shares of Other Stock pursuant to paragraph (1) of
this Section if (a) the number of shares escrowed equal 33-1/3% of the aggregate
number of publicly traded shares of Other Stock on such applicable compliance
date and (b) the Conversion Rate is adjusted as required by this Indenture as if
the aggregate number of shares of Other Stock distributed to holders of Common
Stock in such distribution consisted only of the remaining number of shares that
would have been escrowed pursuant to this paragraph but for the limitation in
clause (i) of this paragraph, to the extent so distributed. (In such a case, any
due bill received by a Holder as provided in paragraph (1) of this Section will
be deemed to represent the right to receive on the distribution date the Other
Stock deliverable on such conversion pursuant to this paragraph (2), which shall
be delivered to such Holder on the distribution date.)
(3) If the Company exercises its option pursuant to paragraphs (1) and
(2) of this Section, it will make appropriate adjustment in the number of shares
of Other Stock deliverable upon conversion of Securities in light of any event
occurring with respect to Other Stock after the close of business on the record
date for the distribution of Other Stock, in each case in the manner provided
for in this Article Twelve as if this Article Twelve applied with respect to
Other Stock rather than Common Stock, to the greatest extent possible, subject
to the following sentence. If, as a result of any such adjustment provided for
in the preceding sentence, the Company would be required to deliver on
conversion immediately thereafter of all Securities then Outstanding a larger
number of shares of Other Stock than the number then held in escrow (together
with any shares to be received in respect of those in escrow as a result of the
event giving rise to such adjustment), the Company will, in lieu of making such
adjustment and to the extent necessary, provide for an amount of cash equal to
the fair market value of such adjustment (to the extent not made) to be
delivered upon conversion of any Security that occurs after such adjustment
would
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otherwise have become effective, in addition to any shares of Other Stock
otherwise deliverable. In addition, in the event that any Other Stock (or any
securities deliverable in addition to or in lieu of Other Stock pursuant to the
application of Section 12.11 to the Other Stock) held in escrow pursuant to this
Section 12.12 at any time (x) ceases to be a class registered under Section
12(b) or (g) of the Exchange Act, (y) ceases to be either approved for trading
in the Nasdaq National Market or listed on the New York Stock Exchange or the
American Stock Exchange or (z) would not be freely tradeable under the
Securities Act when delivered upon conversion of Securities to a Holder that is
not an Affiliate of the Other Corporation, the Company will provide for cash to
be delivered upon subsequent conversions of Securities in lieu of such Other
Stock, in each case in an amount equal to the fair market value of the relevant
portion of such Other Stock immediately prior to such event, in the case of (x)
or (y), or immediately prior to such conversion, in the case of (z). Any
additional shares of Other Stock required to be delivered on conversion of
Securities, and any cash required to be delivered in lieu of Other Stock,
pursuant to this Section 12.12 will be placed in escrow for the benefit of the
Holders of the Securities entitled to receive the same as provided herein (with
any interest earned on such cash being for the account of the Company).
(4) Notwithstanding the foregoing, the Company may, in lieu of placing
any cash in escrow as provided in paragraph (3) of this Section, elect to adjust
the Conversion Rate so that, upon any subsequent conversion, a Holder of
Securities would receive an incremental number of shares of Common Stock equal
to the fair market value of the portion of such cash that it would have received
absent such adjustment. All determinations regarding adjustments in the number
of shares of Other Stock, the substitution of cash for Other Stock and any
adjustment in the Conversion Rate in lieu of the substitution of cash pursuant
to this Section 12.12 are to be made by the Board of Directors in good faith and
in a manner consistent with this Indenture, and any such determination by the
Board of Directors, if set forth in a Board Resolution, will be conclusive. The
Company will give the Trustee and the Holders notice of such adjustment and
substitution in a manner comparable, as nearly as possible, to that required for
notices relating to Conversion Rate adjustments pursuant to Section 12.6. The
rights of the Holders and the obligations of the Company with respect to the
conversion of any Security that exist pursuant to this Indenture or any Security
at any time shall include the rights of the Holders, and the obligations of the
Company, if any, respectively, that exist pursuant to this Section 12.12 at such
time, notwithstanding any omission herein or in the Securities of express
reference to this Section 12.12.
(5) (a) In order to exercise the optional provisions contained in this
Section 12.12, the Company shall, in the notice required to be delivered to the
Trustee and the Holders pursuant to Section 12.6:
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(i) describe the distribution to be made to the holders
of Common Stock and the record and distribution dates therefor;
(ii) state that the Company irrevocably elects to exercise its
option under Section 12.12 subject to compliance with the
requirements of this Section, and the applicable date on which such
compliance will be determined;
(iii) describe the Other Stock to be held in escrow if this
option is exercised and state that the aggregate amount thereof and
the amount attributable to each $1,000 in principal amount of
Securities will be determined as of the record date for the
distribution;
(iv) state that any Holder that converts his Security after
the close of business on the record date and before the open of
business on the distribution date for such distribution will receive
on such conversion a due bill for the relevant number of shares of
Other Stock deliverable on conversion, which shares shall be
delivered on the distribution date (unless compliance with the
requirements referred to above is not satisfied, in which case such
Holder will receive the relevant amount of Common Stock), and
(v) state that, on or as soon as possible after the
distribution date, the Company will give the Holders further notice
as to the matters described in clause (c) of this paragraph (5)
below.
In addition, on or as soon as practicable after the distribution date for
the relevant distribution, in lieu of or, if applicable, in addition to the
requirements of Section 12.5, the Company:
(b) if the requirements referred to in clauses (2) and (5)(a) of this
Section 12.12 have been complied with, shall prepare an Officers' Certificate,
one of the signatories of which shall be the chief financial officer or the
treasurer of the Company, setting forth the terms of the distribution and the
provision of Other Stock made for the benefit of the Holders showing in
reasonable detail the facts upon which such provision is based and stating that
all conditions precedent to the exercise of the option contained in this Section
12.12 have been complied with, and such certificate shall promptly be filed with
the Trustee and at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2; and (c) shall prepare and
deliver to the Trustee and all Holders in accordance with Sections 1.5 and 1.6 a
notice stating (x) whether the distribution of Other Stock has been made and the
requirements referred to in clauses (2) and (5)(a) above have been complied with
and (y) if so, setting forth the amount of Other Stock escrowed for the benefit
of the Holders and the pro rata portion thereof attributable to each $1,000
principal amount of Notes or, if not, stating that the Conversion Rate has been
adjusted as
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required under this Section 12.12 and providing the information in respect of
such adjustment required by Section 12.6 (and describing the resulting effect on
any due bill referred to in clause 5(a)(iv) above).
(6) The Company shall be deemed to have satisfied the escrow
requirements of this Section 12.12 only if it establishes such escrow with the
Trustee or another institution qualified to serve as Trustee hereunder, as
escrow agent, pursuant to a written, commercially reasonable escrow agreement
and maintains such escrow until all Other Stock and/or cash required to be
placed in such escrow are delivered upon conversion of all Outstanding
Securities or the 30th day after the right to convert a Security hereunder
expires. The Company and the Trustee shall make reasonable arrangement for
timely delivery of Other Stock and/or cash held in such escrow to Holders upon
conversion of their Securities. All Other Stock and cash required to be held in
such escrow shall be held such that, upon delivery thereof to a Holder
converting a Security, such Holder shall receive such property free and clear of
all liens, claims and other encumbrances.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Debt.
------------ -------------------------------------
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article (subject to the provisions of
Article Four), the indebtedness represented by the Securities and the payment of
the principal of (and premium, if any) and interest on each and all of the
Securities and any payment of the Repurchase Price (other than by delivery of
shares of Common Stock) are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all Senior Debt.
SECTION 13.2. Payment Over of Proceeds Upon Dissolution, Etc.
------------ ----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event the holders of Senior Debt shall be entitled to receive payment in Ml
of all amounts due or to become due on or in respect of all Senior Debt before
the Holders of the Securities are entitled to receive any payment on account of
principal of (or premium, if any) or interest on the Securities or on account of
the purchase, redemption or
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other acquisition of Securities, and to that end the holders of Senior Debt
shall be entitled to receive, for application to the payment thereof, any
payment or distribution of any kind or character, whether in cash, property or
securities, which may be payable or deliverable in respect of the Securities in
any such case, proceeding, dissolution, liquidation or other winding up or
event.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, securities or other property, before all Senior Debt is paid in
full, and if such fact shall, at or prior to the time of such payment or
distribution, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment or distribution shall be paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
For purposes of this Article only, the words 'cash, securities or other
property" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which shares of stock
are subordinated in right of payment to all then outstanding Senior Debt to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its properties and assets substantially as an entirety to another Person upon
the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or which acquires by conveyance or transfer such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article Eight.
SECTION 13.3. Prior Payment to Senior Debt Upon
Acceleration of Securities.
----------------------------------
In the event that any Securities are declared due and payable before their
Stated Maturity pursuant to Section 5.2, then and in such event the holders of
the Senior Debt outstanding at the time such Securities so become due and
payable shall be entitled to receive payment in full of all amounts due or to
become due on or in respect of all Senior Debt before the Holders of the
Securities are entitled to receive
<PAGE>
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any payment by the Company on account of the principal of (or premium, if any)
or interest on the Securities or on account of the purchase or other acquisition
of Securities.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 13.2 would be applicable.
SECTION 13.4. No Payment When Senior Debt in Default.
------------ --------------------------------------
(a) (i) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on any Senior Debt
beyond any applicable grace period with respect thereto or (ii) in the event
that any other event of default with respect to any Senior Debt shall have
occurred and be continuing which would then permit the holders of such Senior
Debt (or a trustee on behalf of the holders thereof) to declare such Senior Debt
due and payable prior to the date on which it would otherwise have become due
and payable, unless and until, in the case of this clause (ii), such event of
default shall have been cured or waived or shall have ceased to exist after
written notice of such event of default to the Company and the Trustee by any
holder of such Senior Debt (or a trustee on behalf of the holders thereof), or
(b) in the event any judicial proceeding shall be pending with respect to any
such default in payment or event of default, then no payment shall be made by
the Company on account of principal of (or premium, if any) or interest on the
Securities or on account of the purchase, redemption or other acquisition of
Securities.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company, in the case of the Trustee, or the Trustee,
in the case of such Holder.
The provisions of this Section shall not apply to any payment with respect
to which Section 13.2 would be applicable.
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SECTION 13.5. Payment Permitted If No Default.
------------ -------------------------------
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 13.2 or under the conditions
described in Section 13.3 or 13.4, from making payments at any time of principal
of (and premium, if any) or interest on the Securities, or (b) the application
by the Trustee of any money deposited with it hereunder to the payment of or on
account of the principal of (and premium, if any) or interest on the Securities
or the retention of such payment by the Holders if, at the time of such
application by the Trustee, it did not have knowledge that such payment would
have been prohibited by the provisions of this Article.
SECTION 13.6. Subrogation to Rights of Holders of Senior Debt.
------------ -----------------------------------------------
Subject to the payment in full of all Senior Debt, the Holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Debt pursuant to the provisions of this
Article to the rights of the holders of such Senior Debt to receive payments and
distributions of cash, property and securities applicable to the Senior Debt
until the principal of (and premium, if any) and interest on the Securities
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.
SECTION 13.7. Provisions Solely to Define Relative Rights.
------------ -------------------------------------------
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Debt and the Holders of the Securities, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Securities the
principal of (and premium, if any) and interest on the Securities as and when
the same shall become due and payable in accordance with their terms; or (b)
affect the relative rights against the Company of the Holders of the Securities
and creditors of the Company other than the holders of Senior Debt; or (c)
prevent the Trustee or the Holder of any Security 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
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Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
SECTION 13.8. Trustee to Effectuate Subordination.
------------ -----------------------------------
Each holder of a Security by his acceptance thereof authorizes and 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 any and all such purposes.
SECTION 13.9. No Waiver of Subordination Provisions.
------------ -------------------------------------
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder of any Senior Debt, or by
any non-compliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have or
be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt, or otherwise
amend or supplement in any manner Senior Debt or any instrument evidencing the
same or any agreement under which Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt; (iii) release any Person liable in any manner
for the collection of Senior Debt; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.
SECTION 13.10. Notice to Trustee.
------------- -----------------
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee therefor; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Sections 6.1 and 6.3, shall be entitled in all
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respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section at least
two Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within two Business Days
prior to such date.
Subject to the provisions of Sections 6.1 and 6.3, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Debt (or a
trustee therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Debt to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 13.11. Reliance on Judicial Order or
Certificate of Liquidating Agent.
--------------------------------
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Sections 6.1 and 6.3,
and the Holders of the Securities shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt 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.
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt.
------------- ------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt and shall not be liable to any such holders if it shall in good
faith mistakenly pay over or distribute to Holders of Securities or to the
Company or to
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any other Person cash, property or securities to which any holders of Senior
Debt shall be entitled by virtue of this Article or otherwise.
SECTION 13.13. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights.
-------------------------------
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Debt which may at any time
be held by it, to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
SECTION 13.14. Article Applicable to Paying Agents.
------------- -----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Section 13.12 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 13.15. Certain Conversions and Repurchases Deemed Payment.
