EXHIBIT 4.1
EXECUTION COPY
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INDENTURE
Among
TEVA PHARMACEUTICAL FINANCE B.V.
the Company,
TEVA PHARMACEUTICAL INDUSTRIES LIMITED,
the Guarantor
and
THE BANK OF NEW YORK,
as Trustee
0.375% CONVERTIBLE SENIOR DEBENTURES DUE 2022
Dated as of November 18, 2002
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
--------------- ---------
310(a)(1)................................................... 5.11
(a)(2)................................................... 5.11
(a)(3)................................................... n/a
(a)(4)................................................... n/a
(a)(5)................................................... 5.11
(b)...................................................... 5.3; 5.11
(c)...................................................... n/a
311(a)...................................................... 5.12
(b)...................................................... 5.12
(c)...................................................... n/a
312(a)...................................................... 2.12
(b)...................................................... 13.3
(c)...................................................... 13.3
313(a)...................................................... 5.7
(b)(1)................................................... n/a
(b)(2)................................................... 5.7
(c)...................................................... 5.7; 13.2
(d)...................................................... 5.7
314(a)(1), (2), (3)......................................... 9.7; 13.6
(a)(4)................................................... 9.7; 9.8; 13.6
(b)...................................................... n/a
(c)(1)................................................... 13.5
(c)(2)................................................... 13.5
(c)(3)................................................... n/a
(d)...................................................... n/a
(e)...................................................... 13.6
(f)...................................................... n/a
315(a)...................................................... 5.1(a)
(b)...................................................... 5.6; 14.2
(c)...................................................... 5.1(b)
(d)...................................................... 5.1(c)
(e)...................................................... 4.14
316(a)(last sentence)....................................... 2.15
(a)(1)(A)................................................ 4.5
(a)(1)(B)................................................ 4.4
(a)(2)................................................... n/a
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(b)...................................................... 4.7
(c)...................................................... 7.4
317(a)(1)................................................... 4.8
(a)(2)................................................... 4.9
(b)...................................................... 2.7
318(a)...................................................... 13.1
(b)...................................................... n/a
(c)...................................................... 13.1
------------------
"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
ii
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.............................................1
Section 1.2 Incorporation by Reference of Trust Indenture
Act....................................................14
Section 1.3 Rules of Construction..................................14
ARTICLE 2
THE SECURITIES AND THE GUARANTEES
Section 2.1 Title and Terms........................................15
Section 2.2 Form of Securities.....................................16
Section 2.3 Legends................................................17
Section 2.4 Form of Guarantee......................................21
Section 2.5 Guarantee of Securities................................22
Section 2.6 Execution, Authentication, Delivery and Dating
of the Securities......................................23
Section 2.7 Registrar and Paying Agent.............................24
Section 2.8 Paying Agent to Hold Assets in Trust...................25
Section 2.9 General Provisions Relating to Transfer and
Exchange...............................................25
Section 2.10 Book-Entry Provisions for the Global Securities........26
Section 2.11 Special Transfer Provisions............................28
Section 2.12 Holder Lists...........................................31
Section 2.13 Persons Deemed Owners..................................31
Section 2.14 Mutilated, Destroyed, Lost or Stolen Securities........31
Section 2.15 Treasury Securities....................................32
Section 2.16 Temporary Securities...................................32
Section 2.17 Cancellation...........................................33
Section 2.18 CUSIP Numbers..........................................33
Section 2.19 Defaulted Interest.....................................33
Section 2.20 Execution of Guarantees................................33
Section 2.21 Add On Securities......................................34
