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MAFCO CONSOLIDATED GROUP INC.
Issuer
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VALUE SUPPORT RIGHTS AGREEMENT
Dated as of November 25, 1996
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AMERICAN STOCK TRANSFER & TRUST COMPANY
Trustee
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TABLE OF CONTENTS(1)
Page
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PARTIES................................................................... 1
RECITALS.................................................................. 1
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions......................................... 2
Section 1.2 Compliance and Opinions............................. 13
Section 1.3 Form of Documents Delivered to Trustee.............. 15
Section 1.4 Acts of Holders..................................... 16
Section 1.5 Notices, etc., to Trustee and Company............... 18
Section 1.6 Notice to Holders; Waiver........................... 18
Section 1.7 Conflict with Trust Indenture Act................... 19
Section 1.8 Effect of Headings and Table of Contents............ 19
Section 1.9 Successors and Assigns.............................. 19
Section 1.10 Benefits of Agreement.............................. 20
Section 1.11 Governing Law...................................... 20
Section 1.12 Legal Holidays..................................... 20
Section 1.13 Separability Clause................................ 20
Section 1.14 No Recourse Against Others......................... 20
ARTICLE 2
SECURITY FORMS
Section 2.1 Forms Generally..................................... 21
Section 2.2 Form of Face of Security............................ 22
Section 2.3 Form of Reverse of Security......................... 24
Section 2.4 Form of Trustee's Certificate of
Authentication................................. 32
ARTICLE 3
THE SECURITIES
Section 3.1 Title and Terms..................................... 33
Section 3.2 Registrable Form.................................... 40
Section 3.3 Execution, Authentication, Delivery and
Dating......................................... 40
Section 3.4 Temporary Securities................................ 41
Section 3.5 Registration, Registration of Transfer
and Exchange................................... 42
Section 3.6 Mutilated, Destroyed, Lost and Stolen
Securities..................................... 44
Section 3.7 Presentation of VSR Certificate..................... 45
Section 3.8 Persons Deemed Owners............................... 46
Section 3.9 Cancellation........................................ 46
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1 Note: This table of contents shall not, for any purpose, be deemed
to be a part of this Agreement.
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ARTICLE 4
THE TRUSTEE
Section 4.1 Certain Duties and Responsibilities................. 47
Section 4.2 Certain Rights of Trustee........................... 49
Section 4.3 Not Responsible for Recitals or Issuance
of Securities.................................. 51
Section 4.4 May Hold Securities................................. 51
Section 4.5 Money Held in Trust................................. 51
Section 4.6 Compensation and Reimbursement...................... 51
Section 4.7 Disqualification; Conflicting Interests............. 53
Section 4.8 Corporate Trustee Required; Eligibility............. 53
Section 4.9 Resignation and Removal; Appointment of
Successor...................................... 53
Section 4.10 Acceptance of Appointment of Successor............. 56
Section 4.11 Merger, Conversion, Consolidation or
Succession to Business......................... 56
Section 4.12 Preferential Collection of Claims
Against Company................................ 57
ARTICLE 5
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 5.1 Company to Furnish Trustee Names and
Addresses of Holders........................... 58
Section 5.2 Preservation of Information; Communications
to Holders..................................... 58
Section 5.3 Reports by Trustee.................................. 59
Section 5.4 Reports by Company.................................. 59
ARTICLE 6
AMENDMENTS
Section 6.1 Amendments Without Consent of Holders............... 60
Section 6.2 Amendments with Consent of Holders.................. 62
Section 6.3 Execution of Amendments............................. 63
Section 6.4 Effect of Amendments; Notice to Holders............. 64
Section 6.5 Conformity with Trust Indenture Act................. 64
Section 6.6 Reference in Securities to Amendments............... 64
ARTICLE 7
COVENANTS
Section 7.1 Payment of Amounts, if any, to Holders.............. 65
Section 7.2 Maintenance of Office or Agency..................... 65
Section 7.3 Money for Security Payments to Be Held
in Trust....................................... 67
Section 7.4 Certain Purchases and Sales......................... 68
Section 7.5 Listing of Securities............................... 69
Section 7.6 Registration of Debt Securities; TIA................ 69
Section 7.7 Minimum Principal Amount of Debt Securities......... 69
Section 7.8 Manipulative Transactions........................... 70
Section 7.9 Statement as to Compliance.......................... 70
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Section 7.10 Notice of Default.................................. 71
ARTICLE 8
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT
Section 8.1 Event of Default Defined; Acceleration
of Maturity; Waiver of Default................. 71
Section 8.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt......................... 74
Section 8.3 Application of Proceeds............................. 78
Section 8.4 Suits for Enforcement............................... 79
Section 8.5 Restoration of Rights on Abandonment of
Proceedings.................................... 80
Section 8.6 Limitations on Suits by Holders..................... 80
Section 8.7 Unconditional Right of Holders to
Institute Certain Suits........................ 81
Section 8.8 Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default.............. 82
Section 8.9 Control by Holders.................................. 82
Section 8.10 Waiver of Past Defaults............................ 83
Section 8.11 Trustee to Give Notice of Default, But
May Withhold in Certain Circumstances.......... 84
Section 8.12 Right of Court to Require Filing of
Undertaking to Pay Costs....................... 85
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on
Certain Terms.................................. 85
Section 9.2 Successor Person Substituted........................ 86
Section 9.3 Opinion of Counsel to Trustee....................... 87
Exhibit A - Terms of Indenture
iii
Reconciliation and tie between Trust Indenture Act of 1939 and Value Support
Rights Agreement, dated as of November 25, 1996.
Trust Indenture Act Section Agreement Section
--------------------------- -----------------
ss.310 (a)(1).......................................... 4.9
(a)(2).......................................... 4.9
(a)(3).......................................... Not Applicable
(a)(4).......................................... Not Applicable
(b)............................................. 4.7, 4.9
ss.311 (a)............................................. 4.13(a)
(b)............................................. 4.13(b)
(b)(2).......................................... 5.3(a)(2), 5.3(b)
ss.312 (a)............................................. 5.1, 5.2(a)
(b)............................................. 5.2(b)
(c)............................................. 5.2(c)
ss.313 (a)............................................. 5.3(a)
(b)............................................. 5.3(b)
(c)............................................. 5.3(a), 5.3(b)
(d)............................................. 5.3(c)
ss.314 (a)............................................. 5.4
(b)............................................. Not Applicable
(c)(1).......................................... 1.2
(c)(2).......................................... 1.2
(c)(3).......................................... Not Applicable
(d)............................................. Not Applicable
(e)............................................. 1.2
ss.315 (a)............................................. 4.1(a)
(b)............................................. 8.11, 5.3(a)(6)
(c)............................................. 4.1(b)
(d)............................................. 4.1(c)
(d)(1).......................................... 4.1(a)(1)
(d)(2).......................................... 4.1(c)(2)
(d)(3).......................................... 4.1(c)(3)
(e)............................................. 8.1, 8.12
ss.316 (a)............................................. 1.1
(a)(1)(A)....................................... 8.9
(a)(1)(B)....................................... 8.10
(a)(2).......................................... Not Applicable
(b)............................................. 8.7
ss.317(a)(1)............................................. 8.2
(a)(2).......................................... 8.2
(b)............................................. 7.3
ss.318(a) ............................................... 1.7
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Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Agreement.
iv
INDEX OF DEFINED TERMS
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Term Where Defined
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Accounting Firm............................................... ss. 3.1(c)
Act........................................................... ss. 1.4
Adjustment Event.............................................. ss. 3.1(k)
Affiliate..................................................... ss. 1.1
Agreement..................................................... ss. 1.1
Applicable Number............................................. ss. 1.1
Authorized Newspaper.......................................... ss. 1.1
Base Amount................................................... ss. 1.1
big six....................................................... ss. 3.1(c)
Board of Directors............................................ ss. 1.1
Board Resolution.............................................. ss. 1.1
Business Day.................................................. ss. 1.1
Change of Control............................................. ss. 1.1
Commission.................................................... ss. 1.1
Company....................................................... ss. 1.1
Company Order................................................. ss. 1.1
Company Request............................................... ss. 1.1
control, controlling, controlled.............................. ss. 1.1
Corporate Trust Office........................................ ss. 1.1
default or Defaults........................................... ss. 8.11
Default Payment Amount........................................ ss. 1.1
Default Payment Date.......................................... ss. 1.1
Default Interest Rate......................................... ss. 1.1
Designated Options............................................ ss. 1.1
Distribution Amount........................................... ss. 1.1
Effective Date................................................ ss. 1.1
Event of Default.............................................. ss. 8.1
Exchange Act.................................................. ss. 5.4(a)(i)
Exchange Act Documents........................................ ss. 1.1
generally accepted accounting principles...................... ss. 1.1
Holder........................................................ ss. 1.1
indemnitee.................................................... ss. 4.6(c)
Indenture..................................................... Exhibit A
Independent Financial Expert.................................. ss. 1.1
Market Price.................................................. ss. 1.1
Maturity Date................................................. ss. 1.1
Minimum Principal Per Holder.................................. ss. 7.7
NASDAQ........................................................ ss. 1.1
NMS/NASDAQ.................................................... ss. 1.1
Notes......................................................... Exhibit A
Notice of Default............................................. ss. 8.1(b)
Officers' Certificate......................................... ss. 1.1
Opinion of Counsel............................................ ss. 1.1
Optional Call Date............................................ ss. 1.1
Optional Call Payment Amount.................................. ss. 3.1(d)
Optional Call Payment Date.................................... ss. 3.1(d)
Outstanding................................................... ss. 1.1
Owed Principal Amount......................................... ss. 7.7
Paying Agent.................................................. ss. 1.1
Payment Notes................................................. ss. 7.6
PCT........................................................... Recitals
PCT Common Stock.............................................. ss. 1.1
Person........................................................ ss. 1.1
Prohibited Activity........................................... ss. 1.1
Purchase Agreement............................................ Recitals
Purchaser..................................................... Recitals
Redemption Event.............................................. ss. 3.1(h)
Redemption Notice Date........................................ ss. 3.1(h)
Redemption Payment Date....................................... ss. 3.1(h)
Redemption Price.............................................. ss. 3.1(h)
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Redemption Transaction........................................ ss. 3.1(h)
Responsible Officer........................................... ss. 1.1
Securities.................................................... Recitals
Security Register............................................. ss. 3.5
Security Registrar............................................ ss. 3.5
Subsidiary.................................................... ss. 1.1
Total Disposition............................................. ss. 1.1
Total Disposition Amount...................................... ss. 1.1
Total Disposition Payment Date................................ ss. 3.1(e)
Trust Indenture Act........................................... ss. 1.1
Trustee....................................................... ss. 3.1
Value Support Rights.......................................... ss. 3.1
vice president................................................ ss. 1.1
Voting Securities............................................. ss. 1.1
VSR Certificate............................................... ss. 1.1
VSRs.......................................................... Recitals
30-Day Average Market Price................................... ss. 2.3
vi
VALUE SUPPORT RIGHTS AGREEMENT, dated as of November 25, 1996, by and
between MAFCO CONSOLIDATED GROUP INC., a Delaware corporation (the "Company"),
and AMERICAN STOCK TRANSFER & TRUST COMPANY, as trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the creation of an issue of
value support rights (the "Securities" or "VSRs"), of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Agreement;
WHEREAS, pursuant to the Stock and VSR Purchase Agreement dated as of
October 23, 1996 (the "Purchase Agreement") by and among the Company, Power
Control Technologies, Inc., a Delaware corporation ("PCT"), and PCT
International Holdings, Inc., a Delaware corporation and wholly owned
subsidiary of PCT ("Purchaser"), the Company agreed to sell to Purchaser all of
the outstanding common stock of Flavors Holdings Inc., a Delaware corporation,
and the Company agreed to issue to Purchaser the Securities;
WHEREAS, pursuant to the Purchase Agreement, Purchaser and PCT are
obligated to deliver the Securities to all holders of PCT Common Stock (as
defined herein) and preferred stock, par value $.01 per share, of PCT; and
WHEREAS, all things necessary have been done to make the Securities,
when executed by the Company and authenticated and delivered hereunder, the
valid obligations of the Company and to make this Agreement a valid agreement
of the Company, all in accordance with their and its terms.