------------- --------------------------------------------------
For the purposes of this Article only, (1) the issuance and delivery of
junior securities upon conversion of Securities in accordance with Article
Twelve or upon the repurchase of Securities in accordance with Article Fourteen
shall not be deemed to constitute a payment or distribution on account of the
principal of or premium or interest on Securities or on account of the purchase
or other acquisition of Securities, and (2) the payment, issuance or delivery of
cash, property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security. For the purposes of this Section, the term "junior securities"
means (a) shares of any stock of any class of the Company and any cash, property
or securities into which the Securities are convertible pursuant to Article
Twelve and (b) securities of the Company which are subordinated in right of
payment to all Senior Debt which may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a greater
extent than, the Securities are so subordinated as provided in this Article.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Debt and the Holders of the Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance
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with Article Twelve or to exchange such Security for Common Stock in accordance
with Article Fourteen if the Company elects to satisfy the obligations under
Article Fourteen by the delivery of Common Stock.
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 14.1. Right to Require Repurchase.
------------ ---------------------------
In the event that a Change in Control (as hereinafter defined) shall
occur, then each Holder shall have the right, at such Holder's option, to
require the Company to repurchase, and upon the exercise of such right the
Company shall repurchase, all of such Holder's Securities, or any portion of the
principal amount thereof that is equal to $1,000 or any integral multiple
thereof, on the date (the "Repurchase Date") that is 45 days after the date on
which the Company Notice (as defined in Section 14.3) is given to Holders at a
purchase price equal to 100% of the principal amount of the Securities to be
repurchased plus interest accrued to the Repurchase Date (the "Repurchase
Price"); provided, however, that installments of interest on Securities whose
Stated Maturity is on or prior to the Repurchase Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such on the relevant Record Date according to their terms and the provisions of
Section 3.8. At the option of the Company, the Repurchase Price may be paid in
cash or, subject to the fulfillment by the Company of the conditions set forth
Section 14.2, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price as described in Section 14.2(a). Whenever in this
Indenture (including Sections 2.2, 3.1, 5.1(1) and 5.8) there is a reference, in
any context, to the principal of any Security as of any time, such reference
shall be deemed to include reference to the Repurchase Price payable in respect
of such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made; provided, however, that for the purposes of Article Thirteen, such
reference shall be deemed to include reference to the Repurchase Price only if
the Repurchase Price is payable in cash.
SECTION 14.2. Conditions to the Company's Election to Pay the
Repurchase Price in Common Stock.
-----------------------------------------------
The Company may elect to pay the Repurchase Price by delivery of shares of
Common Stock pursuant to Section 14.1 if and only if the following conditions
have been satisfied:
<PAGE>
-100-
(a) The shares of Common Stock deliverable in payment of the Repurchase
Price shall have a fair market value as of the Repurchase Date of not less than
the Repurchase Price. For purposes of this Section 14.2, the fair market value
of shares of Common Stock shall be determined by the Company and shall be equal
to 95% of the average of the Closing Prices for the five consecutive Trading
Days ending on and including the third Trading Day immediately preceding the
Repurchase Date;
(b) In the event any shares of Common Stock to be issued upon repurchase
of Securities hereunder require registration under any Federal securities law
before such shares may be freely transferrable without being subject to any
transfer restrictions under the Securities Act upon issuance, such registration
shall have been completed and shall have become effective prior to the
Repurchase Date;
(c) In the event any shares of Common Stock to be issued upon repurchase
of Securities hereunder require registration with or approval of any
governmental authority under any State law or any other Federal law before such
shares may be validly issued or delivered upon repurchase, such registration
shall have been completed, have become effective and such approval shall have
been obtained, in each case, prior to the Repurchase Date;
(d) The shares of Common Stock deliverable in payment of the Repurchase
Price shall have been approved for quotation in the Nasdaq National Market or
listed on a national securities exchange, in either case, immediately prior to
the Repurchase Date; and
(e) All shares of Common Stock deliverable in payment of the Repurchase
Price shall be issued out of the Company's authorized but unissued Common Stock
and will, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 14.2 are not satisfied
in accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.
SECTION 14.3. Notices; Method of Exercising Repurchase Right, Etc.
------------ ---------------------------------------------------
(a) Unless the Company shall have theretofore called for redemption all
of the Outstanding Securities, on or before the 30th day after the occurrence of
a Change of Control, the Company or, at the request and expense of the Company,
the Trustee, shall give to all Holders of Securities, in the manner provided in
Section 1.6, notice (the "Company Notice') of the occurrence of the Change of
Control and of the repurchase right set forth herein arising as a result
thereof. The Company shall also deliver a copy of such notice of a repurchase
right to the Trustee.
<PAGE>
-101-
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and whether the Repurchase Price shall be
paid by the Company in cash or by delivery of shares of Common Stock,
(4) the instructions a Holder must follow to exercise a
repurchase right,
(5) that on the Repurchase Date the Repurchase Price, and accrued
interest, if any, will become due and payable upon each such Security
designated by the Holder to be repurchased, and that interest thereon
shall cease to accrue on and after said date, and
(6) the Conversion Rate then in effect, the date on which the right
to convert the principal amount of the Securities to be repurchased will
terminate and the place or places where such Securities may be surrendered
for conversion.
No failure of the Company to give the foregoing notices or defect therein
shall limit any Holder's right to exercise a repurchase right or affect the
validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article
Fourteen are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 5th day prior to the Repurchase
Date (i) written notice of the Holder's exercise of such right, which notice
shall set forth the name of the Holder, the principal amount of the Securities
to be repurchased (and, if any Security is to be repurchased in part, the serial
number thereof, the portion of the principal amount thereof to be repurchased
and the name of the Person in which the portion thereof to remain Outstanding
after such repurchase is to be registered) and a statement that an election to
exercise the repurchase right is being made thereby, and, in the event that the
Repurchase Price shall be paid in shares of Common Stock, the name or names
(with addresses) in which the certificate or certificates for shares of Common
Stock shall be issued, and (ii) the Securities with respect to which the
repurchase right is being exercised. Such written notice shall be irrevocable,
except that the right of the Holder to convert the Securities with respect to
which the repurchase right is being exercised shall continue until the close of
business on the Repurchase Date.
<PAGE>
-102-
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
the Repurchase Price in cash or shares of Common Stock, as provided above, for
payment to the Holder on the Repurchase Date or, if shares of Common Stock are
to be paid, as promptly after the Repurchase Date as practicable, together with
accrued and unpaid interest to the Repurchase Date payable with respect to the
Securities as to which the purchase right has been exercised; provided, however,
that installments of interest that mature on or prior to the Repurchase Date
shall be payable in cash, to the Holders of the Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate per annum borne by such Security, and each Security shall remain
convertible into Common Stock until the principal of such Security (or portion
thereof, as the case may be) shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee at the office or agency of the Company designated for
that purpose pursuant to Section 10.2 (with, if the Company or the Trustee so
requires, 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 make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) Any issuance of shares of Common Stock in respect of the Repurchase
Price shall be deemed to have been effected immediately prior to the close of
business on the Repurchase Date and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such repurchase shall be deemed to have become on the Repurchase Date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the Person or Persons in
whose name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open. No payment or adjustment shall be made for dividends or distributions on
any Common Stock issued upon repurchase of any Security declared prior to the
Repurchase Date.
<PAGE>
-103-
(g) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same Holder
and the Repurchase Price shall be payable in shares of Common Stock, the number
of full shares which shall be issuable upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Securities so repurchased.
Instead of any fractional share of Common Stock which would otherwise be
issuable on the repurchase of any Security or Securities, the Company will
deliver to the applicable Holder its check for the current market value of such
fractional share. The current market value of a fraction of a share shall be
determined by multiplying the current market price of a full share by the
fraction, and rounding the result to the nearest cent. For purposes of this
Section, the current market price of a share of Common Stock shall be the
Closing Price of the Common Stock on the Trading Day immediately preceding the
Repurchase Date.
(h) Any issuance and delivery of certificates for shares of Common Stock
on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of any transfer involved
in the issuance or delivery of certificates for shares of Common Stock in a name
other than that of the Holder of the Securities being repurchased, and no such
issuance or delivery shall be made unless and until the Person requesting such
issuance or delivery has paid to the Company the amount of any such tax or duty
or has established, to the satisfaction of the Company, that such tax or duty
has been paid.
(i) All Securities delivered for repurchase shall be delivered to the
Trustee, the Paying Agent or any other agents (as shall be set forth in the
Company Notice) to be canceled at the direction of the Trustee, which shall
dispose of the same as provided in Section 3.10.
SECTION 14.4. Certain Definitions.
------------ -------------------
For purposes of this Article Fourteen,
(a) the term "beneficial owner" shall be determined in accordance with
Rule 13d-3 promulgated by the Commission pursuant to the Exchange Act;
(b) a "Change in Control" shall be deemed to have occurred at the time,
after the original issuance of the Securities, of:
(i) the acquisition by any person of beneficial ownership,
directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares of
capital stock of the Company entitling such person to exercise 50%
or more of the total
<PAGE>
-104-
voting power of all shares of capital stock of the Company entitled
to vote generally in the elections of directors (any shares of
voting stock of which such person is the beneficial owner that are
not then outstanding being deemed outstanding for purposes of
calculating such percentage) other than any such acquisition by the
Company or any employee benefit plan of the Company; or
(ii) any consolidation or merger of the Company with or into,
any other person, any merger of another person with or into the
Company, or any conveyance, transfer, sale, lease or other
disposition of all or substantially all of the assets of the Company
to another person (other than (a) any such transaction (x) which
does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock and (y) pursuant
to which holders of Common Stock immediately prior to such
transaction have the entitlement to exercise, directly or
indirectly, 50% or more of the total voting power of all shares of
capital stock entitled to vote generally in the election of
directors of the continuing or surviving person immediately after
such transaction and (b) any merger which is effected solely to
change the jurisdiction of incorporation of the Company and results
in a reclassification, conversion or exchange of outstanding shares
of Common Stock into solely shares of common stock);
provided, however, that a Change in Control shall not be deemed to have
occurred if the Closing Price for any five Trading Days within the period of 10
consecutive Trading Days (x) ending immediately after the later of the date of
the Change in Control or the date of the public announcement of the Change in
Control (in the case of a Change in Control under Clause (i) above) or (y)
ending immediately prior to the date of the Change in Control (in the case of a
Change in Control under Clause (ii) above), plus the fair market value per share
(as determined by the Board of Directors in good faith, which determination
shall be conclusive and evidenced by a Board Resolution) of any Other Stock or
other property then held in escrow for the benefit of the Holders pursuant to
Section 12.12, shall equal or exceed 105% of the Conversion Price in effect on
each such Trading Day; provided, that any temporary increase in the Conversion
Rate made by the Company pursuant to paragraph (11) of Section 12.4 shall not be
taken into account for purposes of the foregoing determination;
(c) the term "Conversion Price" on any day shall equal $1,000 divided by
the Conversion Rate in effect on each such day; and
<PAGE>
-105-
(d) for purposes of this Section 14.4, the term "person" shall include
any syndicate or group which would be deemed to be a "person" under Section
13(d)(3) of the Exchange Act.
<PAGE>
-106-
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.
UROMED CORPORATION
By
----------------------------------
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
STATE STREET BANK AND
TRUST COMPANY, Trustee
By
----------------------------------
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
<PAGE>
-107-
COMMONWEALTH OF MASSACHUSETTS )
______ ) : ss.: Boston
COUNTY OF SUFFOLK )
On the 15th day of October, 1996, before me personally came
______________________, to me known, who, being by me duly sworn, did depose and
say that he is ____________________ of UroMed Corporation, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
-----------------------------------------
Notary Public
COMMONWEALTH OF MASSACHUSETTS )
) : ss.: Boston
COUNTY OF SUFFOLK )
On the 15th day of October, 1996, before me personally came
________________________, to me known, who, being by me duly sworn, did depose
and say that he is _________________________ of State Street Bank and Trust
Company, a Massachusetts trust company described in and which executed the
foregoing instrument; that he knows the seal of said trust company; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
pursuant to the bylaws of said trust company; and that he signed his name
thereto by like authority.
--------------------------------------
Notary Public
<PAGE>
-108-
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to ss. 3.6(b)(i), (iii) and (v)
of the Indenture)
State Street Bank and Trust Company,
as Trustee
Two International Place, Fourth Floor,
Boston, Massachusetts 02110
Attention:__Corporate Trust Department
Re: 6% Convertible Subordinated Notes due October 15, 2003
of UroMed Corporation (the "Securities")
Reference is made to the Indenture, dated as of October 15, 1996 (the
"Indenture"), between UroMed Corporation (the "Company") and State Street Bank
and Trust Company, as Trustee. Terms used herein and defined in the Indenture or
in Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the
"Securities Act") are used herein as so defined.
This certificate relates to U.S. $__________ principal amount of
Securities, which are evidenced by the following certificates) (the "Specified
Securities"):
CUSIP No(s). _________________________
CERTIFICATE No(s). ___________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Regulation S
<PAGE>
-109-
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
904 or Rule 144 under the Securities Act and with all applicable securities laws
of the states of the United States and other jurisdictions. Accordingly, the
Owner hereby further certifies as follows:
(1) Rule 904 Transfers. if the transfer is being effected in accordance
with Rule 904:
(A) the Owner is not a distributor of the Securities, an affiliate of
the Company or any such distributor or a person acting on behalf of any of the
foregoing;
(B) the offer of the Specified Securities was not made to a person in
the United States;
(C) either:
(i) at the time the buy order was originated, the Transferee was
outside the United States or the Owner and any person acting on its behalf
reasonably believed that the Transferee was outside the United States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the Association of
International Bond Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on its behalf knows
that the transaction has been prearranged with a buyer in the United
States;
(D) no directed selling efforts have been made in the United States by
or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a selling
concession, fee or other remuneration in respect of the Specified Securities,
and the transfer is to occur during the Restricted Period, then the requirements
of Rule 904(c)(1) have been satisfied; and
(F) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after a holding period of at least two
years (computed in accordance with paragraph (d) of Rule 144) has elapsed since
the Specified Securities were last acquired from the Company or from an
affiliate of the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and notice requirements of
Rule 144; or
<PAGE>
-110-
(B) the transfer is occurring after a holding period of at least three
years has elapsed since the Specified Securities were last acquired from the
Company or from an affiliate of the Company, whichever is later, and the Owner
is not, and during the preceding three months has not been, an affiliate of the
Company.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:______
(Print the name of the Undersigned, as such term is defined in the
second paragraph of this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be
stated.)