ARTICLE 3
SATISFACTION AND DISCHARGE
Section 3.1 Satisfaction and Discharge of Indenture................36
Section 3.2 Deposited Monies to be Held in Trust...................37
Section 3.3 Return of Unclaimed Monies.............................37
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ARTICLE 4
DEFAULTS AND REMEDIES
Section 4.1 Events of Default......................................38
Section 4.2 Acceleration of Maturity; Rescission and
Annulment..............................................39
Section 4.3 Other Remedies.........................................40
Section 4.4 Waiver of Past Defaults................................40
Section 4.5 Control by Majority....................................41
Section 4.6 Limitation on Suit.....................................41
Section 4.7 Unconditional Rights of Holders to Receive
Payment and to Convert.................................42
Section 4.8 Collection of Indebtedness and Suits for
Enforcement by the Trustee.............................42
Section 4.9 Trustee May File Proofs of Claim.......................43
Section 4.10 Restoration of Rights and Remedies.....................44
Section 4.11 Rights and Remedies Cumulative.........................44
Section 4.12 Delay or Omission Not Waiver...........................44
Section 4.13 Application of Money Collected.........................44
Section 4.14 Undertaking for Costs..................................44
Section 4.15 Waiver of Stay or Extension Laws.......................45
ARTICLE 5
THE TRUSTEE
Section 5.1 Certain Duties and Responsibilities....................45
Section 5.2 Certain Rights of Trustee..............................47
Section 5.3 Individual Rights of Trustee...........................48
Section 5.4 Money Held in Trust....................................48
Section 5.5 Trustee's Disclaimer...................................48
Section 5.6 Notice of Defaults.....................................48
Section 5.7 Reports by Trustee to Holders..........................48
Section 5.8 Compensation and Indemnification.......................49
Section 5.9 Replacement of Trustee.................................49
Section 5.10 Successor Trustee by Merger, Etc.......................50
Section 5.11 Corporate Trustee Required; Eligibility................50
Section 5.12 Collection of Claims Against the Company...............51
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ARTICLE 6
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 6.1 Company or Guarantor May Consolidate, Etc.,
Only on Certain Terms..................................51
Section 6.2 Successor Corporation Substituted......................52
Section 6.3 Guarantor to be the Sole Equityholder of the
Company................................................52
ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 7.1 Without Consent of Holders of Securities...............52
Section 7.2 With Consent of Holders of Securities..................53
Section 7.3 Compliance with Trust Indenture Act....................54
Section 7.4 Revocation of Consents and Effect of Consents
or Votes...............................................55
Section 7.5 Notation on or Exchange of Securities..................55
Section 7.6 Trustee to Sign Amendment, Etc.........................55
ARTICLE 8
MEETING OF HOLDERS OF SECURITIES
Section 8.1 Purposes for Which Meetings May Be Called..............56
Section 8.2 Call Notice and Place of Meetings......................56
Section 8.3 Persons Entitled to Vote at Meetings...................56
Section 8.4 Quorum; Action.........................................56
Section 8.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings................................57
Section 8.6 Counting Votes and Recording Action of Meetings........58
ARTICLE 9
COVENANTS
Section 9.1 Payment of Principal and Interest......................58
Section 9.2 Restrictions on Certain Payments.......................59
Section 9.3 Payment of Additional Tax Amounts......................59
Section 9.4 Maintenance of Offices or Agencies.....................59
Section 9.5 Corporate Existence....................................60
Section 9.6 [Intentionally Omitted]................................60
Section 9.7 Reports................................................60
Section 9.8 Compliance Certificate.................................61
Section 9.9 Resale of Certain Securities...........................61
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ARTICLE 10
REDEMPTION OF SECURITIES
Section 10.1 Optional Redemption....................................62
Section 10.2 Notice to Trustee......................................62
Section 10.3 Selection of Securities to Be Redeemed.................62
Section 10.4 Notice of Redemption...................................63
Section 10.5 Effect of Notice of Redemption.........................63
Section 10.6 Deposit of Redemption Price............................64
Section 10.7 Securities Redeemed in Part............................64
ARTICLE 11
REPURCHASE AT THE OPTION OF A HOLDER
Section 11.1 Repurchase Rights......................................64
Section 11.2 Conditions to the Company's Election to Pay the