NOW, THEREFORE, for and in consideration of the premises
and the consummation of the transactions referred to above, it is covenanted
and agreed, for the equal and proportionate benefit of all Holders (as defined
below) of the Securities, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;
(b) all accounting terms used herein and not expressly defined
herein shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted as of the date of this Agreement;
(c) all other terms used herein which are defined in the Trust
Indenture Act (as defined herein), either directly or by reference therein,
have the meanings assigned to them therein; and
(d) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"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
2
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.
"Agreement" means this instrument as originally executed and as it may
from time to time be supplemented or amended pursuant to the applicable
provisions hereof.
"Applicable Number", initially shall be equal to one, subject to
adjustment in accordance with Section 3.1(k).
"Authorized Newspaper" means The Wall Street Journal (Eastern
Edition), or if The Wall Street Journal (Eastern Edition) shall cease to be
published, or, if the publication or general circulation of The Wall Street
Journal (Eastern Edition) shall be suspended for whatever reason, such other
English language newspaper of general circulation in The City of New York, New
York as is selected by the Company.
"Base Amount" means, as of any date of determination, the excess
(rounded to the nearest $.01) of (a)(x) $10.25, if the date of determination
occurs on or before January 1, 1998, or (y) $11.00, if the date of
determination occurs after January 1, 1998, over (b) the Distribution Amount
(as defined herein).
"Board of Directors" means the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company, to have been duly adopted
by the Board of Directors of the Company and to be in full force and effect on
the date of such certification,
3
and delivered to the Trustee.
"Business Day" means any day (other than a Saturday or a Sunday) on
which banking institutions in The City of New York, New York are not authorized
or obligated by law or executive order to close and, if the VSRs are listed on
a national securities exchange, such exchange is open for trading.
"Change of Control" shall mean, with respect to any specified Person,
the occurrence of one or more of the following events: (i) a Person or entity
or a group of Persons or entities acting in concert as a partnership, limited
partnership, syndicate or other group (within the meaning of Rule 13d-3 under
the Exchange Act) shall become the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) of shares representing 50% or more of the voting
power of the outstanding shares of voting stock of such specified Person; (ii)
such specified Person or any subsidiary of such specified Person shall merge or
consolidate with any other Person and after giving effect to such merger or
consolidation the holders of the voting stock of such specified Person
immediately prior thereto will own shares representing less than 50% of the
voting power of the voting stock of such specified Person or its ultimate
parent; (iii) a sale or other disposition of all or substantially all of the
assets of such specified Person; (iv) the issuance of shares of voting stock by
such specified Person which would result in the number of shares of voting
stock of such specified Person outstanding after such issuance being equal to
or in excess of 150% of the number of shares of voting stock of such specified
Person outstanding as of the Effective Date (subject to appropriate adjustment
in the event of a stock split, stock divi-
4
dend, recapitalization or other similar event applicable to shares of voting
stock following the Effective Date); and (v) if such specified Person is PCT,
individuals who would constitute a majority of the nominees to be elected to
the Board of Directors of PCT at any meeting of stockholders or by written
consent (without regard to any members of the Board of Directors elected
pursuant to the terms of any class or series of preferred stock of PCT) shall
be elected to the Board of Directors where the election or nomination for
election by PCT's stockholders of such directors was not approved by a vote of
at least a majority of the directors in office immediately prior to such
election.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act (as defined herein),
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.
"Company" means the Person (as defined herein) named as the "Company"
in the first paragraph of this Agreement, until a successor Person shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter "Company" shall mean such successor Person. To the extent necessary
to comply with the requirements of the provisions of Trust Indenture Act ▇▇.▇▇.
310 through 317 as they are applicable to the Company, the term "Company" shall
include any other obligor with respect to the Securities for the purposes of
complying with such provisions.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by the chairman
5
of the Board of Directors or the president or any vice president, the
controller or assistant controller and the treasurer or assistant treasurer or
the secretary or any assistant secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Agreement is
located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Office of the General Counsel.
"Default Payment Amount" means, as of a Default Payment Date (as
defined herein), an amount, if any, determined by the Accounting Firm, equal to
the lesser of (i) the excess, if any, of (x) the Base Amount determined as of
such Default Payment Date over (y) the 30-Day Average Market Price determined
as of such Default Payment Date and (ii) $3.25.
"Default Interest Rate" means 8.46% per annum.
"Default Payment Date" means the date upon which the Securities become
due and payable pursuant to Section 8.1.
"Distribution Amount" means, as of any date of determination, the
sum of (i) the value of all cash dividends or other cash distributions declared
and paid with respect to the Applicable Number of shares of PCT Common Stock,
(ii) all cash received by a holder of PCT Common Stock with respect to the
Applicable Number of shares of PCT Common Stock as consideration in a merger,
consolidation or other business combination, (iii) the fair market value, as
determined by the Independent Financial Expert, of all dividends or other
distributions consisting of property or assets (other than cash, the Securities
or other securities, but including any rights,
6
warrants, options to purchase Securities or other securities that expire prior
to an Optional Call Date or the Maturity Date, as the case may be
(collectively, "Designated Options")), declared and paid with respect to the
Applicable Number of shares of PCT Common Stock and (iv) the fair market value,
as determined by the Independent Financial Expert, of all consideration
consisting of property or assets (other than cash, the Securities or other
securities, but including Designated Options) received by a holder of PCT
Common Stock with respect to the Applicable Number of shares of PCT Common
Stock as consideration in a merger, consolidation or other business
combination, in all such cases from the Effective Date to such date of
determination.
For the purposes of this definition, (x) the amount of dividends
declared and paid and the amount of consideration received with respect to the
Applicable Number of shares of PCT Common Stock shall include dividends
declared and paid and consideration received with respect to any securities
paid as dividends or received as consideration with respect to the Applicable
Number of shares of PCT Common Stock and (y) the fair market value of any
Designated Option, as of any date of determination, shall equal the excess, if
any, of the average of the Market Prices of the security underlying such
Designated Option for the 30 consecutive trading days ended on the Business Day
immediately prior to such date of determination (or if the underlying security
no longer exists, for the 30 consecutive trading days ended on the Business Day
immediately prior to the date of the transaction as a result of which such
security ceased to exist) over the exercise price therefor provided in such
Designated Option; provided that, if on the date any such Designated Option
7
expired, the Market Price of the security underlying such Designated Option was
less than the exercise price therefor provided in such Designated Option, the
fair market value of such Designated Option shall equal zero.
"Effective Date" means November 30, 1996.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Independent Financial Expert" means a nationally recognized
investment banking firm selected by the Company, that does not have a direct or
indirect ownership interest in the Company or any of its Affiliates and that at
the time it is called upon to give independent financial advice to the Company,
is not (and none of whose directors, officers or Affiliates is) a director or
officer of the Company or any of its Affiliates; provided, that,
notwithstanding the foregoing, no such investment banking firm shall be
disqualified from serving as an Independent Financial Expert solely by reason
of its ownership, in the ordinary course of business, for its own account or
for the account of any customer of securities of the Company or any Affiliate
of the Company.
"Market Price" means, as of any date of determination, for any
security, the last reported sale price as reported on the principal national
securities exchange on which such security is then listed, or, if (i) such
security is not listed on a national securities exchange or (ii) such security
is listed on a national securities exchange but the majority of the trading
volume with respect to such security is effected on the NMS/NASDAQ, the last
8
reported sale price as reported on the NMS/NASDAQ, or, if such security is not
listed on a national securities exchange and is not quoted on NMS/NASDAQ the
average of the highest reported bid and lowest reported asked quotation on the
NASDAQ or, if such security is not listed on a national securities exchange and
is not quoted by NMS/NASDAQ or NASDAQ but is traded in the over-the-counter
market, the fair market value as determined by an Independent Financial Expert.
"Maturity Date" means January 1, 1999.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
"NMS/NASDAQ" means the National Market System of NASDAQ.
"Officers' Certificate," when used with respect to the Company means a
certificate signed by the chairman of the Board of Directors or the president
or any vice president, the controller or assistant controller and the treasurer
or assistant treasurer or the secretary or any assistant secretary of the
Company delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company.
"Optional Call Date" means each April 1, July 1, October 1 and January
1 from and including April 1, 1997 to and including October 1, 1998.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Agreement, except:
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
9
(b) From and after the earliest of the Default Payment Date, the
Total Disposition Payment Date, an Optional Call Date or the Maturity Date,
Securities for the payment 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; and
(c) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Agreement, other than any such Securities in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands the Securities
are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
Outstanding Securities have given any request, demand, direction, consent or
waiver hereunder, Securities owned by the Company or any Affiliate of the
Company, whether held as treasury stock or otherwise, 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, direction, consent
or waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded.
"PCT Common Stock" means the common stock, par value $.01 per share,
of PCT.
10
"Paying Agent" means any Person authorized by the Company to pay the
amount determined pursuant to Section 3.1, if any, on any Securities on behalf
of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
"Prohibited Activity" means, with respect to any period, any
acquisition or disposition in open market transactions, private transactions or
otherwise, of (i) any shares of PCT Common Stock, (ii) any securities
convertible into or exchangeable for shares of PCT Common Stock or (iii) any
securities which holders of PCT Common Stock have received with respect to
their shares of PCT Common Stock, whether as a dividend or distribution or in
connection with a merger, consolidation or otherwise (other than, in each case,
(w) shares of PCT Common Stock acquired on behalf of any 401k plan established
for PCT and its subsidiaries to satisfy participant directions and related
company matching obligations, (x) shares issued or acquired pursuant to
employee stock options granted to directors, officers or employees in the
ordinary course of business prior to the first day of such period, (y) sales or
other dispositions of shares by directors or officers, or (z) acquisitions of
up to an aggregate of 25,000 shares of PCT Common Stock in the open market by
directors or officers of PCT).
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office and also means, with respect to
any particular corporate trust matter, any other officer of the Trustee to whom
such matter is referred
11
because of his knowledge of and familiarity with the particular subject.
"Subsidiary" means each Person more than 50% of the outstanding Voting
Securities of which is owned, directly or indirectly, by the Company and/or one
or more Subsidiaries.
"30-Day Average Market Price" means, as of any date of determination,
the average of the Market Price of the Applicable Number of shares of PCT
Common Stock for the 30 consecutive trading days ended on the Business Day
immediately prior to such date of determination. For purposes of this
definition, the Market Price of the Applicable Number of shares of PCT Common
Stock shall (following such receipt) include the Market Price of any securities
(other than the Securities) which shall have been received by a holder of PCT
Common Stock with respect to the Applicable Number of shares of PCT Common
Stock from the Effective Date to the date of determination, whether as a
dividend or other distribution or in connection with a merger, consolidation or
other business combination or a reclassification of PCT Common Stock.
"Total Disposition" means (i) one or more mergers, consolidations or
other business combinations, involving PCT after giving effect to which no
shares of PCT Common Stock shall remain outstanding or registered under the
Exchange Act, (ii) a sale, transfer or other disposition in one or a series of
transactions, of all or substantially all of the assets of PCT, or (iii) a
reclassification of PCT Common Stock as the capital stock of any other Person
(other than an Affiliate of PCT).