<PAGE>
-111-
ANNEX B -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to ss. 3.6(b)(ii), (iii), (iv) and (v)
of the Indenture)
State Street Bank and Trust Company,
as Trustee
Two International Place, Fourth Floor,
Boston, Massachusetts 02110
Attention:__Corporate Trust Department
Re: 6% Convertible Subordinated Notes due October 15, 2003
of UroMed Corporation (the "Securities")
------------------------------------------------------
Reference is made to the Indenture, dated as of October 15, 1996 (the
"Indenture"), between UroMed Corporation (the "Company") and State Street Bank
and Trust Company, as Trustee. Terms used herein and defined in the Indenture or
in Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the
"Securities Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificates) (the "Specified
Securities"):
CUSIP No(s). ______________________________
CERTIFICATE No(s). _______________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
<PAGE>
-112-
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with" such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A or Rule 144 under the Securities Act and all applicable securities laws of
the states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person that
the Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A, acquiring
for its own account or for the account of a qualified institutional buyer;
and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner may
be relying on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after a holding period of at least two
years (computed in accordance with paragraph (d) of Rule 144) has elapsed
since the Specified Securities were last acquired from the Company or from
an affiliate of the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and notice
requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least
three years has elapsed since the Specified Securities were last acquired
from the Company or from an affiliate of the Company, whichever is later,
and the Owner is not, and during the preceding three months has not been,
an affiliate of the Company.
<PAGE>
-113-
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:__________________________
(Print the name of the Undersigned, as such term is defined in the
second paragraph of this certificate.)
By:_________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be
stated.)
<PAGE>
-114-
ANNEX C -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to ss. 3.6(c))
State Street Bank and Trust Company,
as Trustee
Two International Place, Fourth Floor,
Boston, Massachusetts 02110
Attention:__Corporate Trust Department
Re: 6% Convertible Subordinated Notes due October 15, 2003
of UroMed Corporation (the "Securities")
------------------------------------------------------
Reference is made to the Indenture, dated as of October 15, 1996 (the
"Indenture"), between UroMed Corporation (the "Company") and State Street Bank
and Trust Company, as Trustee. Terms used herein and defined in the Indenture or
in Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the
"Securities Act") are used herein as so defined.
This certificate relates to U.S. $___________________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ____________________________
CERTIFICATE No(s). _______________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned. as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Securities Act Legend pursuant to Section 3.6(c) of the
<PAGE>
-115-
Indenture. In connection with . such exchange, the Owner hereby certifies that
the exchange is occurring after a holding period of at least three years
(computed in accordance with paragraph (d) of Rule 144) has elapsed since the
Specified Securities were last acquired from the Company or from an affiliate of
the Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:___________________________________
(Print the name of the Undersigned, as such term is defined in the
second paragraph of this certificate.)
By:__________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be
stated.)
<PAGE>
-116-
ANNEX D -- Form of Surrender
Certificate
SURRENDER CERTIFICATE
(For transfer in connection with conversion of
Restricted Securities pursuant to ss. 12.2)
State Street Bank and Trust Company,
as Trustee
Two International Place, Fourth Floor,
Boston, Massachusetts 02110
Attention:__Corporate Trust Department
Re: 6% Convertible Subordinated Notes due October 15, 2003
of UroMed Corporation (the "Securities")
------------------------------------------------------
Reference is made to the Indenture, dated as of October 15, 1996 (the
"Indenture"), between UroMed Corporation (the "Company") and State Street Bank
and Trust Company, as Trustee. Terms used herein and defined in the Indenture or
in Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the
"Securities Act") are used herein as so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ____________________________
CERTIFICATE No(s). _______________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Specified Securities are being surrendered for conversion, and the
Common Stock and/or the Securities issuable on such conversion are to be
registered
<PAGE>
-117-
in the name of a Person other than the Owner. Accordingly, the Owner hereby
certifies that such issuable Common Stock and/or Securities are being
transferred to such other Person (the "Transfer") and that such Transfer
complies with the restrictive legend set forth on the face of the certificate
evidencing the Specified Securities for the reason checked below:
______ The transfer of the Specified Securities complies with
Rule 144 under the Securities Act; or
______ The transfer of the Specified Securities complies with
Rule 144A under the Securities Act; or
______ The transfer of the Specified Securities complies with
Rule 904 under the Securities Act; or
______ The transfer of the Specified Securities has been made to an
institution that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act in a transaction exempt from the registration
requirements of the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:____________________________________
(Print the name of the Undersigned, as such term is defined in the
second paragraph of this certificate.)
By:___________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be
stated.)
Exhibit 10.2
UroMed Corporation
6% Convertible Subordinated Notes due October 15, 2003
---------------------------------------
Purchase Agreement
October 8, 1996
Goldman, Sachs & Co.
PaineWebber Incorporated
J.P. Morgan Securities Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
UroMed Corporation, a Massachusetts corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$60,000,000 principal amount of the Convertible Subordinated Notes, convertible
into Common Stock, no par value ("Stock"), of the Company, specified above (the
"Firm Securities") and, at the election of the Purchasers, up to $9,000,000
additional aggregate principal amount of Convertible Subordinated Notes,
convertible into Stock, of the Company (the "Optional Securities") (the Firm
Securities and the Optional Securities which the Purchasers elect to purchase
pursuant to Section 2 hereof are herein collectively called the "Securities").
As used in Sections 2 and 8 hereof, the term "Purchasers" shall be deemed to
include Goldman Sachs International ("GSI"), which is acting as Goldman, Sachs &
Co.'s selling agent in making certain resales of the securities pursuant to
Section 3 hereof.
The Purchasers and other holders (including subsequent transferees) of
Securities (and any holders of shares of Stock which are issued upon conversion
of such Securities from time to time) will be entitled to the benefits of the
registration rights agreement, to be dated as of the First Time of Delivery (as
defined below) (the "Registration Rights Agreement"), among the Company and the
Purchasers, in the form attached hereto as Exhibit A.
<PAGE>
-2-
1. The Company represents and warrants to, and agrees with, each of
the Purchasers that:
(a) A preliminary offering circular, dated September 27, 1996 (the
"Preliminary Offering Circular"), and an offering circular, dated October
8, 1996 (the "Offering Circular"), have been prepared in connection with
the offering of the Securities and shares of the Stock issuable upon
conversion thereof. Any reference to the "Exchange Act Reports" shall be
deemed to refer to and include the Company's most recent Annual Report on
Form 10-K and all subsequent documents filed by the Company with the
United States Securities and Exchange Commission (the "Commission")
pursuant to Section 13(a), 13(c) or 15(d) of the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act") prior to the latest
Time of Delivery (as defined below). The Exchange Act Reports, when they
were or are filed with the Commission, conformed or will conform in all
material respects to the applicable requirements of the Exchange Act and
the applicable rules and regulations of the Commission thereunder. The
Preliminary Offering Circular or the Offering Circular and any amendments
or supplements thereto, the Exchange Act Reports and any Additional Issuer
Information (as defined in Section 5(f)) did not and will not, as of their
respective dates, contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by a
Purchaser through Goldman, Sachs & Co. expressly for use therein;
(b) The Company has not sustained since the date of the latest
audited financial statements included in the Offering Circular any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular; and, since the
respective dates as of which information is given in the Offering
Circular, except for stock option grants and exercises pursuant to the
Company's existing stock option plan and share purchases pursuant to the
Company's existing employee stock purchase plan, there has not been any
change in the capital stock or long-term debt of the Company or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders" equity or results of operations of the
Company, otherwise than as set forth or contemplated in the Offering
Circular;
<PAGE>
-3-
(c) The Company has good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned
by it, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Offering Circular or such as do not
materially affect the value of such property and do not interfere in any
material respect with the use made and proposed to be made of such
property by the Company; and any real property and buildings held under
lease by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere in any material respect with the use made and proposed to be
made of such property and buildings by the Company;
(d) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the Commonwealth of
Massachusetts, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering Circular,
and has been duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction;
(e) The Company does not, directly or indirectly, have any
subsidiaries or own 5% or more of the stock or other equity interest in
any corporation, firm, partnership, joint venture, association or other
entity.
(f) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; the shares of Stock initially issuable upon
conversion of the Securities have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance with
the provisions of the Securities and the Indenture referred to below, will
be new shares not previously issued, will be duly and validly issued,
fully paid and non-assessable and will conform to the description of the
Stock contained in the Offering Circular;
(g) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered, will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the indenture to be dated as of October 15, 1996 (the "Indenture") between
the Company and State Street Bank and Trust Company, as Trustee (the
"Trustee"), under which they are to be issued, which will be substantially
in the form previously delivered to you, and will be enforceable in
accordance with their terms,
<PAGE>
-4-
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors"
rights and to general equity principles; the Indenture has been duly
authorized and, when executed and delivered by the Company and the
Trustee, the Indenture will constitute a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors" rights and to
general equity principles; and the Securities and the Indenture will
conform to the descriptions thereof in the Offering Circular and will be
in substantially the form previously delivered to you;
(h) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations G, T, U, and X of the Board of Governors of the
Federal Reserve System;
(i) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the offering of the Securities;
(j) The issue and sale of the Securities, the issue and delivery of
shares of Stock upon conversion of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture,
the Registration Rights Agreement and this Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with
or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or
assets of the Company is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation or By-laws of
the Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities, the
issue and delivery of shares of Stock upon conversion of the Securities or
the consummation by the Company of the transactions contemplated by this
Agreement, the Indenture or the Registration Rights Agreement, except for
the filing of a registration statement by the Company with the Commission
pursuant to the United States
<PAGE>
-5-
Securities Act of 1933, as amended (the "Securities Act"), for the
registration of the Securities and the Stock initially issuable upon
conversion thereof as contemplated by the Registration Rights Agreement,
the qualification of the Indenture under the United States Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), as contemplated by
the Registration Rights Agreement, and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws (i in connection with the purchase and
distribution of the Securities by the Purchasers or (ii) as contemplated
by the Registration Rights Agreement;
(k) The Registration Rights Agreement has been duly authorized and
prior to the Closing will be duly executed and delivered by the Company
and upon such execution and delivery will constitute the valid and binding
instrument of the Company enforceable against the Company in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors" rights and to general equity principles and subject
to any limitations imposed by public policy on the indemnification and
contribution provisions of the Registration Rights Agreement;
(l) The Company is not in violation of its Certificate of
Incorporation or By-laws or in default in the performance or observance of
any obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties
may be bound except for any such defaults that individually or in the
aggregate would not have or cause a material adverse effect on the
business, financial position, stockholders" equity or results of
operations of the Company (a "Material Adverse Effect");
(m) To the knowledge of the Company, except as set forth in the
Offering Circular: (i) the Company owns or has the right to use, free and
clear of all liens, charges, claims, encumbrances, pledges, security
interests, defects, or other like restrictions of any kind whatsoever, all
Intellectual Property (as defined below) used in the conduct of its
business in the manner and to the full extent currently conducted and
proposed to be conducted as described in the Offering Circular, without
infringing upon or otherwise acting adversely to the right or claimed
right of any person or entity under or with respect in and to any of such
Intellectual Property; (ii) the Company is not obligated or under any
liability whatsoever to make any material payments by way of royalties,
fees or otherwise to any owner or licensee of, or other claimant to, such
Intellectual Property with respect to the use thereof or in connection
with the conduct of its business in the manner and to the full extent as
currently conducted and proposed to be conducted as described in the
Offering Circular; (iii) there is no infringement by third parties of any
<PAGE>
-6-
such Intellectual Property, except that the Company is aware that a
competitor of the Company is developing an expandable remove-to-void
urethral plug but has insufficient information to determine whether such
competitor's plug would infringe any such Intellectual Property; (iv)
there is no pending or threatened action, suit, proceeding or claim by
others challenging the Company's rights in or to such Intellectual
Property, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (v) there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity or
scope of such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; (vi) there
is no pending or threatened action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any Intellectual Property
of others and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (vii) there is no patent or patent
application of others which contains claims that dominate or may dominate
any Intellectual Property described in the Offering Circular as being
owned by the Company and that is necessary for the conduct of its business
in the manner and to the extent currently conducted and proposed to be
conducted as described in the Offering Circular or that interferes with
the issued or pending claims of any such Intellectual Property; and (viii)
in connection with filing the Company's United States patent applications,
the Company disclosed all pertinent prior art references, and other facts
and information known to it, to the U.S. Patent and Trademark Office in
such applications and all information submitted to the U.S. Patent and
Trademark Office in the relevant applications was accurate and complete;
"Intellectual Property" means all patents, patent applications,
trademarks, trademark applications, service marks, trade names,
copyrights, trade secrets, know how (including all unpatented or
unpatentable proprietary or confidential information, systems or
procedures), technology, inventions, designs, processes, methods,
technical data and information or other intangible asset or any license or
other right to use any of the foregoing;
(n) Except as described in the Offering Circular, the Company has
all licenses, certificates, permits, consents, orders, approvals and
authorizations from U.S. and foreign governmental authorities, including,
without limitation, the United States Food and Drug Administration (the
"FDA") and any agency of any foreign government exercising comparable
authority (including any non-governmental entity whose approval or
authorization is required under foreign law comparable to that
administered by the FDA) in a jurisdiction where the Company's products
are, or, as described in the Offering Circular, are proposed to be, sold
(collectively, "Permits"), which are necessary to own its properties
and/or to conduct its business in the manner and to the extent now
conducted or proposed to be conducted as described in the Offering
Circular, with no material restrictions or
<PAGE>
-7-
qualifications except as disclosed in the Offering Circular, and such
Permits are in full force and effect and no proceeding has been instituted
or is pending or, to the best knowledge of the Company, is contemplated or
threatened which in any manner affects or draws into question the validity
or effectiveness thereof; the Company is not in violation of any statutes,
orders, rules or regulations relating to or affecting the properties or
Permits of the Company or the operation of the Company's business in the
manner and to the extent now conducted or proposed to be conducted as
described in the Offering Circular and is not in violation of any Permit
except for any violations that individually or in the aggregate would not
have or cause a Material Adverse Effect; and the Company has not received,
and has no knowledge of any facts that furnish any reasonable basis for,
any Notice of Adverse Findings, Regulatory Letters, Section 305 notices,
or other similar communications, alerts or seizures requested or
threatened relating to the Company's products.