Repurchase Price in ADRs...............................65
Section 11.3 Notices; Method of Exercising Repurchase Right,
Etc....................................................66
ARTICLE 12
CONVERSION OF SECURITIES
Section 12.1 Conversion Right and Conversion Price..................70
Section 12.2 Exercise of Conversion Right...........................72
Section 12.3 Fractions of ADRs......................................73
Section 12.4 Adjustment of Conversion Price.........................73
Section 12.5 Notice of Adjustments of Conversion Price..............82
Section 12.6 Notice Prior to Certain Actions........................82
Section 12.7 Guarantor to Reserve Ordinary Shares...................83
Section 12.8 Covenant as to Ordinary Shares.........................83
Section 12.9 Guarantor's Covenant Regarding the Delivery of
ADRs...................................................83
Section 12.10 Distribution of Ordinary Shares Instead of ADRs........83
Section 12.11 Taxes on Conversions...................................84
Section 12.12 Cancellation of Converted Securities...................84
Section 12.13 Effect of Reclassification, Consolidation,
Merger or Sale.........................................84
Section 12.14 Responsibility of Trustee for Conversion
Provisions.............................................85
ARTICLE 13
OTHER PROVISIONS OF GENERAL APPLICATION
Section 13.1 Trust Indenture Act Controls...........................86
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Section 13.2 Notices................................................86
Section 13.3 Communication by Holders with Other Holders............87
Section 13.4 Acts of Holders of Securities..........................88
Section 13.5 Certificate and Opinion as to Conditions
Precedent..............................................88
Section 13.6 Statements Required in Certificate or Opinion..........89
Section 13.7 Effect of Headings and Table of Contents...............90
Section 13.8 Successors and Assigns.................................90
Section 13.9 Separability Clause....................................90
Section 13.10 Benefits of Indenture..................................90
Section 13.11 Section Governing Law..................................90
Section 13.12 Submission to Jurisdiction; Consent to Service;
Waivers................................................90
Section 13.13 Counterparts...........................................91
Section 13.14 Legal Holidays.........................................91
Section 13.15 Recourse Against Others................................92
EXHIBITS
EXHIBIT A: Form of Security...............................................A-1
EXHIBIT B: Form of Investment Representation Letter.......................B-1
EXHIBIT C: Form of Regulation S Letter....................................C-1
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INDENTURE, dated as of November 18, 2002, among Teva Pharmaceutical Finance
B.V., a company duly organized and existing under the laws of the Netherlands
Antilles, having its principal office at c/o MeesPierson Trust (Curacao) N.V.,
▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles (the "Company"), Teva
Pharmaceutical Industries Limited, a corporation duly organized and existing
under the laws of Israel having its principal office at 5 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ (the "Guarantor"), and The Bank of New York, a
New York banking corporation, as Trustee (the "Trustee"), having its principal
corporate trust office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
RECITALS OF THE COMPANY AND THE GUARANTOR
The Company has duly authorized the creation of its 0.375% Convertible
Senior Debentures due 2022 (herein called the "Securities") of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.
The Guarantor has irrevocably and unconditionally guaranteed the punctual
payment when due, whether at maturity, upon redemption or by acceleration or
otherwise, of the principal of and interest and Additional Amounts, if any, on
the Securities (the "Guarantees").
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.
All things necessary to make the Guarantees, when the Guarantees are
executed by the Guarantor and delivered hereunder and duly issued by the
Guarantor and endorsed on the Securities, the valid obligation of the Guarantor,
and to make this Indenture a valid agreement of the Guarantor in accordance with
their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
------------
For all purposes of this Indenture and the Securities, the following terms
are defined as follows:
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 13.4(a).
1
"Additional Amounts" means all amounts, if any, payable pursuant to
Section 3 of the Registration Rights Agreement.
"Additional Tax Amount" has the meaning specified in Section 9.3.
"Add On Security Board Resolutions" means Board Resolutions providing
for the issuance of Add On Securities.
"Add On Security Supplemental Indenture" means a supplement to this
Indenture duly executed and delivered by the Company, the Guarantor and the
Trustee pursuant to Section 7.1(j) providing for the issuance of Add On
Securities.