"Total Disposition Amount" means, the sum of the fair market value, as
determined by an Independent Financial Expert, of
12
(A) the consideration, if any, received with respect to the Applicable Number
of shares of PCT Common Stock by the holder thereof as a result of such Total
Disposition, or (B) if an election of the type of consideration to be received
by the holders of PCT Common Stock is made, the consideration selected by a
majority of such stockholders (and assuming such holder did not exercise any
right of appraisal granted under law).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Agreement, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Trustee" shall mean such successor Trustee.
"VSR Certificate" means a certificate representing any of the VSRs.
"vice president" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title of "vice president."
"Voting Securities" means securities having ordinary voting power to
elect a majority of the directors irrespective of whether or not stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency.
Section 1.2 Compliance and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Agreement,
13
the Company shall furnish to the Trustee an Officers' Certificate stating that,
in the opinion of the ▇▇▇▇▇▇, all conditions precedent, if any, provided for in
this Agreement 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 Agreement 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 Agreement shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) 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;
(c) a statement that, in the opinion of each such individual, he
or she 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
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
14
Section 1.3 Form of Documents Delivered to 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. 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.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company. Any certificate or opinion of any
independent firm of public accountants filed with the Trustee shall contain a
statement that such firm is independent.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may,
15
but need not, be consolidated and form one instrument.
Section 1.4 Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Agreement and (subject to Section 4.1) conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section.
The Company may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Agreement. If not set by the Company prior to the first
solicitation of a Holder of Securities made by any Person in respect of any
such action, or, in the case of any such vote, prior to such vote, the record
date for such action shall be the later of 10 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee pursuant to Section 5.1 of this Agreement prior to
such solicitation. If a record date is fixed, those Persons who were Holders of
Securities at such
16
record date (or their duly designated proxies), and only those Persons, shall
be entitled to take such action by vote or consent or, except with respect to
clause (d) below, to revoke any vote or consent previously given, whether or
not such Persons continue to be Holders after such record date. No such vote or
consent shall be valid or effective for more than 120 days after such record
date.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register. Neither the Company nor the Trustee nor any Agent of the Company or
the Trustee shall be affected by any notice to the contrary.
(d) At any time prior to (but not after) the evidencing to the
Trustee, as provided in this Section 1.4, of the taking of any action by the
Holders of the Securities specified in this Agreement in connection with such
action, any Holder of a Security the serial number of which is shown by the
evidence to be included among the serial numbers of the Securities the Holders
of which have consented to such action may, by filing written notice at the
Corporate Trust Office and upon proof of holding as provided in this Section
1.4, revoke such action so far as concerns such Security. Any request, demand,
authorization, direction, notice, consent, waiver or other action by the Holder
of any Security shall bind every future Holder of the same Security or the
Holder of every Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, suffered or
omitted to be done by the Trustee, any Paying Agent or
17
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
Section 1.5 Notices, etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed, in
writing, to or with the Trustee at American Stock Transfer & Trust Company, ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Office of the
General Counsel; or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class
postage prepaid, to the Company addressed to it at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, or at any other address
previously furnished in writing to the Trustee by the Company.
Section 1.6 Notice to Holders; Waiver.
Where this Agreement 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, and not earlier than the earliest date, prescribed for
the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any
18
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Agreement
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 mail notice of any
event as required by any provision of this Agreement, then any method of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.7 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Agreement by any of
the provisions of the Trust Indenture Act, such required provision shall
control.
Section 1.8 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.9 Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
19
Section 1.10 Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Agreement or under any covenant or
provision herein contained, all such covenants and provisions being for sole
benefit of the parties hereto and their successors and of the Holders.
Section 1.11 Governing Law.
This Agreement and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
Section 1.12 Legal Holidays.
In the event that an Optional Call Date, the Maturity Date, the Total
Disposition Payment Date or the Default Payment Date, as the case may be, shall
not be a Business Day, then (notwithstanding any provision of this Agreement or
the Securities to the contrary) payment on the Securities need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on an Optional Call Date, the Maturity Date, the
Total Disposition Payment Date or the Default Payment Date, as the case may be.
Section 1.13 Separability Clause.
In case any provision in this Agreement or in the VSRs 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 1.14 No Recourse Against Others.
A director, officer, employee or stockholder, as such,
20
of the Company or the Trustee shall not have any liability for any obligations
of the Company or the Trustee under the Securities or the Agreement or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
ARTICLE 2
SECURITY FORMS
Section 2.1 Forms Generally.
The Securities and the Trustee's certificate of authentication 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 Agreement and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may be
required by law or any rule or regulation pursuant thereto, all as may be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Security.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or produced by any combination of these methods or
may be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
21
Section 2.2 Form of Face of Security.
MAFCO CONSOLIDATED GROUP INC.
No. _____ Certificate for ___ Value Support Rights
This Certificate expires on January 1, 1999 unless redeemed or
otherwise terminated.
This certifies that _______________, or registered assigns (the
"Holder"), is the registered holder of the number of Value Support Rights
("VSRs") set forth above. Each VSR entitles the Holder, subject to the
provisions contained herein and in the Agreement referred to on the reverse
hereof, to a payment from Mafco Consolidated Group Inc., a Delaware corporation
(the "Company"), in an amount determined pursuant to the provisions set forth
on the reverse hereof and as more fully described in the Agreement. Such
payment, if any, shall be made on the Optional Call Payment Date, the Maturity
Date, the Redemption Payment Date upon a redemption, the Default Payment Date
upon the occurrence of an Event of Default or the Total Disposition Payment
Date upon the occurrence of a Total Disposition.
Payment of any amounts pursuant to this VSR Certificate shall be made
only upon presentation by the Holder hereof, at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of
New York, and at any other office or agency maintained by the Company for such
purpose in such coin or currency of the United States of America as at the time
is legal tender for the payment of public and private debts. However, the
Company may pay such amounts by its check payable in such money, or as provided
on the reverse hereof. American Stock Transfer & Trust Company has been
appointed as paying agent in the Borough of Manhattan, the City of New York.
Reference is hereby made to the further provisions of this VSR
Certificate 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 duly executed
by the Trustee referred to on the reverse hereof by manual signature, this VSR
Certificate shall not be entitled to any benefit under the Agreement, or be
valid or obligatory for any purpose.
22
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: MAFCO CONSOLIDATED
GROUP INC.
By
---------------------------
Attest:
----------------------------- [SEAL]
Authorized Signature
23
Section 2.3 Form of Reverse of Security.
This VSR Certificate is issued under and in accordance with the Value
Support Rights Agreement, dated as of November 25, 1996 (the "Agreement"),
between the Company and American Stock Transfer & Trust Company, as trustee
(the "Trustee," which term includes any successor Trustee under the Agreement),
and is subject to the terms and provisions contained in the Agreement, to all
of which terms and provisions the Holder of this VSR Certificate consents by
acceptance hereof. The Agreement is hereby incorporated herein by reference and
made a part hereof. Reference is hereby made to the Agreement for a full
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Trustee and the Holders of the
VSRs. Capitalized terms not otherwise defined shall have the meanings set forth
in the Agreement.
Unless the right to receive payment hereunder previously has been
satisfied in connection with an Optional Call Date, a Total Disposition, an
Event of Default or a Redemption Event as provided below, the Company shall pay
to the Holder hereof on January 1, 1999 (the "Maturity Date"), for each VSR
represented hereby an amount, if any, as determined by an independent "big six"
accounting firm (other than the accounting firm or firms serving as the
principal auditors for the Company or PCT) selected by the Company (the
"Accounting Firm"), equal to the lesser of (x) the excess, if any, of the Base
Amount determined as of such date, over the 30-Day Average Market Price
determined as of such date and (y) $3.25. Such determinations by the Accounting
Firm absent manifest error shall be final and binding on the Company and the
Holders.
Upon an Optional Call Date, the Company may, in its sole discretion,
pay to the Holder hereof for each VSR represented hereby an amount, as
determined by the Accounting Firm, payable in cash equal to the lesser of (x)
the excess, if any, of the Base Amount determined as of an Optional Call Date,
over the 30-Day Average Market Price determined as of such date and (y) $3.25;
provided, however, such amount (the "Optional Call Payment Amount") shall in no
event be less than $0.50 if such Optional Call Date is on or prior to January
1, 1998. Such determinations by the Accounting Firm absent manifest error shall
be final and binding on the Company and the Holders. Such payment shall be made
on any date (the "Optional Call Payment Date") established by the Company,
which in no event shall be more than 30 days after the Optional Call Date, to
holders of record at the close of business on the tenth business day following
such Optional Call Date. In the event the Company exercises its optional right
to call the Securities on an Optional Call Date, the Company shall issue a
press release on such date announcing such event, the Optional Call Payment
Amount and the Optional Call Payment Date. As soon as practicable following
such Optional Call Date, the Company shall give the Holder and the Trustee
hereof notice that the Company has exercised its optional right to call the
Securities, the Optional Call Payment Amount and the Optional Call Payment
Date; provided, however, such notice to Holders may, at the option of the
Company, occur simultaneously with the payment of the Optional Call Payment
Amount.
24
Upon the consummation of a Total Disposition, the Company shall pay to
the Holder hereof for each VSR represented hereby an amount, if any, as
determined by the Accounting Firm, equal to the lesser of (x) the excess, if
any, of the Base Amount, determined as of the Total Disposition Payment Date
over the Total Disposition Amount and (y) $3.25. Such determinations by the
Accounting Firm and any Independent Financial Expert absent manifest error
shall be final and binding on the Company and the Holder. Such payment shall be
made on any date (the "Total Disposition Payment Date") established by the
Company, which in no event shall be more than 30 days after the date on which
the Total Disposition was consummated. As soon as practicable following a Total
Disposition, the Company shall give the Holder and the Trustee hereof notice of
such Total Disposition and the Total Disposition Payment Date.
Upon the occurrence and during the continuance of an Event of Default,
either the Trustee or the Holders of not less than 25% of the Securities
outstanding, by delivery of a written notice to the Company (and to the Trustee
if given by the Holders), may declare the Securities to be due and payable
immediately, and upon any such declaration the Company shall pay to each Holder
for each VSR held by such Holder the Default Payment Amount with interest at
the Default Interest Rate from the Default Payment Date through the date
payment is made or duly provided for.
In the event that it is determined that no amount is payable on the
VSRs to the Holder on an Optional Call Date, the Maturity Date, the Default
Payment Date or the Total Disposition Payment Date, as the case may be, the
Company shall give to the Holder and the Trustee notice of such determination.
Upon making such determination, absent manifest error this VSR Certificate
shall terminate and become null and void and the Holder hereof shall have no
further rights with respect hereto. The failure to give such notice or any
defect therein shall not affect the validity of such determination.
Upon the occurrence of a Redemption Event, the VSRs represented by
this VSR Certificate may be redeemed at the option of the Company in whole (but
not in part) at a redemption price, payable in cash, equal to the lesser of (x)
115% of the excess, if any, of the Base Amount determined as of the fifth
Business Day prior to the date notices of redemption are mailed to Holders (the
date of such mailing is referred to herein as the "Redemption Notice Date")
over the 30-Day Average Market Price determined as of the fifth Business Day
prior to the Redemption Notice Date and (y) $3.25 (the "Redemption Price").