(o) The statements set forth in the Offering Circular under the
caption "Description of Notes" and "Description of Common Stock", insofar
as they purport to constitute a summary of the terms of the Indenture, the
Securities, the Stock and the Registration Rights Agreement and under the
captions "United States Taxation" and "Underwriting", insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate in all material respects and fairly present the
information set forth therein;
(p) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company is a party
or of which any property of the Company is the subject which, if
determined adversely to the Company, would individually or in the
aggregate have a material adverse effect on the current or future
financial position, stockholders" equity or results of operations of the
Company; and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened
by others;
(q) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system;
(r) The Company is subject to Section 13 or 15(d) of the
Exchange Act;
<PAGE>
-8-
(s) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be an "investment company", or an entity
"controlled" by an "investment company", as such terms are defined in the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
(t) Neither the Company nor any person acting on its behalf has
offered or sold the Securities (or any Stock issuable on conversion
thereof) by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or, with
respect to Securities (or any such Stock) sold outside the United States
to non-U.S. persons (as defined in Rule 902 under the Securities Act), by
means of any directed selling efforts within the meaning of Rule 902 under
the Securities Act and the Company, any affiliate of the Company and any
person acting on its or their behalf has complied with and will implement
the offering restriction requirements of Rule 902 under the Securities
Act;
(u) Within the preceding six months, neither the Company nor any
other person acting on behalf of the Company has offered or sold to any
person any Securities or Stock, or any securities of the same or a similar
class as the Securities or the Stock, other than Securities offered or
sold to the Purchasers hereunder, Stock sold pursuant to an effective
registration statement under the Securities Act and Stock issued in
connection with the ASI acquisition as described in the Offering Circular.
The Company will take reasonable precautions designed to insure that any
offer or sale, direct or indirect, in the United States or to any U.S.
person (as defined in Rule 902 under the Securities Act) of any Securities
or Stock or any substantially similar security issued by the Company,
within six months subsequent to the date on which the distribution of the
Securities has been completed (as notified to the Company by Goldman,
Sachs & Co.), is made under restrictions and other circumstances
reasonably designed not to affect the status of the offer and sale of the
Securities and the Stock issuable upon conversion thereof in the United
States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Securities Act;
(v) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes; and
(w) Price Waterhouse LLP who have certified certain financial
statements of the Company are independent public accountants as required
by the Securities Act and the rules and regulations of the Commission
thereunder.
<PAGE>
-9-
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 96.5% of the principal amount thereof, plus accrued interest, if any,
from October 15, 1996 to the Time of Delivery hereunder, the principal amount of
Securities set forth opposite the name of such Purchaser in Schedule I hereto
and (b) in the event and to the extent that Goldman, Sachs & Co. on behalf of
the Purchasers shall exercise the election to purchase Optional Securities as
provided below, the Company agrees to issue and sell to each of the Purchasers,
and each of the Purchasers agrees, severally and not jointly, to purchase from
the Company, at the same purchase price set forth in clause (a) of this Section
2, that portion of the aggregate principal amount of the Optional Securities as
to which such election shall have been exercised (to be adjusted by you so as to
eliminate fractions of $1,000) determined by multiplying such aggregate
principal amount of Optional Securities by a fraction, the numerator of which is
the maximum aggregate principal amount of Optional Securities which such
Purchaser is entitled to purchase as set forth opposite the name of such
Purchaser in Schedule I hereto and the denominator of which is the maximum
aggregate principal amount of Optional Securities which all of the Purchasers
are entitled to purchase hereunder.
The Company hereby grants to the Purchasers the right to purchase at their
election up to $9,000,000 aggregate principal amount of Optional Securities, at
the purchase price set forth in clause (a) of the first paragraph of this
Section 2, for the sole purpose of covering over allotments in the sale of Firm
Securities. Any such election to purchase Optional Securities may be exercised
by written notice from you to the Company, given within a period of 30 calendar
days after the date of this Agreement, setting forth the aggregate principal
amount of Optional Securities to be purchased and the date on which such
Optional Securities are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you and the Company otherwise agree in writing, earlier than two or later
than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities and the Stock issuable on
conversion thereof only to persons who it reasonably believes are "qualified
institutional buyers" ("QIBs") within the meaning of Rule 144A under the Act in
transactions meeting the requirements of Rule 144A, provided that Goldman, Sachs
& Co. may also offer and sell Securities, (i) subject to an initial minimum
purchase obligation of $100,000, to institutions that it reasonably believes are
"accredited
<PAGE>
-10-
investors" within the meaning of Rule 501 (a)(1), (2), (3) or (7) under
the Securities Act ("Institutional Accredited Investors") or 60 upon the
terms and conditions set forth in Annex I to this Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities or the Stock issuable upon
conversion thereof by any form of general solicitation or general advertising,
including but not limited to the methods described in Rule 502(c) under the
Securities Act, and it will comply with the provisions of Paragraphs (3) and (4)
of Annex I to this Agreement.
4. (a) Except as set forth in the next paragraph, the Securities to be
purchased by each Purchaser hereunder will be represented (i) in the case of
Securities to be initially resold pursuant to Rule 144A under the Securities
Act, by one or more definitive global Securities in book-entry form which will
be deposited by or on behalf of the Company with The Depository Trust Company
("DTC") or its designated custodian and (ii) in the case of Securities to be
initially resold pursuant to Regulation S under the Securities Act, by one or
more definitive global Securities in book-entry form which will be deposited by
or on behalf of the Company with DTC or its designated custodian for the benefit
of Morgan Guaranty Trust Company of New York (Brussels office), as operator of
the Euroclear System, or Cedel Bank, Societe Anonyme, or both, for credit to the
account of GSI, unless otherwise directed by GSI. The Company will deliver the
Securities to Goldman, Sachs & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by
certified or official bank check or checks, or by wire transfer, payable to the
order of the Company in Federal (same day) funds, by causing DTC to credit the
Securities to the account of Goldman, Sachs & Co. (or, if and to the extent
requested by Goldman, Sachs & Co., GSI) at DTC. The Company will cause the
certificates representing the Securities to be made available to Goldman, Sachs
& Co. for checking at least twenty-four hours prior to the Time of Delivery (as
defined below) with respect thereto at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City
time, on October 15, 1996, or such other time and date as Goldman, Sachs & Co.
and the Company may agree upon in writing and, with respect to the Optional
Securities, 9:30 a.m., Now York City time, on the date specified by Goldman,
Sachs & Co. in the written notice given by Goldman, Sachs & Co. of the
Purchasers" election to purchase such Optional Securities, or such other time
and date as Goldman, Sachs & Co. and the Company may agree upon in writing. Such
time and date for delivery of the Firm Securities is herein called the "First
Time of Delivery", such time and date for delivery of the Optional Securities,
if not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a "Time of
Delivery".
<PAGE>
-11-
Such Securities, if any, as Goldman, Sachs & Co. may request upon at least
forty-eight hours" prior notice to the Company (such request to include the
authorized denominations and the names in which they are to be registered),
shall be delivered in definitive certificated form, by or on behalf of the
Company to Goldman, Sachs & Co., against payment by or on behalf of such
Purchaser of the purchase price therefor by certified or official bank check or
checks, or by wire transfer, payable to the order of the Company in Federal
(same day) funds. The Company will cause the certificates representing the
Securities to be made available for checking and packaging at least twenty-four
hours prior to the Time of Delivery with respect thereto at the office of
Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004 (the "New York
Office").
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 76) hereof, will be delivered at such time and date at the
offices of Sullivan & Cromwell, 125 Broad Street, New York, New York 10004 (the
"Closing Location"), and the Securities will be delivered at the Designated
Office and, if applicable, the New York Office, all at such Time of Delivery. A
meeting will be held at the Closing Location at 2:00 p.m., New York City time,
on the New York Business Day next preceding each Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make no
amendment or any supplement to the Offering Circular which shall be disapproved
by you promptly after reasonable notice thereof; and to furnish you with copies
thereof;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
<PAGE>
-12-
(c) To furnish the Purchasers with four copies of the Offering Circular
and each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants" report(s) in the Offering Circular,
and any amendment or supplement containing amendments to the financial
statements covered by such report(s), signed by the accountants, and additional
copies thereof in such quantities as you may from time to time reasonably
request, and if, at any time prior to the earlier of (i) the time the Purchasers
have sold all the Securities purchased hereunder as notified to the Company by
Goldman, Sachs & Co. and (ii) the expiration of nine months after the date of
the Offering Circular, any event shall have occurred as a result of which the
Offering Circular as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary or desirable during such same
period to amend or supplement the Offering Circular, to notify you and upon your
request to prepare and furnish without charge to each Purchaser and to any
dealer in securities as many copies as you may from time to time reasonably
request of an amended Offering Circular or a supplement to the Offering Circular
which will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing until
the date 90 days after the date hereof, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any Stock or other
securities of the Company that are substantially similar to the Securities or
the Stock or any securities that are convertible into or exchangeable for, or
that represent the right to receive, Stock or substantially similar securities
(other than pursuant to employee stock option and stock purchase plans existing
on, or upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without the prior written
consent of Goldman, Sachs & Co.;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, for the benefit of holders from time to time of Securities and
Stock issuable upon conversion thereof, to furnish at its expense, upon request,
to holders of Securities and the Stock issuable upon conversion thereof and
prospective purchasers of Securities and the Stock issuable upon conversion
thereof information (the "Additional Issuer Information") satisfying the
requirements of subsection (d)(4)(i) of Rule 144A under the Securities Act;
<PAGE>
-13-
(g) To use its best efforts to cause the Securities to be eligible for the
PORTAL trading system of the National Association of Securities Dealers, Inc.:
(h) To file with the Commission, not later than 15 days after the First
Time of Delivery, five copies of a notice on Form D under the Securities Act
(one of which will be manually signed by a person duly authorized by the
Company); to otherwise comply with the requirements of Rule 503 under the
Securities Act; and to furnish promptly to you evidence of each such required
timely filing (including a copy thereof);
(i) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders" equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants),
which requirement will be satisfied by the furnishing of the Company's Annual
Report on Form 10-K (or any applicable successor thereto under the Exchange
Act), and, as soon as practicable after the end of each of the first three
quarters of each fiscal year (beginning with the fiscal quarter ending after the
date of the Offering Circular), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail, which
requirement will be satisfied by the furnishing of the Company's Quarterly
Report on Form 10-Q (or any applicable successor thereto under the Exchange
Act);
(j) During a period of five years from the date of the Offering Circular,
to furnish to you copies of all reports or other communications (financial or
other) furnished to stockholders of the Company and to deliver to you as soon as
they are available, copies of any reports and financial statements furnished to
or filed with the Commission or any securities exchange on which the Securities
or any class of securities of the Company is listed (such financial statements
to be on a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission); and during a period of one year from the date of the
Offering Circular, to furnish to you such additional information concerning the
business and financial condition of the Company as you may from time to time
reasonably request;
(k) During the period continuing until three years after the latest Time
of Delivery, the Company will not, and will use reasonable best efforts to not
permit any of its "affiliates" (as defined in Rule 144 under the Securities Act)
to, resell (i) any of the Securities which constitute "restricted securities"
under Rule 144 or (ii) any shares of Stock unto which any of the Securities have
been converted which constitute "restricted securities" under Rule 144, that in
either case have been reacquired by any of them;
<PAGE>
-14-
(l) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Offering Circular
under the caption "Use of Proceeds"; and
(m) To reserve and keep available at all times, free of preemptive rights,
shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue new shares of its Stock upon conversion of the Securities.