"Add On Securities" means any Securities originally issued after the
date hereof pursuant to Section 2.21, including any replacement Securities
as specified in the relevant Add On Security Board Resolutions or Add On
Security Supplemental Indenture issued therefor in accordance with this
Indenture.
"Adjusted Interest Rate" means, with respect to any Reset Transaction,
the rate per annum that is the arithmetic average of the rates quoted by
two Reference Dealers selected by the Company or its successor as the rate
at which interest on the Securities should accrue so that the fair market
value, expressed in dollars, of a Security immediately after the later of:
(1) the public announcement of such Reset Transaction; or
(2) the public announcement of a change in dividend policy in
connection with such Reset Transaction;
will most closely equal the average Trading Price of a Security for the 20
Trading Days preceding the date of such public announcement; provided that
the Adjusted Interest Rate shall not be less than 0.375% per annum.
"ADSs" means the American Depositary Shares representing Deposited
Securities.
"ADR Depositary" means The Bank of New York, a New York banking
corporation, and any successor as depositary under the Deposit Agreement.
"ADRs" means the American Depositary Receipts issued under the Deposit
Agreement evidencing the ADSs.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power
to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
2
"Agent Member" has the meaning stated in Section 2.10.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means either the board of managers of the Company
or the board of directors of the Guarantor, as the case may be, or any
committee of that board empowered to act for it with respect to this
Indenture.
"Board Resolution" means a resolution duly adopted by a Board of
Directors, a copy of which, certified by the Secretary, an Assistant
Secretary or a Managing Director of the Company or the Guarantor, as the
case may be, to be in full force and effect on the date of such
certification, shall have been delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment or
Place of Conversion, means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in that Place of
Payment or Place of Conversion, as the case may be, are authorized or
obligated by law to close.
"Change of Control" means the occurrence of any of the following after
the original issuance of the Securities:
(1) the acquisition by any Person of beneficial ownership,
directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares of
capital stock of the Guarantor entitling such person to exercise 50%
or more of the total voting power of all shares of capital stock of
the Guarantor entitled to vote generally in elections of directors,
other than any such acquisition by the Guarantor, any subsidiary of
the Guarantor or any employee benefit plan of the Guarantor or any
subsidiary of the Guarantor; or
(2) any consolidation or merger of the Guarantor with or into any
other Person, any merger of another Person into the Guarantor, or any
conveyance, transfer, sale, lease or other disposition of all or
substantially all of the properties and assets of the Guarantor to
another Person, other than in each case any such transaction (x) that
does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of capital stock of the Guarantor
or (y) pursuant to which holders of capital stock of the Guarantor
immediately prior to such transaction have the entitlement to
exercise, directly or indirectly, 50% or more of the total voting
power of all shares of capital stock of the Guarantor entitled to vote
generally in the election of directors of the continuing or surviving
person immediately after such transaction;
provided, however, that a Change of Control shall not be deemed to have
occurred if (A) at least 90% of the consideration in the transaction or
transactions constituting a Change in Control consists of securities traded
or to be traded immediately following such change in control on a U.S.
national securities exchange or the Nasdaq National Market and, as a result
of such transaction or transactions, the Securities become
3
convertible solely into such securities; or (B) the Trading Price per ADR
for any five Trading Days within the period of 10 consecutive Trading Days
ending immediately after the later of the Change of Control or the public
announcement of the Change of Control, in the case of a Change of Control
described in clause (1) of this definition of Change of Control, or the
period of 10 consecutive Trading Days ending immediately before the Change
of Control, in the case of a Change of Control described in clause (2) of
this definition of Change of Control, shall equal or exceed 110% of the
Conversion Price of the Securities in effect on each such Trading Day. As
used in this definition, the term "beneficial ownership" shall have the
same meaning as such term has in Rule 13d-3 promulgated by the SEC under
the Exchange Act, and the term "Person" shall include any syndicate or
group which would be deemed to be a "person" under Section 13(d)(3) of the
Exchange Act.