A "Redemption Event" shall be deemed to have occurred if either (i) as
a result of an event beyond the reasonable control of the Company, the
existence of the VSRs would cause the Company to cease to be a member of the
consolidated group with respect to which the Company files consolidated federal
income tax returns and such situation would be avoided or cured by the
redemption of the VSRs or (ii) the VSRs would create any material financial or
legal impediment to the consummation of any bona fide significant corporate
25
event or transaction (a "Redemption Transaction") involving the Company, which
transaction would, if consummated, result in a Change of Control of the Company
and in connection with which transaction the Company has entered into
definitive documentation which creates a binding obligation upon the Company to
consummate such transaction (subject to customary conditions to closing and
fiduciary obligations), in either of clauses (i) and (ii) as determined in good
faith by the Board of Directors of the Company, as evidenced by an Officers'
Certificate of the Company.
Notwithstanding the foregoing, VSRs may not be redeemed (i) if the
Company or (unless it shall have been the subject of a Change of Control) PCT
or any of their respective successors or Affiliates (including for such purpose
any director or officer of the Company or PCT) shall have engaged in any
Prohibited Activity during the 35-trading day period preceding the Redemption
Notice Date or (ii) in the case of a Redemption Event arising out of a
Redemption Transaction, unless such Redemption Transaction shall have been
consummated on or prior to the Redemption Payment Date.
Notice of redemption shall include the Redemption Price, determined as
provided for above, and if the Redemption Event arises out of a Redemption
Transaction, a statement to the effect that such redemption is contingent upon
the consummation of such Redemption Transaction, and shall be mailed at least
15 days but not more than 60 days before the date (the "Redemption Payment
Date") payments are scheduled to be made to each Holder of VSR Certificates to
be redeemed at its registered address. If money sufficient to pay the
Redemption Price of all VSR Certificates to be redeemed is deposited with the
Paying Agent on or before the payment date, on and after such date such VSR
Certificates shall terminate and become null and void and the Holders thereof
shall have no further rights with respect thereto subject, in the case of a
Redemption Event arising out of a Redemption Transaction, to the consummation
of such Redemption Transaction.
Notwithstanding any provision of the Agreement or of this VSR
Certificate to the contrary, (i) other than in the case of interest on the
Default Payment Amount, no interest shall accrue on any amounts payable on the
VSRs to any Holder, (ii) during the 60-day period immediately preceding (and
including) an Optional Call Date on which the Company exercises its optional
right to call the Securities or the Maturity Date, as the case may be, the
Company shall not, and shall not permit any of its Subsidiaries or Affiliates
(including for such purpose any director or officer of the Company and PCT) to
engage in any Prohibited Activity and (iii) the Company shall not, and shall
not permit any of its Subsidiaries or Affiliates (including for such purpose
any director or officer of the Company and PCT) to acquire in open market
transactions, private transactions or otherwise, the Securities.
"Applicable Number" initially shall be equal to one subject to
adjustment in accordance with Section 3.1(l) of the Agreement.
26
"Base Amount" means, as of any date of determination, the excess
(rounded to the nearest $.01) of (a)(x) $10.25, if the date of determination
occurs on or before January 1, 1998, or (y) $11.00, if the date of
determination occurs after January 1, 1998, over (b) the Distribution Amount.
"Change of Control" shall mean, with respect to any specified Person,
the occurrence of one or more of the following events: (i) a Person or entity
or a group of Persons or entities acting in concert as a partnership, limited
partnership, syndicate or other group (within the meaning of Rule 13d-3 under
the Exchange Act) shall become the beneficial owner within the meaning of Rule
13d-3 under the Exchange Act) of shares representing 50% or more of the voting
power of the outstanding shares of voting stock of such specified Person; (ii)
such specified Person or any subsidiary of such specified Person shall merge or
consolidate with any other Person and after giving effect to such merger or
consolidation the holders of the voting stock of such specified Person
immediately prior thereto will own shares representing less than 50% of the
voting power of the voting stock of such specified Person or its ultimate
parent; (iii) a sale or other disposition of all or substantially all of the
assets of such specified Person; (iv) the issuance of shares of voting stock by
such specified Person which would result in the number of shares of voting
stock of such specified Person outstanding after such issuance being equal to
or in excess of 150% of the number of shares of voting stock of such specified
Person outstanding as of the Effective Date (subject to appropriate adjustment
in the event of a stock split, stock dividend, recapitalization or other
similar event applicable to shares of voting stock following the Effective
Date); and (v) if such specified Person is PCT, individuals who would
constitute a majority of the nominees to be elected to the Board of Directors
of PCT at any meeting of stockholders or by written consent (without regard to
any members of the Board of Directors elected pursuant to the terms of any
class or series of preferred stock of PCT) shall be elected to the Board of
Directors where the election or nomination for election by PCT's stockholders
of such directors was not approved by a vote of at least a majority of the
directors in office immediately prior to such election.
"Default Payment Amount" means, as of a Default Payment Date, an
amount, if any, as determined by the Accounting Firm, equal to the lesser of
(i) the excess, if any, of (x) the Base Amount determined as of such Default
Payment Date over (y) the 30-Day Average Market Price determined as of such
Default Payment Date and (ii) $3.25.
"Default Interest Rate" means 8.46% per annum.
"Default Payment Date" means the date upon which this VSR becomes due
pursuant to Section 8.1 of the Agreement.
"Distribution Amount" means, as of any date of determination, the sum
of (i) the value of all cash dividends or other cash distributions declared and
paid with respect to the Applicable Number of shares of PCT Common Stock, (ii)
all cash received by a
27
holder of PCT Common Stock with respect to the Applicable Number of shares of
PCT Common Stock as consideration in a merger, consolidation or other business
combination, (iii) the fair market value, as determined by the Independent
Financial Expert, of all dividends or other distributions consisting of
property or assets (other than cash, the Securities or other securities, but
including any rights, warrants or options to purchase Securities or other
securities that expire prior to the Optional Call Date or the Maturity Date, as
the case may be (collectively, "Designated Options")), declared and paid with
respect to the Applicable Number of shares of PCT Common Stock, and (iv) the
fair market value, as determined by the Independent Financial Expert, of all
consideration consisting of property or assets (other than cash, the Securities
or other securities, but including Designated Options) received by a holder of
PCT Common Stock with respect to the Applicable Number of shares of PCT Common
Stock as consideration in a merger, consolidation or other business
combination, in all such cases from the Effective Date to such date of
determination.
For the purposes of this definition, (x) the amount of dividends
declared and paid and the amount of consideration received with respect to the
Applicable Number of shares of PCT Common Stock shall include dividends
declared and paid and consideration received with respect to any securities
paid as dividends or received as consideration with respect to the Applicable
Number of shares of PCT Common Stock and (y) the fair market value of any
Designated Option, as of any date of determination, shall equal the excess, if
any, of the average of the Market Prices of the security underlying such
Designated Option for the 30 consecutive trading days ended on the Business Day
immediately prior to such date of determination (or if the underlying security
no longer exists, for the 30 consecutive trading days ended on the Business Day
immediately prior to the date of the transaction as a result of which such
security ceased to exist) over the exercise price therefor provided in such
Designated Option; provided that, if on the date any such Designated Option
expired, the Market Price of the security underlying such Designated Option was
less than the exercise price therefor provided in such Designated Option, the
fair market value of such Designated Option shall equal zero.
"Independent Financial Expert" means a nationally recognized
investment banking firm selected by the Company that does not have a direct or
indirect ownership interest in the Company or any of its Affiliates and that at
the time it is called upon to give independent financial advice to the Company,
is not (and none of whose directors, officers or Affiliates is) a director or
officer of the Company or any of its Affiliates; provided, that,
notwithstanding the foregoing, no such investment banking firm shall be
disqualified as an Independent Financial Expert solely by reason of its
ownership, in the ordinary course of business, for its own account or for the
account of any customer of securities of the Company or any Affiliates of the
Company.
"Market Price" means, as of any date of determination, for any
security, the last reported sale price as reported on the principal national
securities exchange on which such security is
28
then listed or, if (i) such security is not listed on a national securities
exchange or (ii) such security is listed on a national securities exchange but
the majority of the trading volume with respect to such security is effected on
the NMS/NASDAQ, the last reported sale price as reported on NMS/NASDAQ or, if
such security is not listed on a national securities exchange and is not quoted
on NMS/NASDAQ, the average of the highest reported bid and lowest reported
asked quotation on the NASDAQ or, if such security is not listed on a national
securities exchange and is not quoted on NMS/NASDAQ or NASDAQ but is traded in
the over-the-counter market, the fair market value of such security as
determined by an Independent Financial Expert.
"Prohibited Activity" means, with respect to any period, any
acquisition or disposition in open market transactions, private transactions or
otherwise, of (i) any shares of PCT Common Stock, (ii) any securities
convertible into or exchangeable for shares of PCT Common Stock or (iii) any
securities which holders of PCT Common Stock have received with respect to
their shares of PCT Common Stock, whether as a dividend or distribution or in
connection with a merger, consolidation or otherwise (other than, in each case,
(w) shares of PCT Common Stock acquired on behalf of any 401k plan established
for PCT and its subsidiaries to satisfy participant directions and related
company matching obligations, (x) shares issued or acquired pursuant to
employee stock options granted to directors, officers or employees in the
ordinary course of business prior to the first day of such period, (y) sales or
other dispositions of shares by directors or officers, or (z) acquisitions of
up to an aggregate of 25,000 shares Of PCT Common Stock in the open market by
directors or officers of PCT).
"30-Day Average Market Price" means, as of any date of determination,
the average of the Market Price of the Applicable Number of shares of PCT
Common Stock for the 30 consecutive trading days ended on the Business Day
immediately prior to such date of determination. For purposes of this
definition, the Market Price of the Applicable Number of shares of PCT Common
Stock shall (following such receipt) include the Market Price of any securities
(other than the Securities) which shall have been received by a holder of PCT
Common Stock with respect to the Applicable Number of shares of PCT Common
Stock from the Effective Date to the date of determination, whether as a
dividend or other distribution or in connection with a merger, consolidation or
other business combination or a reclassification of PCT Common Stock.
"Total Disposition" means (i) one or more mergers, consolidations or
other business combinations involving PCT after giving effect to which no
shares of PCT Common Stock shall remain outstanding or registered under the
Exchange Act, (ii) a sale, transfer or other disposition, in one or a series of
transactions, of all or substantially all of the assets of PCT or (iii) a
reclassification of PCT Common Stock as the capital stock of any other Person
(other than an Affiliate of PCT).
"Total Disposition Amount" means, with respect to a Total Disposition,
the fair market value, as determined by an
29
Independent Financial Expert, of (A) the consideration, if any, received with
respect to the Applicable Number of shares of PCT Common Stock, by the holder
thereof as a result of such Total Disposition, or (B) if an election of the
type of consideration to be received by the holders of PCT Common Stock is
made, the consideration selected by a majority of such stockholders (and
assuming such holder did not exercise any right of appraisal granted under
law).
As set forth in Section 3.1(g) of the Agreement, to the extent the
aggregate principal amount of the senior debt obligation referred to below is
at least $25,000,000, all amounts payable on the Maturity Date may be paid, at
the option of the Company, either in cash or, subject to the provisions of
Sections 7.5 and 7.6 of the Agreement, by the issuance of a senior debt
obligation of the Company which is not subordinated to any other debt
obligation of the Company, with a principal amount equal to the amount of the
payment due. Any debt issued by the Company in satisfaction of the Company's
obligations with respect to VSRs shall be issued pursuant to an indenture
having the principal terms set forth on Exhibit A to the Agreement and will
have a maturity of up to three years from the date of issuance and will have an
interest rate and redemption provisions determined in good faith by the Board
of Directors of the Company to result in such debt having in the opinion of an
Independent Financial Expert a market value as of the date of issuance on a
fully distributed basis equal to 100% of its principal amount.