6. The Company covenants and agrees with the several Purchasers that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
issue of the Securities and the shares of Stock issuable upon conversion of the
Securities and all other expenses in connection with the preparation and
printing of the Preliminary Offering Circular and the Offering Circular and any
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Purchasers and dealers; (ii) the cost of printing or producing
any Agreement among Purchasers, this Agreement, the Indenture, the Registration
Rights Agreement, the Blue Sky and Legal Investment Memoranda and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities, provided, however, that the Company shall not be required to pay
more than $5,000 for the document production expenses of Sullivan & Cromwell;
(iii) all expenses in connection with the qualification of the Securities and
the shares of Stock issuable upon conversion of the Securities for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the reasonable fees and disbursements of counsel for the Purchasers in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; M the cost of preparing the Securities and shares of
Stock issuable upon conversion thereof, as the case may be; (vi) the fees and
expenses of the Trustee and any agent of the Trustee and the reasonable fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; (vii) fees and expenses of any transfer or conversion agent or
registrar for the Securities or the Stock issuable upon conversion thereof, as
the case may be; (viii) any cost incurred in connection with the designation of
the Securities for trading in PORTAL and (ix) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the Purchasers
will pay all of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder at each Time of Delivery
shall be subject to the condition that all representations and warranties and
other statements of the Company herein are, at and as of such Time of Delivery,
true and
<PAGE>
-15-
correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) Sullivan & Cromwell, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated such Time of Delivery, with respect to
the incorporation of the Company, the validity of the Indenture, the Securities
and the shares of stock issuable upon conversion of the Securities, this
Agreement and the Registration Rights Agreement, the Offering Circular and the
offering of the Securities as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(b) Bingham, Dana & Gould, LLP, counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in the form
of Exhibit B hereto;
(c) Fish & Richardson P.C., patent counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The statements contained in the Offering Circular under the
captions "Risk Factors-Uncertainty Regarding Patents and Protection of
Proprietary Technology" and "Business-Patents and Proprietary Rights",
insofar as they relate to or constitute a summary of provisions of
statutes, regulations, contracts and agreements, patents, patent
applications or other matters of U.S. patent or trademark law, are
accurate in all material respects and fairly present the information set
forth therein; and
(ii) To the knowledge of such counsel, except as set forth in the
Offering Circular: (A) the Company owns or has the right to use, free and
clear of all liens, charges, claims, encumbrances, pledges, security
interests, defects, or other like restrictions of any kind whatsoever, all
Intellectual Property used in the conduct of its business in the manner
and to the extent currently conducted and proposed to be conducted as
described in the Offering Circular, without infringing upon or otherwise
acting adversely to the right or claimed right of any person or entity
under or with respect in and to any of such Intellectual Property; (B) the
Company is not obligated or under any liability to make any material
payments by way of royalties, fees or otherwise to any owner or licensee
of, or other claimant to, such Intellectual Property with respect to the
use thereof or in connection with the conduct of its business in the
manner and to the extent currently conducted and proposed to be conducted
as described in the Offering Circular; (C) such counsel is not aware of
any infringement by third parties of any such Intellectual Property,
except that such counsel is aware that a competitor of the Company is
<PAGE>
-16-
developing an expandable remove-to-void urethral plug but has insufficient
information to determine whether such competitor's plug would infringe any
such Intellectual Property; (D) such counsel is not aware of any pending
or threatened action, suit, proceeding or claim by others challenging the
Company's rights in or to such Intellectual Property, and such counsel is
not aware of any facts which would form a reasonable basis for any such
claim; (E) such counsel is not aware of any pending or threatened action,
suit, proceeding or claim by others challenging the validity or scope of
the patents constituting a part of such Intellectual Property, and such
counsel is not aware of any facts which would form a reasonable basis for
any such claim; (F) such counsel is not aware of any pending or threatened
action, suit, proceeding or claim by others that the Company infringes or
otherwise violates any Intellectual Property of others, and such counsel
is not aware of any facts which would form a reasonable basis for any such
claim; and (G) such counsel is not aware of any patent or patent
application of others which contains claims that dominate or may dominate
any Intellectual Property described in the Offering Circular as being
owned by the Company and that is necessary for the conduct of its business
in the manner and to the extent currently conducted and proposed to be
conducted as described in the Offering Circular or that interferes with
the issued or pending claims of any such Intellectual Property;
(d) On the date of the Offering Circular prior to the execution of this
Agreement and also at each Time of Delivery, Price Waterhouse, LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex II hereto;
(e) (i) The Company shall not have sustained since the date of the latest
audited financial statements included in the Offering Circular any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Circular, and (ii) since the respective dates as of
which information is given in the Offering Circular, except for stock option
grants and exercises pursuant to the Company's employee stock purchase plan
existing at the date of this Agreement and share purchases pursuant to the
Company's employee stock purchase plan existing at the date of this Agreement,
there shall not hate been any change in the capital stock or long-term debt of
the Company or any change, or any development involving a prospective change, in
or affecting the general affairs, management, financial position, stockholders"
equity or results of operations of the Company, otherwise than as set forth or
contemplated in the Offering Circular, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of the Purchasers so
material and adverse as to make it impracticable or inadvisable to proceed with
the offering
<PAGE>
-17-
or the delivery of the Securities on the terms and in the manner contemplated in
this Agreement and in the Offering Circular;
(f) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(g) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; or on the NASDAQ National Market; (ii)
a suspension or material limitation in trading in the Company's securities on
the NASDAQ National Market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this Clause (iv) in the judgment of the
Purchasers makes it impracticable or inadvisable to proceed with the offering or
the delivery of the Securities on the terms and in the manner contemplated in
the Offering Circular or (v) the occurrence of any material adverse change in
the existing, financial, political or economic conditions in the United States
or elsewhere which, in the judgment of the Purchasers, would materially and
adversely affect the financial markets or the markets for the Securities, the
Stock or other debt or equity securities;
(h) The Securities shall have been designated for trading on PORTAL;
and
(i) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser against
any losses, claims, damages or liabilities, joint or several, to which such
Purchaser may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Offering Circular or the
Offering Circular, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
necessary to make the statements
<PAGE>
-18-
therein not misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser in connection with investigating
or defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Offering Circular or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Purchaser through Goldman, Sachs &
Co. expressly for use therein. Any amounts advanced by the Company to an
indemnified party pursuant to this Section 8(a) as a result of such losses shall
be returned to the Company if it shall be finally determined by such a court in
a judgment not subject to appeal or final review that such indemnified party was
not entitled to indemnification by the Company.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Offering Circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Purchaser through
Goldman, Sachs & Co. expressly for use therein; and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
<PAGE>
-19-
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein although applicable in accordance with
its terms, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the
Purchasers on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Purchasers on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Purchasers on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Purchasers, in each case as set forth in the
Offering Circular. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Purchasers on the
other and the parties" relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rate allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d) The amount paid or payable by an
<PAGE>
-20-
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchaser's obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act; and the obligations of the
Purchasers under this Section 8 shall be in addition to any liability which the
respective Purchasers may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal
<PAGE>
-21-
amount of such Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Securities, then the Company shall
have the right to require each non-defaulting Purchaser to purchase the
principal amount of Securities which such Purchaser agreed to purchase hereunder
and, in addition, to require each non-defaulting Purchaser to purchase its pro
rate share (based on the principal amount of Securities which such Purchaser
agreed to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to either (a) clause
(i), (iii), (iv) or (v) of Section 7(g) hereof or (b) Section 9 hereof, the
Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement,
<PAGE>
-22-
request, notice or agreement on behalf of any Purchaser made or given by you
jointly or by Goldman, Sachs & Co. on your behalf.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you in care of Goldman, Sachs & Co., 85 Broad Street,
New York, New York 10004, Attention: Registration Department; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Offering Circular, Attention:
President and Chief Executive Officer; provided, however, that any notice to a
Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers" Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company and, to the extent provided in Sections 8 and 10
hereof, the officers and directors of the Company, GSI and each person who
controls the Company, any Purchaser or GSI, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No Purchaser of
any of the Securities from any Purchaser shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.
<PAGE>
-23-
Very truly yours,
UroMed Corporation
By:.________________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
PaineWebber Incorporated
J.P. Morgan Securities Inc.
By: Goldman, Sachs & Co.
- ---------------------------------
(Goldman, Sachs & Co.)
<PAGE>
-24-
SCHEDULE I
Aggregate Principal
Principal Amount Amount of Optional
of Firm Securities to be
Securities to Purchased if
be Purchased Maximum Option
Purchaser Exercised
- ----------------------------------- ------------------ ------------------
Goldman, Sachs & Co.............. $40,002,000 $6,000,300
PaineWebber Incorporated......... 13,332,000 1,999,800
J.P. Morgan Securities Inc....... 6,666,000 999,900
------------------ ------------------
Total................. $60,000,000 $9,000,000
<PAGE>
A-1
ANNEX I
(1) The Securities and the Stock issuable upon the conversion thereof have
not been registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S under the Securities Act or pursuant to
an exemption from the registration requirements of the Securities Act. Goldman,
Sachs & Co. represent that they have offered and sold the Securities and Stock
issuable upon the conversion thereof, and will offer and sell the Securities and
the Stock issuable upon the conversion thereof, (i) as part of their
distribution at any time and 00 otherwise until 40 days after the later of the
commencement of the offering and the latest Time of Delivery, in each case (i)
and (ii), only through GSI, as their selling agent, in accordance with Rule 903
of Regulation S. Accordingly, Goldman, Sachs & Co. agree that neither they,
their affiliates nor any persons acting on their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities or the
Stock issuable upon the conversion thereof, and it and they have complied and
will comply with the offering restrictions requirement of Regulation S. Goldman,
Sachs & Co. agree that, at or prior to confirmation of sale of Securities or
Stock issuable upon conversion thereof, they or GSI will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities or any such Stock from it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby and the Stock issuable upon conversion
thereof have not been registered under the U.S. Securities Act of 1933
(the "Securities Act") and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons (i) as part
of their distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and the issue date with
respect to additional Securities, if any, issued to cover over-allotments,
except in either case in accordance with Regulation S (or Rule 144A if
available) under the Securities Act. Terms used above have the meaning
given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation
S.
Goldman, Sachs & Co. further agree that they and GSI have not entered and
will not enter into any contractual arrangement with respect to the distribution
or delivery of the Securities, except with their affiliates or with the prior
written consent of the Company.
(2) Notwithstanding the foregoing, Securities and Stock issuable upon
conversion thereof may be offered, sold and delivered by Goldman, Sachs & Co.
<PAGE>
A-2-
pursuant to clause (a) of Section 3 of this Agreement without delivery of the
written statement required by paragraph (1) above.
(3) Each Purchaser represents and agrees that (i) it (and, in the case of
Goldman, Sachs & Co., GSI) has not offered or sold and prior to the date six
months after the date of issue of the Securities will not offer or sell any
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (ii) it (and, in the case of Goldman,
Sachs & Co., GSI has complied, and will comply, with all applicable provisions
of the Financial Services Act 1986 of Great Britain with respect to anything
done by it in relation to the Securities in, from or otherwise involving the
United Kingdom, and (iii) it (and, in the case of Goldman, Sachs & Co., GSI has
only issued or passed on, and will only issue or pass on, in the United Kingdom,
any document received by it in connection with the issuance of the Securities to
a person who is of a kind described in Article 11(3) of the Financial Services
Act 1996 (Investment Advertisements) (Exemptions) Order 1996 of Great Britain or
is a person to whom the document may otherwise lawfully be issued or passed on.
(4) Each Purchaser agrees that it (and, in the case of Goldman, Sachs &
Co., GSI) will not offer, sell or deliver any of the Securities in any
jurisdiction outside the United States except under circumstances that will
result in compliance with the applicable laws thereof, and that it (and, in the
case of Goldman, Sachs & Co., GSI) will take at its own expense whatever action
is required to permit its purchase and resale of the Securities in such
jurisdictions. Each Purchaser understands that no action has been taken to
permit a public offering in any jurisdiction outside the United States where
action would be required for such purpose. Each Purchaser agrees not to cause
any advertisement of the Securities to be published in any newspaper or
periodical or posted in any public place and not to issue any circular relating
to the Securities except in any such case at its own risk and expense.
<PAGE>
ANNEX II
Pursuant to Section 7(e) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Securities
Exchange Act of 1934 (the "Exchange Act") and the applicable published
rules and regulations thereunder;
(ii) In their opinion, the financial statements and financial
statement schedules audited by them and included in the Offering Circular
comply as to form in all material respects with the applicable
requirements of the Exchange Act and the related published rules and
regulations;
(iii) The unaudited selected financial information with respect to
the results of operations and financial position of the Company for the
five most recent fiscal years included in the Offering Circular agrees
with the corresponding amounts (after restatements where applicable) in
the audited financial statements for such five fiscal years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Offering Circular, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited statements of operations, balance sheets and
statements of cash flows included in the Offering Circular are not
in conformity with generally accepted accounting principles applied
on the basis substantially consistent with the basis for the audited
statements of operations, balance sheets and statements of cash
flows included in the Offering Circular;
(B) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earnouts of performance shares and upon conversions of convertible
securities, in each case
<PAGE>
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which were outstanding on the date of the latest financial
statements included in the Offering Circular) or any increase in the
long-term debt of the Company and its subsidiaries, or any decreases
in net current assets or stockholders" equity or other items
specified by the Purchasers, or any increases in any items specified
by the Purchasers, in each case as compared with amounts shown in
the latest balance sheet included in the Offering Circular except in
each case for changes, increases or decreases which the Offering
Circular discloses have occurred or may occur or which are described
in such letter; and
(C) for the period from the date of the latest financial
statements included in the Offering Circular to the specified date
referred to in Clause (B) there were any decreases in net revenues
or operating profit or the total or per share amounts of net income
or other items specified by the Purchasers, or any increases in any
items specified by the Representatives, in each case as compared
with the comparable period of the preceding year and with any other
period of corresponding length specified by the Purchasers, except
in each case for decreases or increases which the Offering Circular
discloses have occurred or may occur or which are described in such
letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures, inspection
of minute books, inquiries and other procedures referred to in paragraphs
(iii) and (iv) above, they have carried out certain specified procedures,
not constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Purchasers, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Offering Circular, and have compared certain of such
amounts, percentages and financial information with the accounting records
of the Company and its subsidiaries and have found them to be in
agreement.