"Clearstream" means Clearstream Banking, societe anonyme (formerly
Cedelbank).
"Closing Date" means November 18, 2002 or such later date on which the
Securities may be delivered pursuant to the Purchase Agreement.
"Company" means the company named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Company Notice" has the meaning specified in Section 11.3.
"Company Order" means a written order signed in the name of the
Company by any Managing Director or a duly authorized Attorney-in-Fact of
the Company, and delivered to the Trustee.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article 12.
"Conversion Period" means the period from and including the 30th
Trading Day in a fiscal quarter of the Guarantor to, but not including, the
30th Trading Day in the immediately following fiscal quarter.
"Conversion Price" has the meaning specified in Section 12.1.
"Conversion Rate" means the number of ADRs of the Guarantor into which
each $1,000 principal amount of Securities is convertible.
"Conversion Value," with respect to any date, means the product of the
Trading Price of the ADRs of the Guarantor on such date, multiplied by the
Conversion Rate then in effect.
"Corporate Trust Office" means for purposes of presentation or
surrender of Securities for payment, registration, transfer, exchange or
conversion or for service of
4
notices or demands upon the Company or for any other purpose of this
Indenture, the office of the Trustee located in The City of New York at
which at any particular time its corporate trust business shall be
administered (which at the date of this Indenture is located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇).
"corporation" means corporations, associations, limited liability
companies, companies and business trusts.
"Current Market Price" has the meaning set forth in Section 12.4(g).
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event which is, or after notice or lapse of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.19.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Deposit Agreement" means the Amended and Restated Deposit Agreement
dated February 12, 1997 among the Guarantor, the Bank of New York, as
Depositary, and Owners and Holders of American Depositary Receipts, and as
the same may be amended in accordance with its terms hereafter and, in
relation to any ADRs that are Restricted Securities, such agreement as it
may be modified to implement the restrictions on transfer of the ADRs set
forth in the Offering Memorandum dated November 13, 2002 in respect of the
Securities.
"Deposited Securities" means Ordinary Shares deposited or deemed to be
deposited under the Deposit Agreement and any and all other securities,
property and cash received by the Depositary or the Custodian in respect
thereof and at such time held under the Deposit Agreement.
"Dividend Yield" on any security (including an ADR) for any period
means the dividends paid or proposed to be paid pursuant to an announced
dividend policy on such security (or, in the case of ADRs, on the aggregate
securities represented by such ADRs) for such period divided by, if with
respect to dividends paid on such security (or, in the case of ADRs, on the
securities represented thereby), the average Trading Price of such security
during such period and, if with respect to dividends proposed to be paid on
such security (or, in the case of ADRs, on the securities represented
thereby), the Trading Price of such security on the effective date of the
related Reset Transaction.
"Dollar," "U.S. Dollar" or "U.S. $" means a dollar or other equivalent
unit in such coin or currency of the United States as at the time shall be
legal tender for the payment of public and private debts.
5
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 4.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Time" has the meaning specified in Section 12.4(f).
"fair market value" has the meaning set forth in Section 12.4(g).
"First Optional Repurchase Date" has the meaning set forth in Section
11.1.
"First Optional Repurchase Right" has the meaning set forth in Section
11.1.
"Fundamental Change Repurchase Date" has the meaning specified in
Section 11.1(b).
"Fundamental Change Repurchase Right" has the meaning specified in
Section 11.1(b).
"Global Security" has the meaning specified in Section 2.2(b).
"Guarantees" means the guarantees of the Guarantor to be endorsed on
the Securities authenticated and delivered hereunder.
"guarantee" means any obligation, contingent or otherwise, of any
Person, directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of
such Person:
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such other Person
(whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or maintain financial statement conditions
or otherwise); or
(2) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "guarantee" will not include endorsements
for collection or deposit in the ordinary course of business. The term
"guarantee" used as a verb has a corresponding meaning.
"Guarantor" means the corporation named as the "Guarantor" in the
first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Guarantor" shall mean such successor Person.