The Agreement 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 under the Agreement at any time by the
Company and the Trustee with the consent of the Holders of a majority of the
Securities at the time Outstanding.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of the VSRs represented by this VSR Certificate
is registerable on the Security Register of the Company, upon surrender of this
VSR Certificate for registration of transfer at the office or agency of the
Company maintained for such purpose in The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new VSR
Certificates, for the same amount of VSRs, will be issued to the designated
transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, this VSR Certificate is exchangeable for one or more VSR
Certificates representing the same number of VSRs as represented by this VSR
Certificate as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of VSRs, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
30
Prior to the time of due presentment of this VSR Certificate for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this VSR Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Trustee nor any agent shall be affected by notice to the contrary.
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
or the Trustee under the VSR or the Agreement or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
VSR Certificate, each Holder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the VSR Certificate.
All capitalized terms used in this VSR Certificate without definition
shall have the meanings assigned to them in the Agreement.
31
Section 2.4 Form of Trustee's Certificate of Authentication.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the VSR Certificates referred to in the
within-mentioned Agreement.
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By
--------------------------------
Authorized Officer
32
ARTICLE 3
THE SECURITIES
Section 3.1 Title and Terms.
(a) The aggregate number of VSR Certificates which may be
authenticated and delivered under this Agreement is limited to a number equal
to 23,500,000 except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Section 3.4, 3.5, 3.6 or 6.6.
(b) The Securities shall be known and designated as the "Value
Support Rights" of the Company.
(c) Unless the right to receive any such amount previously has
been satisfied in connection with an Optional Call Date, a Total Disposition,
an Event of Default, or a Redemption Event, the Company shall pay to each
Holder on the Maturity Date, for each VSR held by such Holder an amount, if
any, as determined by an independent "big six" accounting firm (other than the
accounting firm or firms serving as the principal auditors for the Company or
PCT) selected by the Company (the "Accounting Firm"), equal to the lesser of
(x) the excess, if any, of the Base Amount determined as of such date, over the
30-Day Average Market Price determined as of such date and (y) $3.25. Such
determinations by the Accounting Firm absent manifest error shall be final and
binding on the Company and the Holders. The Company shall provide notice to the
Trustee of the amount payable and the method of payment pursuant to this
Section 3.1(c) together with a reasonably detailed calculation of the
determination of such amount.
(d) Upon an Optional Call Date, the Company may, in its
33
sole discretion, pay to the Holder hereof for each VSR represented hereby an
amount, as determined by the Accounting Firm, payable in cash equal to the
lesser of (x) the excess, if any, of the Base Amount determined as of such
Optional Call Date, over the 30-Day Average Market Price determined as of such
date and (y) $3.25; provided, however, such amount (the "Optional Call Payment
Amount") shall in no event be less than $0.50 if such Optional Call Date is on
or prior to January 1, 1998. Such determinations by the Accounting Firm absent
manifest error shall be final and binding on the Company and the Holders. Such
payment shall be made on any date (the "Optional Call Payment Date")
established by the Company, which in no event shall be more than 30 days after
the Optional Call Date, to holders of record at the close of business on the
tenth business day following such Optional Call Date. In the event the Company
exercises its optional right to call the Securities on an Optional Call Date,
the Company shall issue a press release on such date announcing such event, the
Optional Call Payment Amount and the Optional Call Payment Date. As soon as
practicable following such Optional Call Date, the Company shall give the
Holder and the Trustee hereof notice, in the form set forth below, that the
Company has exercised its optional right to call the Securities, the Optional
Call Payment Amount and the Optional Call Payment Date; provided, however, such
notice to Holders may, at the option of the Company, occur simultaneously with
the payment of the Optional Call Payment Amount.
34
* * * * * *
MAFCO CONSOLIDATED GROUP INC.
VALUE SUPPORT RIGHTS
[Date]
NOTICE OF EXERCISE OF OPTIONAL RIGHT TO CALL THE SECURITIES
NOTICE IS HEREBY GIVEN THAT, pursuant to Section 3.1 of the Value
Support Rights Agreement, dated as of November 25, 1996 (the "Agreement"),
between Mafco Consolidated Group Inc., (the "Company"), and American Stock
Transfer & Trust Company, as trustee (the "Trustee"), the Company has exercised
its optional right to call the Securities. All terms used in this Notice which
are defined in the Agreement shall have the meanings assigned to them in the
Agreement.
The Optional Call Payment Amount payable to each Holder on ________,
the Optional Call Payment Date, for each VSR held by such Holder shall be equal
to $___________.
MAFCO CONSOLIDATED GROUP INC.
* * * * * *
(e) Upon the consummation of a Total Disposition, the Company
shall pay to each Holder for each VSR held by such Holder an amount, if any, as
determined by the Accounting Firm, equal to the lesser of (x) the excess, if
any, of the Base Amount determined as of the Total Disposition Payment Date
over the Total Disposition Amount and (y) $3.25. Such determinations by the
Accounting Firm and any Independent Financial Expert absent manifest error
shall be final and binding on the Company and the Holders. Such payment shall
be made on any date (the "Total Disposition Payment Date") established by the
Company, which in no event shall be more than 30 days after the date on which
the Total Disposition was consummated.
(f) As soon as practicable following a Total Disposition, the
Company shall give each Holder and the Trustee
35
notice of such Total Disposition and the Total Disposition Payment Date and
such notice to the Trustee shall also specify the method of payment of the
amount payable on the Total Disposition Payment Date. The Company shall also
provide to the Trustee an Officers' Certificate as to the occurrence of a Total
Disposition setting forth the amount of such payment.
(g) To the extent the aggregate principal amount of the senior
debt obligation referred to below is at least $25,000,000, all amounts payable
pursuant to the VSRs on the Maturity Date may be paid, at the option of the
Company, either in cash or, subject to the provisions of Sections 7.5 and 7.6
of this Agreement, by the issuance of a senior debt obligation of the Company
which is not subordinated to any other debt obligation of the Company, with a
principal amount equal to the amount of the payment due. The Company shall
provide notice to the Trustee of the method of payment within one Business Day
prior to the payment thereof. Any debt issued by the Company in satisfaction of
the Company's obligations with respect to VSRs shall be issued pursuant to an
indenture having the principal terms set forth on Exhibit A hereto and will
have a maturity of up to three years from the date of issuance and will have an
interest rate and redemption provisions determined in good faith by the Board
of Directors of the Company to result in such debt having in the opinion of an
Independent Financial Expert a market value as of the date of issuance on a
fully distributed basis equal to 100% of its principal amount. Such
determination of the Board of Directors will be supported by a written opinion
delivered to the Board of Directors by an Independent Financial Expert. Prior
to the issuance of such debt securities, the Company shall provide
36
the Trustee with an Officer's Certificate as to compliance with the conditions
precedent to the issuance of such debt securities set forth in this Agreement.
(h) Upon the occurrence of a Redemption Event, the VSRs may be
redeemed at the option of the Company in whole (but not in part) on or prior to
the consummation of such event or transaction at a redemption price, payable in
cash, equal to the lesser of (x) 115% of the excess, if any, of the Base Amount
determined as of the fifth Business Day prior to the date notices of redemption
are mailed to Holders (the date of such mailing is referred to herein as the
"Redemption Notice Date") over the 30-Day Average Market Price determined as of
the Redemption Notice Date and (y) $3.25 (the "Redemption Price"). A notice of
the redemption pursuant to this Section 3.1(h) setting forth the Redemption
Price and the date of redemption shall also be delivered to the Trustee,
together with an Officer's Certificate as to the occurrence of a Redemption
Event and specifying the Redemption Price and redemption date.
A "Redemption Event" shall be deemed to have occurred if either (i) as
a result of an event beyond the reasonable control of the Company, the
existence of the VSRs would cause the Company to cease to be a member of the
consolidated group with respect to which the Company files consolidated federal
income tax returns and such situation would be avoided or cured by the
redemption of the VSRs or (ii) the VSRs would create any material financial or
legal impediment to the consummation of any bona fide significant corporate
event or transaction (a "Redemption Transaction") involving the Company, which
transaction would, if consummated, result in a Change of Control of the Company
and in connection with which transaction
37
the Company has entered into definitive documentation which creates a binding
obligation upon the Company to consummate such transaction (subject to
customary conditions to closing and fiduciary obligations), in either of
clauses (i) and (ii) as determined in good faith by the Board of Directors of
the Company as evidenced by an Officers' Certificate of the Company.
Notwithstanding the foregoing, VSRs may not be redeemed (i) if the
Company or (unless it shall have been the subject of a Change of Control) PCT
or any of their respective successors or Affiliates (including for such purpose
any director or officer of the Company and PCT) shall have engaged in any
Prohibited Activity during the 35-trading day period preceding the Redemption
Notice Date or (ii) in the case of a Redemption Event arising out of a
Redemption Transaction, unless such Redemption Transaction shall have been
consummated on or prior to the Redemption Payment Date.
Notice of redemption shall include the Redemption Price, determined as
provided for above, and if the Redemption Event arises out of a Redemption
Transaction, a statement to the effect that such redemption is contingent upon
the consummation of such Redemption Transaction, and shall be mailed at least
15 days but not more than 60 days before the date (the "Redemption Payment
Date") payments are scheduled to be made to each Holder of VSR Certificates to
be redeemed at its registered address. If money sufficient to pay the
Redemption Price of all VSR Certificates to be redeemed is deposited with the
Paying Agent on or before the payment date, on and after such date such VSR
Certificates shall terminate and become null and void and the Holders thereof
shall have no further rights with respect thereto subject, in the case of a
Redemption Event arising
38
out of a Redemption Transaction, to the consummation of such Redemption
Transaction.
(i) Notwithstanding any provision of this Agreement or the VSR
Certificates to the contrary, other than in the case of interest on the Default
Payment Amount, no interest shall accrue on any amounts payable on the VSRs to
any Holder.
(j) In the event that all of the VSR Certificates not previously
cancelled shall have been called for redemption by the Company pursuant to
Section 3.1(h) hereof or shall have become due and payable pursuant to the
terms hereof, and the Company has paid or caused to be paid or deposited with
the Trustee all amounts payable to the Holders under this Agreement, then this
Agreement shall cease to be of further effect and shall be deemed satisfied and
discharged. Notwithstanding the satisfaction and discharge of this Agreement,
the obligations of the Company under Section 4.6(c) shall survive.
(k) In the event PCT shall in any manner subdivide (by stock
split, stock dividend or otherwise) or combine (by reverse stock split or
otherwise) the number of outstanding shares of PCT Common Stock (an "Adjustment
Event"), the Applicable Number with respect to shares of PCT Common Stock
shall, from and after the date of such Adjustment Event (subject to further
adjustment in accordance with this Section 3.1(k)), equal the Applicable Number
with respect to the shares of PCT Common Stock in effect immediately prior to
such Adjustment Event, multiplied by a fraction, the numerator of which shall
be the total number of shares of PCT Common Stock outstanding immediately
following such Adjustment Event and the denominator of which shall be the total
number of shares of PCT
39
Common Stock outstanding immediately prior to such Adjustment Event. In the
event that any securities received with respect to PCT Common Stock shall in
any manner be subdivided (by stock split, stock dividend or otherwise) or
combined (by reverse stock split or otherwise), appropriate adjustments shall
be made in a manner consistent with the principles set forth in this Section
3.1(k). Whenever an adjustment is made as provided in this Section 3.1(k), the
Company shall (i) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (ii)
promptly file with the Trustee a copy of such certificate and (iii) mail a
brief summary thereof to each Holder. The Trustee shall be fully protected in
relying on any such certificate and on any adjustment therein contained. Such
adjustment absent manifest error shall be final and binding on the Company and
the Holders.