Exhibit 10.3
UroMed Corporation
6% Convertible Subordinated Notes due October 5, 2003
Registration Rights Agreement
Dated as of
October 15, 1996
Goldman, Sachs & Co.,
PaineWebber Incorporated,
J.P. Morgan Securities Inc.,
c/o Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
UroMed Corporation, a Massachusetts corporation (the "Company"), proposes
to issue and sell to Goldman, Sachs & Co., PaineWebber Incorporated and J.P.
Morgan Securities Inc. (the "Purchasers"), upon the terms set forth in a
purchase agreement dated October 8, 1996 (the "Purchase Agreement") between the
Purchasers and the Company, its 6% Convertible Subordinated Notes due October
15, 2003 (the "Securities"). As an inducement to the Purchasers to enter into
the Purchase Agreement and in satisfaction of a condition to the obligations of
the Purchasers thereunder, the Company agrees with the Purchasers, (i) for the
benefit of the Purchasers and (ii) for the benefit of the holders and beneficial
owners from time to time of the Securities and the Common Stock, no par value
per share (the "Stock"), of the Company issuable upon conversion of such
Securities (collectively, the "Registrable Securities"), including the
Purchasers (each of the foregoing, including such beneficial owners, a "Holder"
and, together, the "Holders"), as follows:
1. Definitions. (a) Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the Purchase
Agreement. As used in this Agreement, the following defined terms shall have
the following meanings:
"Act" or "Securities Act" means the United States Securities Act of 1933,
as amended.
"Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and
<PAGE>
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policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Closing Date" means the First Time of Delivery as defined in the
Purchase Agreement.
"Commission" means the United States Securities and Exchange Commission.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in Section 2(b) hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Indenture" means the Indenture, dated as of as of October 15, 1996, and
as the same may be amended from time to time, between the Company and State
Street Bank and Trust Company, as Trustee.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
as set forth in Section 6 hereof.
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
"Shelf Registration Statement" means a shelf registration statement of the
Company pursuant to the provisions of Section 2 hereof filed with the Commission
which covers some or all of the Registrable Securities, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
<PAGE>
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Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
(b) Wherever there is a reference in this Agreement to a percentage of the
"principal amount" of Registrable Securities or to a percentage of Registrable
Securities, Stock shall be treated as representing the principal amount of
Securities which was surrendered for conversion or exchange in order to receive
such number of shares of Stock. References in this Agreement to Registrable
Statements covered by the Shelf Registration Statement at any time mean the
Registrable Securities that, at such time, are registered under such statement
and have not been sold pursuant thereto (or pursuant to Rule 144 such that they
have ceased to be subject to transfer restrictions under the Act as provided by
the Indenture).
2. Shelf Registration. (a) The Company shall, within 90 calendar days
following the Closing Date, file with the Commission a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities by
Holders from time to time in accordance with the methods of distribution elected
by such Holders and set forth in such Shelf Registration Statement and,
thereafter, shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective under the Act within 180
calendar days following the Closing Date; provided, however, that no Holder
shall be entitled to have Registrable Securities covered by such Shelf
Registration unless such Holder is in compliance with Section 3(m) hereof.
(b) The Company shall use its reasonable best efforts:
(i) To keep the Shelf Registration Statement continuously effective
in order to permit the Prospectus forming part thereof to be usable by
Holders for a period of three years from the later of (x) the date the
Shelf Registration Statement is declared effective and (y) the last Time
of Delivery, or such shorter period that will terminate upon the earlier
of the following: (A) when all the unconverted Securities, together with
all shares of Stock and any other securities) issued upon conversion of
any converted Securities, that are covered by the Shelf Registration
Statement have been transferred pursuant to the Shelf Registration
Statement or have been transferred pursuant to Rule 144 under the Act or
otherwise transferred in a manner that results in delivery of a new
security not subject to transfer restrictions under the Act as provided by
the Indenture and (B) when, in the written opinion of independent counsel
to the Company, all outstanding Registrable Securities held by persons
that are not Affiliates of the Company may be resold without registration
under the Act pursuant to Rule 144(k) under the Act or any
<PAGE>
-4-
successor or analogous provision thereto (in any such case, such period
being called the "Effectiveness Period");
(ii) After the effectiveness of the Shelf Registration Statement,
promptly upon the request of any Holder, to take any action reasonably
necessary to register the sale of any Registrable Securities of such
Holder, including, without limitation, any action necessary to identify
such Holder as a selling securityholder in a Prospectus supplement; and
(iii) If at any time, the Securities, pursuant to Article Twelve
(excluding Section 12.12) of the Indenture, are convertible into
securities other than the Company's Stock, the Company shall, or shall
cause any successor under the Indenture to, cause such securities to be
included in the Shelf Registration Statement no later than the date on
which the Securities may then be convertible into such securities. No
later than such date, the Company shall cause any such successor to
execute and deliver a written agreement to the Trustee under the
Indenture, for the benefit of the Holders, providing such Holders with the
benefits provided to them under this Agreement, but with respect to such
other securities (treating the issuer of such other securities as the
Company for this purpose).
The Company shall be deemed not to have used its reasonable best efforts
to keep the Shelf Registration Statement effective during the requisite period
if the Company voluntarily takes any action that would result in Holders of
Registrable Securities covered thereby not being able to offer and sell any such
Registrable Securities during that period, unless such action is required by
applicable law and the Company thereafter promptly complies with the
requirements of paragraph 3(i) below.
(c) The Company may suspend the use of the Prospectus for a period not to
exceed 30 days in any three-month period or four periods not to exceed an
aggregate of 60 days in any 12-month period if the Board of Directors of the
Company shall have determined in good faith that because of valid business
reasons (not including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets, pending corporate
developments and similar events, it is in the best interests of the Company to
suspend such use, and prior to suspending such use the Company provides the
Holders with written notice of such suspension, which notice need not specify
the nature of the event giving rise to such suspension.
3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
<PAGE>
-5-
(a) The Company shall furnish to the Purchasers, prior to the filing
thereof with the Commission, a copy of the Shelf Registration Statement,
and each amendment thereto and each amendment or supplement, if any, to
the Prospectus included therein, and shall use its best efforts to reflect
in each such document, when so filed with the Commission, such comments as
the Purchasers reasonably may propose.
(b) The Company shall promptly take such action as may be necessary
so that (i) each of the Shelf Registration Statement and any amendment
thereto and the Prospectus forming part thereof and any amendment or
supplement thereto (and each report or other document incorporated therein
by reference in each case) complies in all material respects with the
Securities Act and the Exchange Act and the respective rules and
regulations thereunder, (ii) each of the Shelf Registration Statement and
any amendment thereto does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading and (iii) each of the Prospectus forming part of the Shelf
Registration Statement, and any amendment or supplement to such
Prospectus, does not at any time include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(c)(1) The Company shall promptly advise the Purchasers and, in the
case of clause (i), the Holders and, if requested by the Purchasers or any
Holder, confirm such advice in writing:
(i) when the Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
(2) The Company shall promptly advise the Purchasers and the Holders and,
if requested by the Purchasers or any Holder, confirm such advice in writing of:
(i) the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
or the initiation of any proceedings for such purpose;
<PAGE>
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(ii) the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included in the Shelf Registration Statement for sale in any
jurisdiction or the initiation of any proceeding for such purpose;
and
(iii) the happening of any event that requires the making of
any changes in the Shelf Registration Statement or the Prospectus
included therein so that, as of such date, such Shelf Registration
Statement and Prospectus do not contain an untrue statement of a
material fact and do not omit to state a material fact required to
be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under
which they were made) not misleading (which advice shall be
accompanied by an instruction to the Holders to suspend the use of
the Prospectus until the requisite changes have been made).
Each Holder of Registrable Securities agrees, as a consequence of its
inclusion in the Shelf Registration Statement, to cease any use of a Prospectus
in the event the Company provides a notice pursuant to Section 2(c) or this
Section 3(c), and not to use a Prospectus until receipt of notice from the
Company authorizing such Holder to use a Prospectus and, in the case of any
notice delivered pursuant to Section 3.2(c)(iii) above, receipt of an updated
Prospectus.
(d) The Company shall use its reasonable best efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending
the effectiveness of the Shelf Registration Statement at the earliest
possible time.
(e) The Company shall, during the Effectiveness Period, furnish to
each Holder of Registrable Securities included within the coverage of the
Shelf Registration Statement, without charge, at least one copy of the
Shelf Registration Statement and all post-effective amendments thereto,
including financial statements and schedules, and, if the Holder so
requests in writing, all reports, other documents and exhibits (including
those incorporated by reference).
(f) The Company shall, during the Effectiveness Period, deliver to
each Holder of Registrable Securities included within the coverage of the
Shelf Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such
Holder may reasonably request; and the Company consents (except during the
continuance of any event described in Section 3(c)(2)(iii) above) to the
use of the Prospectus and any amendment or supplement thereto by each of
the Holders of Registrable Securities in connection with the offering and
sale of
<PAGE>
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the Registrable Securities covered by the Prospectus and any amendment or
supplement thereto during the Effectiveness Period.
(g) Prior to any offering of Registrable Securities pursuant to the
Shelf Registration Statement, the Company shall use its reasonable best
efforts to (1) register or qualify or cooperate with the Holders of
Registrable Securities included therein and their respective counsel in
connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or "blue sky" laws of
such jurisdictions within the United States as any such Holder may
reasonably request, (2) keep such registrations or qualifications in
effect and comply with such laws so as to permit the continuance of offers
and sales in such jurisdictions for so long as may be necessary to enable
any Holder or underwriter, if any, to complete its distribution of
Registrable Securities pursuant to the Shelf Registration Statement, and
(3) take any and all other actions necessary or advisable to enable the
disposition in such jurisdictions of such Registrable Securities;
provided, however, that in no event shall the Company be obligated to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so qualify but
for this Section 3(g) or (ii) file any general consent to service of
process or become subject to taxation in any jurisdiction where it is not
as of the date hereof so subject.
(h) Unless any Registrable Securities shall be in book-entry only
form, the Company shall cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to
the Shelf Registration Statement free of any restrictive legends and in
such permitted denominations and registered in such names as Holders may
request in connection with the sale of Registrable Securities pursuant to
such Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by paragraph
3(c)(2)(iii) above, the Company shall promptly prepare a post-effective
amendment or supplement to the Shelf Registration Statement or the related
Prospectus, or any document incorporated therein by reference, or file any
other required document so that, as thereafter delivered to purchasers of
the Registrable Securities included therein, the Prospectus will not
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. If the
Company notifies the Holders of the occurrence of any event contemplated
by paragraph 3(c)(2)(iii) above, each Holder agrees, as a consequence of
the inclusion of any of its Registrable Securities in a Shelf Registration
Statement, to suspend the use of the Prospectus until the requisite
changes to the Prospectus have been made.
<PAGE>
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(j) Not later than the effective date of the initial Shelf
Registration Statement, the Company shall provide a CUSIP number for the
Registrable Securities that are debt securities.
(k) The Company shall use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission and shall make
generally available to its security holders or otherwise provide in
accordance with Section 11(a) of the Securities Act as soon as practicable
after the effective date of the applicable Shelf Registration Statement an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act.
(l) Not later than the effective date of the initial Shelf
Registration Statement, the Company shall cause the Indenture to be
qualified under the Trust Indenture Act of 1939, as amended.
(m) The Company shall require each Holder of Registrable Securities
to be sold pursuant to a Shelf Registration Statement to complete and
return to the Company a questionnaire substantially in the form of the
Notice of Registration Statement and Selling Securityholder Questionnaire
(the "Notice and Questionnaire") set forth in Appendix A hereto providing
such information regarding the Holder and the distribution of such
Holder's Registrable Securities as may be required by applicable law or
regulation for inclusion in such Shelf Registration Statement. The Company
shall mail the Notice and Questionnaire to each Holder prior to the filing
of the Shelf Registration Statement. The Company shall include in the
Registration Statement all Registrable Securities which any Holder shall
have elected (each, an "Electing Holder") to include in the Shelf
Registration Statement as specified in a signed and completed Notice and
Questionnaire returned to the Company on or prior to the 60th calendar day
after the date the Notice and Questionnaire is mailed to all Holders (the
"Initial Questionnaire Deadline"). (For purposes of this Agreement, by
electing to include any Registrable Securities in the Shelf Registration
Statement and unless it specifies otherwise an Electing Holder shall be
deemed to have elected also to include in the Shelf Registration Statement
all Stock (and other securities) that may be issued from time to time on
conversion of such Registrable Securities before they are sold pursuant to
the Shelf Registration Statement.) As used herein, the term "Specified
Registrable Securities" shall mean all Registrable Securities that the
Electing Holders have elected to include in the Registration Statement as
provided in the preceding sentences on or prior to the Initial
Questionnaire Deadline. The Company shall include in the Shelf
Registration Statement as of the Effective Time the Specified Registrable
Securities of all Electing Holders who shall have returned a Notice and
Questionnaire on or prior to the date 10 calendar days prior to the
Effective Time and reasonably promptly
<PAGE>
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after receipt of a returned Notice and Questionnaire in the case of all
other Electing Holders. Each person acquiring Specified Registrable
Securities from an Electing Holder at any time (including after the date
on which such Electing Holder provided the Company its Notice and
Questionnaire) shall also be entitled to have such Specified Registrable
Securities included in the Registration Statement for its own account so
long as such person provides the Company with an updated and signed Notice
and Questionnaire. Any such transferee shall be entitled to have its
Specified Registrable Securities included in the Registration Statement
(i) at the Effective Time, if the updated Notice and Questionnaire is
received by the Company on or prior to the date 10 calendar days prior to
the Effective Time and (ii) in all other cases, reasonably promptly after
the Company receives the updated Notice and Questionnaire. In the case of
any Specified Registrable Securities to be included in the Registration
Statement pursuant to clause (ii) of the preceding sentence, the Company
shall effect such inclusion by filing such post-effective amendments to
the Registration Statement or supplements to the Prospectus as may be
required by the Rules and Regulations to permit the resale of such
Specified Registrable Securities for the accounts of the respective
Holders.