Section 3.2 Registrable Form.
The Securities shall be issuable only in registered form.
Section 3.3 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
chairman of the Board of Directors or its president or any vice president or
its treasurer, but need not be attested. The signature of any of these officers
on the Securities may be manual or facsimile. The Company's seal shall be
impressed, affixed, imprinted or reproduced on the Securities and may be in
facsimile form.
Securities bearing the manual or facsimile signatures of
40
individuals who were at the time of execution 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 Agreement, 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 deliver such Securities as
provided in this Agreement and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Agreement 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
duly executed by the Trustee by manual or facsimile signature of an authorized
officer, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and that the Holder is entitled to the benefits of this
Agreement.
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,
41
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 with
the concurrence of the Trustee. Temporary Securities may contain such reference
to any provisions of this Agreement as may be appropriate. Every temporary
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive 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 the office
or agency of the Company designated for such purpose pursuant to Section 7.2,
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 amount of definitive
Securities. Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Agreement as definitive Securities.
Section 3.5 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the office of American Stock
Transfer & Trust Company a register (the register maintained in such office and
in any other office or agency designated pursuant to Section 7.2 being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable
42
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. American Stock Transfer & Trust
Company is hereby initially appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 7.2, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new VSR Certificates
representing the same aggregate number of VSRs represented by the VSR
Certificate so surrendered that are to be transferred and the Company shall
execute and the Trustee shall authenticate and deliver, in the name of the
transferor, one or more new VSR Certificates representing the aggregate number
of VSRs represented by such VSR Certificate that are not to be transferred.
At the option of the Holder, VSR Certificates may be exchanged for
other VSR Certificates that represent in the aggregate the same number of VSRs
as the VSR Certificates surrendered at such office or agency. Whenever any VSR
Certificates are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the VSR Certificates 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
rights, and entitled to the same benefits under this Agreement, as the
Securities surrendered upon such registration of transfer or exchange.
43
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 or 6.6 not involving any transfer.
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities.
If (a) any mutilated Security is surrendered to the Trustee, or (b)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Company or
the Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon delivery of a Company Order the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a new VSR Certificate of
like tenor and amount of VSRs, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is to become due and payable within 15 days,
44
the Company in its discretion may, instead of issuing a new VSR Certificate,
pay to the Holder of such Security on an Optional Call Date, the Maturity Date,
the Total Disposition Payment Date or the Default Payment Date, as the case may
be, all amounts due and payable with respect thereto.
Upon the issuance of any new Securities under this Section, the
Company shall pay 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
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Agreement equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.7 Presentation of VSR Certificate.
Payment of any amounts pursuant to the VSRs shall be made only upon
presentation by the Holder thereof, at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
and at any other office or agency maintained by the Company for such purpose in
such coin or currency of the United States of America as at the time is legal
tender for
45
the payment of public and private debts or in debt securities of the Company in
accordance with the provisions of Section 3.1(g). However, the Company may pay
such amounts by its check payable in such money.
Section 3.8 Persons Deemed Owners.
Prior to the time of due presentment for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name any Security is registered as the owner of such Security
for the purpose of receiving payment 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.
Section 3.9 Cancellation.
All Securities surrendered for payment, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled 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
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Agreement. All cancelled Securities held by the
Trustee shall be disposed of as directed by a Company Order.
46
ARTICLE 4
THE TRUSTEE
Section 4.1 Certain Duties and Responsibilities.
(a) With respect to the Holders of Securities issued, the
Trustee, prior to the occurrence of an Event of Default with respect to the
Securities and after the curing or waiving of all Events of Default which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement and no implied covenants shall be read
into this Agreement against the Trustee. In case an Event of Default with
respect to the Securities has occurred (which has not been cured or waived),
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) In the absence of bad faith on its part, prior to the
occurrence of an Event of Default and after the curing or waiving of all such
Events of Default which may have occurred, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement; but in the case of any such certificates
or opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent
47
action, its own negligent failure to act, or its own willful misconduct,
except that
(1) this Subsection (c) shall not be construed to limit
the effect of Subsections (a) and (b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(3) no provision of this Agreement shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it; and
(4) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders pursuant to Section 8.9 relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement.
(d) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
48
Section 4.2 Certain Rights of Trustee.
Subject to the provisions of Section 4.1:
(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 and the Trustee need not investigate any fact or matter stated in the
document;
(b) any request or direction or order 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 and the Trustee shall not be liable for any action it takes or
omits to take in good faith reliance thereon;
(c) whenever in the administration of this Agreement 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 and the Trustee shall not be liable
for any action it takes or omits to take in good faith reliance thereon or an
Opinion of Counsel;
(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
49
in accordance with such advice or Opinion of Counsel;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement at the request or direction
of any of the Holders pursuant to this Agreement, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or document,
but the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may see fit, and if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement.
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Section 4.3 Not Responsible for Recitals or Issuance of Securities.
The Trustee shall not be accountable for the Company's use of the
Securities or the proceeds from the 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
Agreement or of the Securities.
Section 4.4 May Hold Securities.
The Trustee, any Paying Agent, 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 4.7 and 4.12, may otherwise
deal with the Company with the same rights it would have if it were not
Trustee, Paying Agent, Security Registrar or such other agent.
Section 4.5 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.
Section 4.6 Compensation and Reimbursement.
The Company agrees
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
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(b) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Agreement (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
(c) to indemnify the Trustee and each of its agents, officers,
directors and employees (each an "indemnitee") for, and to hold it harmless
against, any loss, liability or expense (including attorneys fees and expenses)
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder, 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. The obligations of the
Company hereunder shall constitute additional indebtedness hereunder. To secure
the Company's payment obligations in this Section, the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the
Trustee other than money or property held in trust to pay particular
Securities. The Company's payment obligations pursuant to this Section shall
survive the termination of this Agreement. When a Trustee incurs expenses after
the occurrence of an Event of Default specified in Section 8.1(c) or 8.1(d)
with respect to the Company, the expenses are intended to constitute expenses
of administration under bankruptcy laws.
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Section 4.7 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any conflicting interest within
the meaning of the Trust Indenture Act, it shall, within 90 days after
ascertaining that it has such conflicting interest, either eliminate such
conflicting interest or resign to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Agreement. The
Company shall take prompt steps to have a successor appointed in the manner
provided in this Agreement.
Section 4.8 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation that is eligible pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least $10,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of a supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
Section 4.9 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 4.10.
53
(b) The Trustee, or any trustee or trustees hereafter appointed,
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 an Act of the
Holders of a majority 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 4.7 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 4.8
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 case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) the Holder of any Security 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
54
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 any removal by Holders of a majority of the
Outstanding Securities, a successor Trustee shall be appointed by Act of the
Holders of a majority of the Outstanding Securities delivered to the Company
and the retiring Trustee the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with Section 4.10, 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 of the Securities and accepted appointment within 60 days after the
retiring Trustee tenders its resignation or is removed, the retiring Trustee
may, or, the Holder of any Security who has been a bona fide Holder 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 by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust office. If the Company fails to send such notice
within ten days after acceptance of appointment by a succes-
55
sor Trustee, it shall not be a default hereunder but the successor Trustee
shall cause the notice to be mailed at the expense of the Company.
Section 4.10 Acceptance of Appointment of 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, upon 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 4.11 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
56
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper
or any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities; and such certificate shall have the full force
which it is anywhere in the Securities or in this Agreement provided that the
certificate of the Trustee shall have; provided that the right to adopt the
certificate of authentication of any predecessor Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.
Section 4.12 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or shall 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).
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ARTICLE 5
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 5.1 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee (i)
semiannually, not later than June 30 and December 31 of each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders as of such date, and (ii) at such times as the Trustee may request
in writing, within 30 days after receipt by the Company of any such request, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of a date not more than 15 days prior to the time
such list is furnished; provided, however, that if and so long as the Trustee
shall be the Security Registrar, no such list need be furnished.
Section 5.2 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 5.1 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 5.1 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders
with respect to their rights under this Agreement and the corresponding rights
and privileges of the Trustee shall be as provided by the Trust Indenture Act.
58
(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 shall be deemed to be in violation of law or held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders made pursuant to the Trust Indenture Act.
Section 5.3 Reports by Trustee.
(a) Within 60 days after December 31 of each year commencing with
the first December 31 after the first issuance of Securities, the Trustee shall
transmit to all Holders such reports concerning the Trustee and its actions
under this Agreement as may be required pursuant to the Trust Indenture Act at
the time and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to the Holders, be filed by the Trustee with each stock exchange
upon which the Securities are listed, with the Commission and also with the
Company. The Company will promptly notify the Trustee when the Securities are
listed on any stock exchange.
Section 5.4 Reports by Company.
The Company shall:
(a) file with the Trustee,
(i) within 15 days after the Company is required to file
the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to
file with the
59
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act
(such required information, documents and other reports, generally,
the "Exchange Act Documents"); or,
(ii) if the Company is not required to file its Exchange Act
Documents, quarterly and annual financial information that would be
required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations; and
(b) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information documents and reports required
to be filed by the Company pursuant to subsection (a) of this Section as may be
required by rules and regulations prescribed from time to time by the
Commission.
ARTICLE 6
AMENDMENTS
Section 6.1 Amendments Without Consent of Holders.
Without the consent of any Holders, the Company and the Trustee, at
any time and from time to time, may enter into one or more amendments hereto or
to the Securities, for any of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities any property or assets; or
60
(b) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(c) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions as its Board of
Directors and the Trustee shall consider to be for the protection of
the Holders of Securities, and to make the occurrence, or the
occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies
provided in this Agreement as herein set forth; provided that in
respect of any such additional covenant, restriction, condition or
provision such amendment may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies
available to the Trustee upon such an Event of Default or may limit
the right of the Holders of a majority of the Securities to waive such
an Event of Default; or
(d) to cure any ambiguity, or to correct or supplement any
provision herein or in the Securities which may be defective or
inconsistent with any other provision herein; provided that such
provisions shall not materially reduce the benefits of this Agreement
or the Securities to the Holders; or
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(e) to make any other provisions with respect to matters or
questions arising under this Agreement; provided that such provisions
shall not adversely affect the interests of the Holders; or
(f) to make any amendments or changes necessary to comply or
maintain compliance with the Trust Indenture Act.
Promptly following any amendment of this Agreement or the Securities
in accordance with this Section 6.1, the Trustee shall notify the Holders of
the Securities of such amendment; provided that any failure so to notify the
Holders shall not affect the validity of such amendment.
Section 6.2 Amendments with Consent of Holders.
With the consent of the Holders of a majority 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 one or more amendments hereto or to the Securities for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or to the Securities or of modifying in any manner
the rights of the Holders under this Agreement or to the Securities; provided,
however, that no such amendment shall, without the consent of the Holder of
each Outstanding Security affected thereby:
(a) modify the definition of Optional Call Date, Optional Call
Payment Date, Maturity Date, Total Disposition Payment Date, Default Payment
Date, Market Price, 30-Day Average Market Price, Default Payment Amount,
Default Payment Interest Rate, Base Amount or Prohibited Activity, modify
Section 3.1(k) or otherwise extend the maturity of the Securities or reduce the
amounts payable
62
in respect of the Securities or modify any other payment term, interest rate or
payment date or, except as expressly permitted by Section 6.1(e), modify the
definition of Applicable Number, Distribution Amount, Optional Call Payment
Amount, Total Disposition Amount or Change of Control;
(b) reduce the amount of the Outstanding Securities, the
consent of whose Holders is required for any such amendment; or
(c) modify any of the provisions of this Section or Section 8.10,
except to increase any such percentage or to provide that certain other
provisions of this Agreement cannot be modified or waived without the consent
of the Holder of each Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall he
sufficient if such Act shall approve the substance thereof.