(n) In the event of a single underwritten offering as set forth in
Section 6 hereof, the Company shall, if requested, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to a
Shelf Registration Statement, such information as the Managing
Underwriters reasonably agree should be included therein and to which the
Company does not reasonably object and shall make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment.
(o) The Company shall enter into such customary agreements
(including an underwriting agreement in customary form in the event of a
single underwritten offering as set forth in Section 6 hereof) and take
all other appropriate action in order to expedite and facilitate the
registration and disposition of the Registrable Securities, and in
connection therewith, if an underwriting agreement is entered into, cause
the same to contain indemnification provisions and procedures
substantially identical to those set forth in Section 5 hereof with
respect to all parties to be indemnified pursuant to Section 5 hereof.
(p) The Company shall:
(i)(A) make reasonably available for inspection by the Holders
of Registrable Securities to be registered under a Shelf
Registration Statement, any underwriter participating in any
disposition pursuant to
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such Shelf Registration Statement, and any attorney, accountant or
other agent retained by such Holders or any such underwriter all
relevant financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries, and (B) cause
the Company's officers, directors and employees to supply all
information reasonably requested by such Holders or any such
underwriter, attorney, accountant or agent in connection with the
Shelf Registration Statement, in each case, as is customary for
similar due diligence examinations; provided, however, that all
records, information and documents that are designated in writing by
the Company, in good faith, as confidential shall be kept
confidential by such Holders and any such underwriter, attorney,
accountant or agent, unless such disclosure is made in connection
with a court proceeding or required by law, or such records,
information or documents become available to the public generally or
through a third party without an accompanying obligation of
confidentiality and the Company may require that such Holders or any
such underwriter, attorney, accountant and agent execute a customary
confidentiality agreement to the foregoing effect with respect to
such information; and provided further that, if the foregoing
inspection and information gathering would otherwise disrupt the
Company's conduct of its business, such inspection and information
gathering shall, to the greatest extent possible, be coordinated on
behalf of such Holders and the other parties entitled thereto by one
counsel designated by and on behalf of such Holders;
(ii) make such representations and warranties to the Holders
of Registrable Securities registered under the Shelf Registration
Statement and to the Managing Underwriters, if any, in form,
substance and scope as are customarily made by the Company to
underwriters in primary underwritten offerings of equity and
convertible debt securities and covering matters including, but not
limited to, those set forth in the Purchase Agreement;
(iii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters, if
any) addressed to each selling Holder and the underwriters, if any,
covering such matters as are customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such Holders and underwriters (it being
agreed that the matters to be covered by such opinion or written
statement by such counsel delivered in connection with such opinions
shall include in customary form, without limitation, as of the date
of the opinion and as of the effective date of the Shelf
Registration Statement or most recent
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post-effective amendment thereto, as the case may be, the absence
from such Shelf Registration Statement and the Prospectus included
therein, as then amended or supplemented, including the documents
incorporated by reference therein, of an untrue statement of a
material fact or the omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading;
(iv) obtain "cold comfort" letters and updates thereof from
the independent public accountants of the Company (and, if
necessary, from the independent public accountants of any subsidiary
of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be,
included in the Shelf Registration Statement), addressed to each
such Holder of Registrable Securities registered thereunder (if such
holder has provided such letter, representations or documentation,
if any, required for such cold comfort letter to be so addressed)
and the underwriters, in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection
with primary underwritten offerings;
(v) deliver such documents and certificates as may be
reasonably requested by any such Holders and the Managing
Underwriters, if any, including, without limitation, certificates to
evidence compliance with Section 3(i) hereof and with any conditions
contained in the underwriting agreement or other agreements entered
into by the Company.
The foregoing actions set forth in clauses (ii), (iii), (iv), and (v) of
this Section 3(p) shall be applicable only to a single underwritten
offering conducted pursuant to Section 6 hereof and shall be performed at
each closing under any underwritten offering to the extent required
thereunder.
(q) The Company will use its reasonable best efforts to cause the
Stock issuable upon conversion of the Securities to be listed for
quotation on the Nasdaq National Market or other stock exchange or trading
system on which the Stock primarily trades on or prior to the
effectiveness of the initial Shelf Registration Statement hereunder.
(r) In the event that any broker-dealer registered under the
Exchange Act shall be an "Affiliate" (as defined in Rule 2720(b)(i) of the
Rules of Conduct of the National Association of Securities Dealers, Inc.
(the "NASD") (or any successor or analogous provision thereto)) of the
Company
<PAGE>
-12-
or has a "Conflict of Interest" (as defined in Rule 2720(b)(7) of the
Rules of Conduct of the NASD (or any successor an analogous provision
thereto)) and such broker-dealer shall underwrite, participate as a member
of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of such Schedule) of any Registrable
Securities, whether as a holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, assist such broker-dealer in complying with the
requirements of such Schedule, including, without limitation, by (A)
engaging a "qualified independent underwriter" (as defined in such
Schedule) to participate in the preparation of the registration statement
relating to such Registrable Securities, to exercise usual standards of
due diligence in respect thereto and to recommend the public offering
price of such Registrable Securities, (B) indemnifying such qualified
independent underwriter to the extent of the indemnification of
underwriters provided in Section 5 hereof, and (C) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Rules of Fair
Practice of the NASD.
(s) The Company shall use its reasonable best efforts to take all
other steps necessary to effect the registration, offering and sale of the
Registrable Securities covered by the Shelf Registration Statement
contemplated hereby.
4. Registration Expenses. Except as otherwise provided in Section 6, the
Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2, 3 and 6 hereof. In addition, in
the event of an underwritten offering conducted pursuant to Section 6 hereof, or
if in any other event the Company requires that time inspection and information
gathering be coordinated by counsel for the Holders as provided in Section
3(p)(i), the Company shall pay the fees and expenses of a single counsel
selected by the Holders of not less than 25% of the Registrable Securities
included in such underwritten offering (or, in any such other event, included in
the Shelf Registration Statement) to represent them. The Holders participating
in such offering (or, in any such other event, participating in such inspection
and information gathering) shall be responsible, on a pro rata basis based on
the respective amount of their Registrable Securities included in such offering
for all fees and expenses of such counsel in excess of $75,000.
5. Indemnification and Contribution. (a) In connection with any Shelf
Registration Statement, the Company shall indemnify and hold harmless the
Purchasers, each Holder, each underwriter who participates in an offering of
Registrable Securities, each person, if any, who controls any of such parties
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and each of their respective directors, officers, employees,
trustees and agents, against any and all loss, liability, claim, damage and
expense whatsoever, as incurred
<PAGE>
-13-
(including any amounts paid in settlement of any investigation, litigation,
proceeding or claim, joint or several, or incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by any
court or governmental agency or body, commenced or threatened, or any claim
whatsoever), arising out of or based upon, any untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration
Statement (or any amendment thereto) covering Registrable Securities, including
all documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company shall not be liable under this clause (i)
for any settlement of any action effected without its written consent, which
consent shall not be unreasonably withheld; and provided further that this
indemnity shall not apply to any loss, liability, claim, damage or expense to
the extent arising out of (x) an untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by the Purchasers, such Holder or any
underwriter in writing expressly for use in the Shelf Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) or (y) (1) the use of a Prospectus during any period when its use has
been suspended pursuant to Section 2(c) or 3(c)(2) after the Company has
provided written notice of such suspension to the applicable Purchaser, Holder
or underwriter, unless, in the case of suspension pursuant to Section 2(c) or
3(c)(2)(iii), the untrue statement(s) or omission(s) or alleged untrue
statement(s) or omission(s) giving rise to such loss, liability, claim, damage
or expense was (were) not corrected in the Prospectus available for use at the
end of the period of suspension or (2) the use of an outdated Prospectus after
the Company has provided an updated Prospectus correcting the untrue statement
or alleged untrue statement or omission or alleged omission giving rise to the
loss, liability, claim, damage or expense and furnished copies to the applicable
Purchaser, Holder or underwriter. Any amounts advanced by the Company to an
indemnified party pursuant to this Section 5 as a result of such losses shall be
returned to the Company if it shall be finally determined by such a court in a
judgment not subject to appeal or further review that such indemnified party was
not entitled to indemnification by the Company.
(b) Each Holder agrees, as a consequence of the inclusion of any of its
Registrable Securities in a Shelf Registration Statement, severally and not
jointly, to indemnify and hold harmless the Company, the Purchasers, each
underwriter who participates in an offering of Registrable Securities and the
other selling Holders and each of their respective directors, officers
(including each officer of the Company who signed the Shelf Registration
Statement), employees, trustees and agents and
<PAGE>
-14-
each Person, if any, who controls the Company, the Purchasers, any underwriter
or any other selling Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all loss,
liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 5(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Shelf Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such selling Holder expressly
for use in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto); provided, however, that, no
Holder shall be liable for any claims hereunder in excess of the amount of net
proceeds received by such Holder from the sale of Registrable Securities
pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, enclosing a copy of all papers served on such indemnified
party, but failure to so notify an indemnifying party shall not relieve such
indemnifying party of any liability which it may have to the indemnified party
otherwise than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of any such action. If an
indemnifying party so elects within a reasonable time after receipt of such
notice, such indemnifying party, jointly with any other indemnifying party, may
assume the defense of such action with counsel chosen by it and approved by the
indemnified party or parties defendant in such action, provided that if any such
indemnified party reasonably determines that there may be legal defenses
available to such indemnified party which are different from or in addition to
those available to such indemnifying party or that representation of such
indemnifying party and any indemnified party by the same counsel would present a
conflict of interest, then such indemnifying party or parties shall not be
entitled to assume such defense. If an indemnifying party is not entitled to
assume the defense of such action as a result of the proviso to the preceding
sentence, counsel for such indemnifying party shall be entitled to conduct the
defense of such indemnifying party and counsel for each indemnified party or
parties shall be entitled to conduct the defense of such indemnified party or
parties. If an indemnifying party assumes the defense of an action in accordance
with and as permitted by the provisions of this paragraph, such indemnifying
party shall not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such action. In no
event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from its own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
<PAGE>
-15-
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provision provided for in this Section 5 is
for any reason held to be unavailable to an indemnified party although
applicable in accordance with its terms, then each indemnifying party shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by such indemnified
party, as incurred; provided that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person that was not guilty of such
fraudulent misrepresentation. Each such indemnifying party shall contribute to
such aggregate losses, liabilities, claims, damages and expenses of such
indemnified party of the nature contemplated by such indemnity agreement in such
proportion as shall be appropriate to reflect the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, with respect to the statements or omissions which resulted in such loss,
liability, claim, damage or expense, or action in respect thereof, as well as
any other relevant equitable considerations. The relative fault of an
indemnifying party, on the one hand, and of an indemnified party, on the other
hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party, on the one hand, or by or on behalf of such indemnified
party, on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Purchasers and the Holders of the Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this Section
5(d) were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 5(d), each director, officer,
employee, trustee, agent and Person, if any, who controls a Purchaser or Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Purchaser or
Holder, as the case may be, and each director, officer, employee, trustee and
agent of the Company, and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Company. No party shall be
liable for contribution with respect to any action, suit, proceeding or claim
settled without its written consent, which consent shall not be unreasonably
withheld.
6. Underwritten Offering. The Holders of Registrable Securities covered by
the Shelf Registration Statement who desire to do so may sell such Registrable
Securities (in whole or in part at its election) in one underwritten offering,
provided that the Holders of at least 33-1/3% in aggregate principal amount of
the Registrable Securities then covered by the
<PAGE>
-16-
Shelf Registration Statement shall request such an offering and at least such
aggregate principal amount of such securities shall be included in such
offering. Upon receipt of such a request, the Company shall provide all Holders
of Registrable Securities then covered by the Shelf Registration Statement a
written notice of and opportunity to participate in the offering on a pro rata
basis (based on the respective numbers of their Registrable Securities then
covered by the Shelf Registration Statement). In any such underwritten offering,
the investment banker or bankers and manager or managers that will administer
the offering will be selected by, and the underwriting arrangements with respect
thereto will be approved by (including size of the offering but subject to the
preceding sentence) the Holders of a majority of the registrable Securities to
be included in such offering; provided, however, that such investment bankers
and managers and underwriting arrangements must be reasonably satisfactory to
the Company. No Holder may participate in any underwritten offering contemplated
hereby unless such Holder (a) agrees to sell such Holder's Registrable
Securities to be included in accordance with any approved underwriting
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such approved underwriting
arrangements. The Holders participating in any underwritten offering shall be
responsible for any underwriting discounts and commissions and fees and, subject
to Section 4 hereof, expenses of their own counsel. The Company shall pay all
expenses customarily borne by issuers, including but not limited to filing fees,
the fees and disbursements of its counsel and independent public accountants and
any printing expenses incurred in connection with such underwritten offering.
Notwithstanding the foregoing or the provisions of Section 3(n) hereof, upon
receipt of a request from the Managing Underwriter, if any, or a representative
of Holders of a majority of the Registrable Securities to be included in the
underwritten offering to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Board of Directors of the Company shall have determined
in good faith that the Company has a bona fide business reason for such delay.
7. Miscellaneous.
(a) Other Registration Rights. The Company may grant registration rights
that would permit any Person that is a third party the right to piggyback on any
Shelf Registration Statement and in any underwritten offering pursuant to
Section 6 hereof, provided that if the Managing Underwriter, if any, of such
offering notifies the Company and the selling Holders that the total amount of
securities which the selling Holders and the holders of such piggyback rights
intend to include in any Shelf Registration Statement is so large as to
materially threaten the success of such offering (including the price at which
such securities can be sold), then the amount, number or kind of securities to
be offered for the account of holders of such piggyback rights will be reduced
(i) in the case of any registration rights granted by the Company prior to the
date of this Agreement, pro rata with the Registrable Securities based on the
respective amounts of securities included in the Shelf
<PAGE>
-17-
Registration Statement and participating in such underwritten offering, to the
extent necessary to reduce the total amount of securities to be included in such
offering to the amount, number and kind recommended by the Managing Underwriter,
if any and (ii) in the case of any registration rights granted by the Company
after the date of this Agreement, to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount, number and
kind recommended by the Managing Underwriter, if any, prior to any reduction in
the amount of Registrable Securities to be included in such Shelf Registration
Statement.
(b) Amendments and Waivers. This Agreement, including this Section 7(b),
may be amended, and waivers or consents to departures from the provisions hereof
may be given, only by a written instrument duly executed by the Company and
either (i) the Purchasers or (ii) the Holders of a majority in aggregate
principal amount of Registrable Securities that (i) at any time before
effectiveness of the Shelf Registration Statement, are then outstanding and (ii)
at any time after effectiveness, are then covered by the Shelf Registration
Statement; provided that no such amendment, waiver or consent shall adversely
affect the rights and obligations of any person under Section 5 with regard to
securities sold pursuant to the Shelf Registration Statement prior thereto
without such person's consent. Each Holder of Registrable Securities outstanding
at the time of any such amendment, waiver or consent or thereafter shall be
bound by any amendment waiver or consent effected pursuant to this Section 7(b),
whether or not any notice, writing or marking indicating such amendment, waiver
or consent appears on the Registrable Securities or is delivered to such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company pursuant to the Notice and Questionnaire;
(2) if to the Purchasers, initially at the address set forth in
the Purchase Agreement; and
(3) if to the Company, initially at the address set forth in
the Purchase Agreement.
All such notices and communications shall be deemed to have been duly given when
received.
The Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
<PAGE>
-18-
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties and the
Holders, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders of Registrable Securities. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of
Registrable Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect
to any provisions relating to conflicts of laws.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
<PAGE>
-19-
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
UroMed Corporation
By:.
--------------------------------
Name:
Title:
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
Goldman, Sachs & Co.
PaineWebber Incorporated
J.P. Morgan Securities Inc.
By: Goldman, Sachs & Co.
- ---------------------------------
(Goldman, Sachs & Co.)
<PAGE>
Appendix A
UROMED CORPORATION
INSTRUCTION TO DTC PARTICIPANTS
-------------------------------
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE [DATE]
---------------------------
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in the UroMed Corporation (the
"Company") 6% Convertible Subordinated Notes due October 15, 2003 (the "Notes")
are held. The Notes are identified by CUSIP Nos. ______ and _______.
In accordance with the terms of the Registration Rights Agreement, dated
as of October 15, 1996, between the Company and the Purchasers named thereon
(the "Registration Rights Agreement"), the Company is in the process of
registering the Notes under the Securities Act of 1933 for resale by the
beneficial owners thereof. In order to have their Notes included in the
registration statement, the beneficial owners must complete and return the
enclosed Notice of Registration Statement and Selling Securityholder
Questionnaire (the "Notice and Questionnaire). A copy of the Registration Rights
Agreement is attached to the Notice and Questionnaire.
It is important that beneficial owners of the Notes receive a copy of the
enclosed materials as soon as possible as their rights to have the Notes
included in the registration statement depend upon their returning the Notice
and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the Notes
through you. If you require more copies of the enclosed materials or have any
questions pertaining to this matter, please contact [Name, address and telephone
number of contact at the Company].
<PAGE>
A-2-
UroMed Corporation
Notice of Registration Statement
and
Selling Securityholder Questionnaire
------------------------------------
(Date)
UroMed Corporation (the "Company") has filed with the United States
Securities and Exchange Commission (the "Commission") a preliminary registration
statement on Form S-3 (the "Registration Statement") for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities
Act"), of the Company's 6% Convertible Subordinated Notes due October 15, 2003
(CUSIP Nos. ______________ and ___________) (the "Notes"), and the shares of
common stock, no par value, issuable upon conversion thereof (the "Common
Stock", and together with the Notes, the "Registrable Securities"), in
accordance with the terms of the Registration Rights Agreement, dated as of
October 15, 1996 (the "Registration Rights Agreement"), between the Company and
the Purchasers named therein (the "Purchasers"). A copy of the Registration
Rights Agreement is attached hereto. All capitalized terms not otherwise defined
herein shall have the meaning ascribed thereto in the Registration Rights
Agreement.
In order to have Registrable Securities included in the Registration
Statement, this Notice of Registration Statement and Selling Securityholder
Questionnaire ("Notice and Questionnaire") must be completed, executed and
delivered to the Company's counsel at the address set forth herein for receipt
ON OR BEFORE [DEADLINE FOR RESPONSE]. Unless the Company otherwise consents,
beneficial owners of Registrable Securities who do not complete, execute and
return this Notice and Questionnaire by such date (i) will not be named as
selling securityholders in the Registration Statement and related Prospectus and
(ii) may not sell their Registrable Securities pursuant thereto.
Certain legal consequences arise from being named as a selling
securityholder in the Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Registration
Statement and related Prospectus.
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Registration Statement the
Registrable
<PAGE>
A-3-
Securities beneficially owned by it and listed below in Item (3) (unless
otherwise specified under Item 3). The undersigned agrees to be bound with
respect to such Registrable Securities by the terms and conditions of this
Notice and Questionnaire and the Registration Rights Agreement.
The Selling Securityholder hereby undertakes, in accordance with Section 5
of the Registration Rights Agreement, to indemnify and hold harmless the
Company, each Purchaser and the other Selling Securityholders and each of their
respective directors, officers, employees, trustees and agents and each person,
if any, who controls the Company or any Purchaser within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all loss,
liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 5(a) of the Registration Rights Agreement, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with information furnished in writing herein to the Company by
such Selling Securityholder; provided, however, that the Selling Securityholder
shall not be liable for any claims hereunder in excess of the amount of net
proceeds received by such Selling Securityholder from the sale of Registrable
Securities pursuant to the Registration Statement. The undersigned further
undertakes, if applicable, to comply with the provisions of Sections 5(c) and
(d) of the Registration Rights Agreement that are applicable to the undersigned.
The Selling Securityholder agrees, as a consequence of its inclusion in
the Shelf Registration Statement, to cease any use of a Prospectus in the event
the Company provides a notice pursuant to Section 2(c) or Section 3(c) of the
Registration Rights Agreement, and not to use a Prospectus until receipt of
notice from the Company authorizing the Selling Securityholder to use a
Prospectus and, in the case of any notice delivered pursuant to Section
3.2(c)(iii) of the Registration Rights Agreement, receipt of an updated
Prospectus.
Upon any sale of Registrable Securities pursuant to the Registration
Statement under the Securities Act, the Selling Securityholder will be required
to deliver to the Company and Trustee the Notice of Transfer set forth in Annex
1 attached to this Notice and Questionnaire (completed and signed) and hereby
undertakes to do so.
The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
<PAGE>
A-4-
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
- ------------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as in (a)
above) of Registrable Securities Listed in (3) below:
- ------------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not the
same as (b) above) Through Which Registrable Securities Listed in
(3) below are Held:
(2) Address for Notices to Selling Securityholder:
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
Telephone: _____________________
Fax: _____________________
Contact Person: _____________________
(3) Beneficial Ownership of Registrable Securities:
Except as set forth below, the undersigned Selling Securityholder does not
beneficially own any Notes or shares of Common Stock previously issued upon
conversion of any Note.
Principal amount of Notes beneficially owned:_________________
CUSIP # of Notes beneficially owned:_________________________
Number of shares of Common Stock beneficially owned and issued to date
upon conversion of Notes (if any):_____________________
<PAGE>
A-5-
(4) Other Shares of Common Stock or Other Securities of the Company Owned
by the Selling Securityholder:
Except as set forth below, and under Item (3) above, the undersigned
Selling Securityholder is not the beneficial or registered owner of any shares
of Common Stock or any other securities of the Company.
State any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any of
its affiliates, officers, directors or principal equity holders (5% or more) has
held any position or office or has had any other material relationship with the
Company (or its predecessors or affiliates) during the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder intends
to distribute the Registrable Securities listed above in Item (3) only as
follows: Such Registrable Securities may be sold from time to time directly by
the undersigned Selling Securityholder or, alternatively, through underwriters,
broker-dealers or agents. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale, or at negotiated prices. Such
sales may be effected in transactions (which may involve crosses or block
transactions) (i) on any national securities exchange or quotation service on
which the Registered Securities may be listed or quoted at the time of sale,
(ii) in the over-the-counter market, (iii) in transactions otherwise than on
such exchanges or services or in the over-the-counter market, or (iv) through
the writing of options. In connection with sales of the Registrable Securities
or otherwise, the Selling Securityholder may enter into hedging transactions
with broker-dealers, which may in turn engage in short sales of the Registrable
Securities in the course of hedging the positions they assume. The Selling
Securityholder may also sell Registrable Securities short and deliver
Registrable Securities to close out such short positions, or loan or pledge
Registrable Securities to broker-dealers that in turn may sell such securities.
State any exceptions here:
<PAGE>
A-6-
Note: In no event will such method(s) of distribution take the
form of an underwritten offering of the Registrable Securities
without the prior agreement of the Company.
The Selling Securityholder acknowledges that it understands its obligation
to comply with the provisions of the Exchange Act, and the rules thereunder,
relating to stock manipulation, particularly Rule 10b-6 thereunder (or any
successor rules), in connection with the offering of its Registrable Securities
covered by the Registration Statement. The Selling Securityholder agrees that
neither it nor any person acting on its behalf, will bid for, or purchase any
securities of the Company in violation of such provisions, so long as the
Registrable Securities beneficially owned by it are being offered pursuant to
the Registration Statement.
In the event that the Selling Securityholder transfers all or any portion
of the Registrable Securities listed in Item (3) above after the date on which
such information is provided to the Company, the Selling Securityholder agrees
to notify the transferee(s) at the time of the transfer of the transferee(s)
rights and obligations under this Notice and Questionnaire and the Registration
Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure of
the information contained herein in its answers to Items (1) through (6) above
and the inclusion of such information in the Registration Statement and related
Prospectus. The Selling Securityholder understands that such information will be
relied upon by the Company in connection with the preparation of the
Registration Statement and related Prospectus.
In accordance with the Selling Securityholder's obligation under Section
3(m) of the Registration Rights Agreement to provide such information as may be
required by law for inclusion in the Registration Statement, the Selling
Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Registration Statement remains in effect. All
notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing, by hand-delivery, first-class mail, or air courier guaranteeing
overnight delivery as follows:
(i) To the Company:
UroMed Corporation
64 A Street
Needham, MA 02194
Attention: Chief Financial Officer
(ii) With a copy to:
<PAGE>
A-7-
Bingham, Dana & Gould LLP
150 Federal Street
Boston, MA 02110
Attention: John R. Utzschneider
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company's counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
Dated:_________________
-------------------------------------------
Selling Securityholder
(Print/type full legal name of beneficial
owner of Registrable Securities)
By:________________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:
Bingham, Dana & Gould LLP
150 Federal Street
Boston, MA 02110
Attention: John R. Utzschneider
<PAGE>
ANNEX 1
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
State Street Bank and Trust Company, as Trustee
Two International Place 4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Re: UroMed Corporation (the "Company")
6% Convertible Subordinated Notes
due October 15, 2003 (the "Notes")
Dear Sirs:
Please be advised that _____________________ has transferred
$_________________ aggregate principal amount of the above-referenced Notes or
____________ shares of the Company's common stock, no par value, issued on
conversion of Notes ("Stock") pursuant to the Registration Statement on Form S-3
(File No. 333-_____) filed by the Company.
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Notes
or Stock is named as a Selling Securityholder in the Prospectus dated
______________, ____ or in amendments or supplements thereto, and that the
aggregate principal amount of the Notes or number of shares of Stock transferred
are [a portion of] the Notes or Stock listed in such Prospectus as amended or
supplemented opposite such owner's name.
Dated:
Very truly yours,
------------------------
(Name)
By:_________________________
(Authorized Signature)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE BALANCE SHEET AND
THE STATEMENT OF OPERATIONS FILED AS PART OF THE QUARTERLY REPORT ON FORM 10Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM
10Q.
</LEGEND>
<CIK> 0000917821
<NAME> UROMED-CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 9,015
<SECURITIES> 33,850
<RECEIVABLES> 224
<ALLOWANCES> 35
<INVENTORY> 309
<CURRENT-ASSETS> 44,070
<PP&E> 4,380
<DEPRECIATION> 1,134
<TOTAL-ASSETS> 47,652
<CURRENT-LIABILITIES> 6,357
<BONDS> 0
0
0
<COMMON> 106,664
<OTHER-SE> (65,368)
<TOTAL-LIABILITY-AND-EQUITY> 47,652
<SALES> 800
<TOTAL-REVENUES> 800
<CGS> 1,203
<TOTAL-COSTS> 6,850
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,444)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,444)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,444)
<EPS-PRIMARY> (0.21)
<EPS-DILUTED> (0.21)
</TABLE>