Section 6.3 Execution of Amendments.
In executing any amendment permitted by this Article, the Trustee
shall be entitled to receive indemnity reasonably satisfactory to it, and
(subject to Section 4.1) shall be fully protected in relying upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement. The Trustee shall execute any amendment authorized pursuant
to this Article VI if the amendment does not adversely affect the Trustee's own
rights, duties or immunities under this Agreement or otherwise. Otherwise, the
Trustee may, but need not, execute such amendment.
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Section 6.4 Effect of Amendments; Notice to Holders.
Upon the execution of any amendment under this Article, this Agreement
and the Securities shall be modified in accordance therewith, and such
amendment shall form a part of this Agreement and the Securities for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
Promptly after the execution by the Company and the Trustee of any
amendment pursuant to the provisions of this Article, the Company shall mail a
notice thereof by first class mail to the Holders of Securities at their
addresses as they shall appear on the Security Register, setting forth in
general terms the substance of such amendment. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amendment.
Section 6.5 Conformity with Trust Indenture Act.
Every amendment executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
Section 6.6 Reference in Securities to Amendments.
If an amendment changes the terms of a Security, the Trustee may
require the Holder of the Security to deliver it to the Trustee. Securities
authenticated and delivered after the execution of any amendment 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 amendment. If the
Company shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Board of Directors of the Company, to any such
amendment may be prepared and executed by the Company and
64
authenticated and delivered by the Trustee in exchange for Outstanding
Securities. Failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment.
ARTICLE 7
COVENANTS
Section 7.1 Payment of Amounts, if any, to Holders.
The Company will duly and punctually pay the amounts, if any, on the
Securities in accordance with the terms of the Securities and this Agreement.
Such amounts shall be considered paid on the date due if on such date the
Trustee or the Paying Agent holds in accordance with this Agreement money
sufficient to pay all such amounts then due. Notwithstanding any other
provision of this Agreement, the Trustee and the Paying Agent shall comply with
all U.S. federal withholding requirements with respect to payments to Holders
that the Company, the Trustee or the Paying Agent reasonably believes are
applicable under the Internal Revenue Code of 1986, as amended, and the
Treasury regulations thereunder. Amounts withheld in compliance with such
withholding requirements shall, for purposes of this Agreement, be treated as
paid to the Holder such withholding was made with respect to. The consent of
Holder shall not be required for any such withholding.
Section 7.2 Maintenance of Office or Agency.
As long as any of the Securities remain Outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
(i) where Securities may be presented or surrendered for payment, (ii) where
Securities may be surrendered for registration of transfer or exchange and
(iii) where notices and
65
demands to or upon the Company in respect of the Securities and this Agreement
may be served. The office of the Trustee at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ shall be such office or agency of the Company, unless the Company
shall designate and maintain some other office or agency for one or more of
such purposes. The Company or any of its Subsidiaries may act as Paying Agent,
registrar or transfer agent; provided that such Person shall take appropriate
actions to avoid the commingling of funds. The Company will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Company 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 the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of 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 designation; 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 any change in the location of any
such office or agency.
66
Section 7.3 Money for Security Payments to Be Held in Trust.
If the Company or any of its Subsidiaries shall at any time act as the
Paying Agent, it will, on or before an Optional Call Payment Date, the Maturity
Date, the Total Disposition Payment Date, Redemption Payment Date or the
Default Payment Date, as the case may be, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the amounts, if
any, 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 for the
Securities, it will, on or before an Optional Call Payment Date, the Maturity
Date, the Total Disposition Payment Date, the Redemption Payment Date or the
Default Payment Date, as the case may be, deposit with a Paying Agent a sum in
same day funds sufficient to pay the amount, if any, so becoming due; such sum
to be held in trust for the benefit of the Persons entitled to such amount, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of such action or any 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
(A) such Paying Agent will hold all sums held by it for the payment of any
amount payable on Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as
67
herein provided and will notify the Trustee of the sums so held and (B) that it
will give the Trustee notice of any failure by the Company (or by any other
obligor on the Securities) to make any payment on the Securities when the same
shall be due and payable.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment on any Security and remaining
unclaimed for one year after an Optional Call Payment Date, the Maturity Date,
the Total Disposition Payment Date, Redemption Payment Date or the Default
Payment Date, as the case may be, 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 shall
thereupon cease.
Section 7.4 Certain Purchases and Sales.
(a) During the 60-day period immediately preceding (and
including) an Optional Call Date on which the Company exercises its optional
right to call the Securities or the Maturity Date, as the case may be, the
Company shall not, and shall not permit any of its Subsidiaries or Affiliates
(including for such purpose any director or officer of the Company and PCT) to
engage in any Prohibited Activity.
(b) The Company shall not, and shall not permit any of its
Subsidiaries or Affiliates (including for such purpose any director or officer
of the Company and PCT) to acquire in open market transactions, private
transactions or otherwise, the Securities.
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Section 7.5 Listing of Securities.
The Company will use its best efforts to cause (i) the Securities and
(ii) the securities, if any, contemplated to be issued pursuant to an indenture
having the terms set forth on Exhibit A hereto, to be either (a) registered on
a national securities exchange or (b) quoted on NMS/NASDAQ.
Section 7.6 Registration of Debt Securities; TIA.
If the Company elects to satisfy its obligations hereunder, subject
to the provisions of Section 7.7 hereof, by issuing debt securities pursuant to
an indenture having the terms set forth on Exhibit A (the "Payment Notes"), the
Company, shall cause, no later than the applicable payment date hereunder, (i)
such issuance of debt securities to be registered under the Securities Act and
(ii) such indenture to be qualified under the TIA.
Section 7.7 Minimum Principal Amount of Debt Securities.
Notwithstanding anything in this Agreement to the contrary, if the
Company elects to issue Payment Notes pursuant to Section 7.6 hereof, the
Company may elect not to issue Payment Notes to any individual Holder if such
Holder would receive, in the aggregate, a principal amount of Payment Notes
(the "Owed Principal Amount") that is less than an amount to be determined by
the Company prior to the issuance thereof (the "Minimum Principal Per Holder"),
but the Minimum Principal Per Holder shall not exceed $1,000.00. If such
individual Holder's owed Principal Amount exceeds the Minimum Principal Per
Holder, the Company may elect to issue to such individual Holder Payment Notes
in an aggregate principal amount that is (i) at least the Minimum Principal Per
Holder and (ii) in increments
69
above the Minimum Principal Per Holder in an amount to be determined by the
Company prior to the issuance of the Payment Notes, but each such increment
shall not exceed $1,000.00. Any obligations under this Agreement of the Company
to any such individual Holder that are not satisfied by the issuance of Payment
Notes as a result of the provisions of this Section 7.7 shall be satisfied by
the Company as otherwise provided in this Agreement. Any payments of cash by
the Company contemplated by this Agreement (including this Section 7.7) may be
funded in whole or in part by the issuance of Payment Notes to the Trustee and
by the Trustee's subsequent sale of such Payment Notes on the principal
national securities exchange on which such Payment Notes are listed or, if such
Payment Notes are not so listed, on NMS/NASDAQ. Nothing in this Section 7.7
shall require the Company to issue any Payment Notes to any Holder.
Section 7.8 Manipulative Transactions.
Neither the Company nor any of its Affiliates shall take any action
that is intended to manipulate the 30-Day Average Market Price during the
60-day period immediately preceding (and including) an Optional Call Date on
which the Company exercises its optional right to call the Securities or the
Maturity Date, as the case may be.
Section 7.9 Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, commencing with the fiscal year ending in
the year during which the Securities are first issued hereunder (but in no
event more than one year from such issuance), a written statement signed by the
Chairman of the Board, President or other principal executive officer or Vice
President of
70
the Company and by the Treasurer or other principal financial officer or
principal accounting officer of the Company, stating, as to each signer
thereof, that
(a) a review of the activities of the Company during such year
and of performance under this Agreement has been made under his supervision,
and
(b) to the best of his knowledge, based on such review, the
Company has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to him and the nature and status
thereof.
Section 7.10 Notice of Default.
The Company shall file with the Trustee written notice of the
occurrence of any Event of Default or other default under this Agreement within
five business days of its becoming aware of any such Default or Event of
Default.
ARTICLE 8
REMEDIES OF THE TRUSTEE AND HOLDERS
ON EVENT OF DEFAULT
Section 8.1 Event of Default Defined; Acceleration of Maturity; Waiver
of Default.
"Event of Default" with respect to the Securities, means each one of
the following events which shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
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(a) default in the payment of all or any part of the amounts
payable in respect of any of the Securities as and when the same shall
become due and payable either at an Optional Call Payment Date, the
Maturity Date, the Total Disposition Payment Date or otherwise; or
(b) default in the performance, or breach, of any covenant
or warranty of the Company in respect of the Securities (other than a
covenant or warranty in respect of the Securities, a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of
90 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 25% 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
(c) a court having jurisdiction in the premises shall enter
a decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar
official) of the Company or for any substantial part of its property
or ordering the winding up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
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(d) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
of or taking possession by a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the
Company or for any substantial part of its property, or make any
general assignment for the benefit of creditors.
If an Event of Default described above occurs and is continuing, then, and in
each and every such case, unless all of the Securities shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
of the Securities then Outstanding hereunder by notice in writing to the
Company (and to the Trustee if given by the Holders), may declare the
Securities to be due and payable immediately, and upon any such declaration the
Default Amount for each VSR shall become immediately due and payable and,
thereafter, shall bear interest at the Default Interest Rate until payment is
made to the Trustee.
The foregoing provisions, however, are subject to the condition that
if, at any time after the Securities shall have been so declared due and
payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all amounts which
shall have become due otherwise than by acceleration (with interest upon such
overdue amount at the Default Interest Rate to the date of such payment or
deposit) and such amount as shall be sufficient to cover
73
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other expenses and liabilities incurred and all advances made, by the
Trustee except as a result of negligence or bad faith, and if any and all
Events of Default under this Agreement, other than the non-payment of the
amounts which shall have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein, then and in every such case
the Holders of a majority of all the Securities then Outstanding, by written
notice to the Company and to the Trustee, may waive all defaults with respect
to the Securities and rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or shall impair any right consequent thereof.
Section 8.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt.
The Company covenants that in case default shall be made in the
payment of all or any part of the Securities when the same shall have become
due and payable, whether at an Optional Call Payment Date, the Maturity Date,
the Total Disposition Payment Date, the Default Payment Date, or upon
acceleration or otherwise, then upon demand of the Trustee, the Company will
pay to the Trustee for the benefit of the Holders of the Securities the whole
amount that then shall have become due and payable on all Securities (with
interest from the date due and payable to the date of such payment upon the
overdue amount at the Default Interest Rate); and in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee and each
predecessor Trustee, their
74
respective agents, attorneys and counsel, and any expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of its negligence or bad faith.
The Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders 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 Agreement or in aid of the exercise of any power granted herein, or to
enforce any other remedy.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Company or other obligor
upon such Securities and collect in the manner provided by law out of the
property of the Company or other obligor upon such Securities, wherever
situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the
Company or an other obligor upon the Securities under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or
75
taken possession of the Company or its property or such other obligor, or in
case of any other comparable judicial proceedings relative to the Company or
other obligor upon the Securities, or to the creditors or property of the
Company or such other obligor the Trustee, irrespective of whether the
principal of any Securities shall then be due and payable as herein expressed
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
(but shall have no obligation) by intervention in such proceedings or
otherwise:
(a) to file and prove a claim or claims for the whole amount
owing and unpaid in respect of the Securities, and to file such other
papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence
or bad faith) and of the Holders allowed in any judicial proceedings
relative to the Company or other obligor upon the Securities, or to
their respective property;
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings; and
76
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Holders and of the
Trustee on their behalf; and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized by each of
the Holders to make payments to the Trustee, and, in the event that
the Trustee shall consent to the making of payments directly to the
Holders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee
and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence
or bad faith and all other amounts due to the Trustee or any
predecessor Trustee pursuant to Section 4.6. To the extent that such
payment of reasonable compensation, expenses, disbursements, advances
and other amounts out of the estate in any such proceedings shall be
denied for any reason, payment of the same shall be secured by a lien
on, and shall be paid out of, any and all distributions, dividends,
moneys, securities and other property which the Holders may be
entitled to receive in such proceedings, whether in liquidation or
under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities, or the
77
rights of any Holder thereof, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding except, as aforesaid, to vote
for the election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Agreement, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof and any trial or
other proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Agreement to which the
Trustee shall be a party) the Trustee shall be held to represent all the
Holders, and it shall not be necessary to make any Holders of such Securities
parties to any such proceedings.
Section 8.3 Application of Proceeds.
Any monies collected by the Trustee pursuant to this Article in
respect of any Securities shall be applied in the following order at the date
or dates fixed by the Trustee upon presentation of the several Securities in
respect of which monies have been collected and stamping (or otherwise noting)
thereon the payment in exchange for the presented Securities if only partially
paid or upon surrender thereof if fully paid:
78
FIRST: To the payment of costs and expenses in respect of which monies
have been collected, including reasonable compensation to the Trustee and
each predecessor Trustee and their respective agents and attorneys and of
all expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or
bad faith, and all other amounts due to the Trustee or any predecessor
Trustee pursuant to Section 4.6;
SECOND: To the payment of the whole amount then owing and unpaid upon
all the Securities, with interest at the Default Interest Rate on all such
amounts, and in case such monies shall be insufficient to pay in full the
whole amount so due and unpaid upon the Securities, then to the payment of
such amounts without preference or priority of any security over any other
Security, ratably to the aggregate of such amounts due and payable; and
THIRD: To the payment of the remainder, if any, to the Company or any
other person lawfully entitled thereto.
Section 8.4 Suits for Enforcement.
In case an Event of Default has occurred, has not been waived and is
continuing, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Agreement by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Agreement or in aid of the exercise of any power granted in this Agreement
or
79
to enforce any other legal or equitable right vested in the Trustee by this
Agreement or by law.
Section 8.5 Restoration of Rights on Abandonment of Proceedings.
In case the Trustee or any Holder shall have proceeded to enforce any
right under this Agreement and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely to the
Trustee or to such Holder, then and in every such case the Company and the
Trustee and the Holders shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company, the Trustee and the Holders shall continue as though no such
proceedings had been taken.
Section 8.6 Limitations on Suits by Holders.
No Holder of any Security shall have any right by virtue or by
availing of any provision of this Agreement to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to this Agreement, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other remedy
hereunder, unless such Holder previously shall have given to the Trustee
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of not less than 25% of the Securities
then Outstanding shall have made written request upon the Trustee to institute
such action or proceedings in its own name as trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby and the
Trustee for 60 days
80
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceeding and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 8.9; it being understood and intended, and being expressly covenanted
by the taker and Holder of every Security with every other taker and Holder and
the Trustee, that no one or more Holders of Securities shall have any right in
any manner whatever by virtue or by availing of any provision of this Agreement
to effect, disturb or prejudice the rights of any other such Holder of
Securities, or to obtain or seek to obtain priority over or preference to any
other such Holder or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Securities. For the protection and enforcement of the provisions of
this Section, each and every Holder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
Section 8.7 Unconditional Right of Holders to Institute Certain Suits.
Notwithstanding any other provision in this Agreement and any
provision of any Security, the right of any Holder of any Security to receive
payment of the amounts payable in respect of such Security on or after the
respective due dates expressed in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
81
Section 8.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default.
Except as provided in Section 8.6, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
No delay or omission of the Trustee or of any Holder to exercise any
right or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and, subject to
Section 8.6, every power and remedy given by this Agreement or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Holders.
Section 8.9 Control by Holders.
The Holders of a majority of the Securities at the time Outstanding
shall have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Securities by this
Agreement; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Agreement; and provided further
that (subject to
82
the provisions of Section 4.1) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors, the executive
committee, or a trust committee of directors or responsible officers of the
Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities not joining in the giving of said direction, it being understood
that (subject to Section 4.1) the Trustee shall have no duty to ascertain
whether or not such actions or forebearances are unduly prejudicial to such
Holders.
Nothing in this Agreement shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Holders.
Section 8.10 Waiver of Past Defaults.
Prior to the declaration of the acceleration of the maturity of the
Securities as provided in Section 8.1, in the case of a default or an Event of
Default specified in clause (b), (c) or (d) of Section 8.1, the Holders of a
majority of all the Securities then Outstanding may waive any such default or
Event of Default, and its consequences except a default in respect of a
covenant or provisions hereof which cannot be modified or amended without the
consent of the Holder of each Security affected. In the case of any such
waiver, the Company, the Trustee and the Holders of the Securities
83
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for
every purpose of this Agreement; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 8.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances.
The Trustee shall transmit to the Holders, as the names and addresses
of such Holders appear on the Security Register, notice by mail of all defaults
which have occurred and are known to the Trustee, such notice to be transmitted
within 90 days after the occurrence thereof, unless such defaults shall have
been cured before the giving of such notice (the term "default" or "Defaults"
for the purposes of this Section being hereby defined to mean any event or
condition which is, or with notice or lapse of time or both would become, an
Event of Default); provided that, except in the case of default in the payment
of the amounts payable in respect of any of the Securities, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
84
Section 8.12 Right of Court to Require Filing of Undertaking to Pay
Costs.
All parties to this Agreement agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Agreement or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including attorneys' fees, against
any party litigant in such suit, having due regard to the merits and good faith
of the claims or defenses made by such party litigant; but the provisions of
this Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder or group of Holders holding in the aggregate more than
10% of the Securities Outstanding or to any suit instituted by any Holder for
the enforcement of the payment of any Security on or after the due date
expressed in such Security.
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on Certain Terms.
The Company covenants that it will not merge or consolidate with or
into any other Person or sell or convey all or substantially all of its assets
to any Person, unless (i) the Company shall be the continuing corporation, or
the successor Person or the Person which acquires by sale or conveyance
substantially all the assets of the Company shall be a Person organized under
the laws of the United
85
States of America or any State thereof and shall expressly assume by an
instrument supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the Securities,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Agreement to be performed or
observed by the Company and (ii) the Company, or such successor Person, as the
case may be, shall not, immediately after such merger or consolidation, or such
sale or conveyance, be in default in the performance of any such covenant or
condition provided, however, that nothing herein shall affect the rights of the
Holders or the Trustee upon any Total Disposition.
Section 9.2 Successor Person Substituted.
In case of any such consolidation, merger, sale or conveyance, and
following such an assumption by the successor Person, such successor Person
shall succeed to and be substituted for the Company with the same effect as if
it had been named herein. Such successor Person may cause to be signed, and may
issue either in its own name or in the name of the Company prior to such
succession any or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor corporation instead of the Company and subject
to all the terms, conditions and limitations in this Agreement prescribed, the
Trustee shall authenticate and shall deliver any Securities which previously
shall have been signed and delivered to the Trustee for authentication, and any
Securities which such successor corporation thereafter shall cause to be signed
and delivered to the Trustee for that purpose. All of the Securi-
86
ties so issued shall in all respects have the same legal rank and benefit under
this Agreement as the Securities theretofore or thereafter issued in accordance
with the terms of this Agreement as though all of such Securities had been
issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Company or any Person which shall theretofore have become
such in the manner described in this Article shall be discharged from all
obligations and covenants under this Agreement and the Securities and may be
liquidated and dissolved.
Section 9.3 Opinion of Counsel to Trustee.
The Trustee, subject to the provisions of Sections 4.1 and 4.2, shall
receive an Opinion of Counsel, prepared in accordance with Sections 1.3 and
1.4, as conclusive evidence that any such consolidation, merger, sale or
conveyance, and any such assumption, and any such liquidation or dissolution,
complies with the applicable provisions of this Agreement.
* * * * * *
87
This Agreement shall be signed in any number of counterparts with the
same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed an original of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
MAFCO CONSOLIDATED GROUP INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AMERICAN STOCK TRANSFER & TRUST COMPA-
NY, as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
88
EXHIBIT A
MAFCO CONSOLIDATED GROUP INC.
SUMMARY OF TERMS OF SENIOR NOTES
ISSUER: Mafco Consolidated Group Inc. (the
"Company").
SECURITIES: Senior Notes (the "Notes") to be
issued under an indenture (the
"Indenture") between the Company
and American Stock Transfer &
Trust Company, as trustee (the
"Trustee").
PRINCIPAL AMOUNT: Aggregate amount due and payable with
respect to the VSRs issued by the
Company.
MATURITY: Up to three years from date of issuance.
INTEREST; REDEMPTION: A rate of interest and redemption pro-
visions determined in good faith by
the Board of Directors such that the
Notes will have in the opinion of an
Independent Financial Expert a market
value as of the date of issuance on a
fully distributed basis equal to 100%
of its principal amount. Such deter-
mination will be supported by a writ-
ten opinion delivered to the Board of
Directors by an Independent Financial
Expert (as such term is defined in the
VSR Agreement). Interest will be pay-
able in cash semiannually in arrears.
COVENANTS: Pursuant to the Indenture, the Company
shall covenant (i) to pay the princi-
pal of and interest on the Notes
promptly when due; (ii) to furnish the
Trustee and holders of the Notes with
information, documents and other re-
ports required to be filed with the
SEC under Sections 13 and 15(d) of the
Securities Exchange Act of 1934, as
amended; and (iii) not to engage in
any affiliated transaction on other
than arm's-length terms.
RANKING: The Notes will not be subordinated to
any other indebtedness of the
Company and will rank pari passu
with all other unsubordinated
indebtedness of the Company
(provided that the Company
89
shall not be prohibited from issuing
secured indebtedness).
SUCCESSOR COMPANY
PROVISIONS: The Company shall not consolidate or
merge with or into, or sell all or
substantially all of its assets to,
any Person unless (i) the surviving or
transferee Person is a Person orga-
nized under the laws of the United
States or any state thereof and shall
expressly assume the obligations under
the Indenture and (ii) immediately
after giving effect to such transac-
tion no default shall have occurred
and being continuing.
EVENTS OF DEFAULT: Failure to pay principal when due;
failure to pay interest within 30 days
of when due; failure to comply with
the Successor Company provisions; de-
fault in the performance of any other
covenant for a period of 90 days after
notice thereof; and events of bank-
ruptcy, insolvency or reorganization
with respect to the Company.
REGISTRATION; TIA;
LISTING: The issuance of the Notes shall have
been registered under the Securities
Act of 1933, as amended; the Indenture
shall have been qualified under the
Trust Indenture Act of 1939, as amend-
ed; and the Notes shall have been ap-
proved for listing, subject to offi-
cial notice of issuance, on a national
securities exchange or on NASDAQ.
ADDITIONAL TERMS: The Indenture shall contain such other
provisions, where applicable, as are
consistent with the VSR Agreement.
90