6
"Holder", when used with respect to any Security, including any Global
Security, means the Person in whose name the Security is registered in the
Register.
"Indebtedness" means, with respect to any Person:
(1) any liability for borrowed money, or evidenced by an
instrument for the payment of money, or incurred in connection with
the acquisition of any property, services or assets (including
securities), or relating to a capitalized lease obligation, other than
accounts payable or any other indebtedness to trade creditors created
or assumed by such Person in the ordinary course of business in
connection with the obtaining of materials or services;
(2) obligations under exchange rate contracts or interest rate
protection agreements;
(3) any obligations to reimburse the issuer of any letter of
credit, surety bond, performance bond or other guarantee of
contractual performance;
(4) any liability of another person of the type referred to in
clause (1), (2) or (3) of this definition which has been assumed or
guaranteed by such person; and
(5) any obligations described in clauses (1) through (4) of this
definition secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such person, regardless
of whether the indebtedness or other obligation secured thereby shall
have been assumed by such person.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof.
"Initial Purchasers" mean ▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a) (1), (2), (3)
or (7) under the Securities Act.
"Interest Payment Date" means each of May 15 and November 15 beginning
May 15, 2003; provided, however, that if any such date is not a Business
Day, the Interest Payment Date shall be the next succeeding Business Day.
"Interest Rate" means, (a) prior to the occurrence of any Reset
Transaction, 0.375% per annum, and (b) following the occurrence of a Reset
Transaction, the Adjusted Interest Rate related to such Reset Transaction
to, but not including the effective date of any succeeding Reset
Transaction.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
7
"Maturity" means the date on which the principal of such Security
becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by acceleration, conversion, call for redemption,
exercise of a Repurchase Right or otherwise.
"Nasdaq National Market" means the National Association of Securities
Dealers Automated Quotation National Market or any successor national
securities exchange or automated over-the-counter trading market in the
United States.
"Non-institutional Accredited Investor" means a Person that is an
"accredited investor" as that term is defined in Rule 501(a) (4), (5) or
(6) under the Securities Act.
"Officer" of the Guarantor means the Chairman of the Board, the Chief
Executive Officer, Chief Operating Officer, the President, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, any Vice
President, the Secretary or any Assistant Secretary of the Company or the
Guarantor, respectively and of the Company means any Managing Director or a
duly authorized Attorney-in-Fact.
"Officers' Certificate" means, (a) with respect to the Guarantor, a
certificate signed by both (1) the Chairman of the Board, the Chief
Executive Officer, the President or a Vice President and (2) so long as not
the same as the officer signing pursuant to clause (1), the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Guarantor and delivered to the Trustee; and (b)
with respect to the Company, a certificate signed by any Managing Director
of the Company or a duly authorized Attorney-in-Fact and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Company and/or the Guarantor (and may include directors or
employees of the Company and/or the Guarantor) and who is acceptable to the
Trustee, which acceptance shall not be unreasonably withheld.
"Optional Repurchase Date" has the meaning specified in Section 11.1.
"Optional Repurchase Right" has the meaning specified in Section
11.1(a).
"Ordinary Shares" means any and all equity securities of any class of
the Guarantor which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Guarantor and which is not subject to
redemption by the Guarantor; provided, however, subject to the provisions
of Section 12.10, shares issuable on conversion of Securities shall include
only shares of the class designated as Ordinary Shares, par value NIS 0.10
per share, of the Guarantor at the date of this Indenture or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Guarantor and which are not subject to
redemption by the Guarantor; provided, however, that if at any time there
shall be more than one such resulting class, the shares of each such class
then so issuable shall
8
be substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except Securities:
(1) previously canceled by the Trustee or delivered to the
Trustee for cancellation;
(2) for the payment or redemption of which money in the necessary
amount has been previously deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided, however, that if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture; and
(3) which have been paid in exchange for or in lieu of other
Securities which have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to
it that such Securities are held by a bona fide purchaser in whose
hands such Securities are valid obligations of the Company.
provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Securities are present at a
meeting of Holders of Securities for quorum purposes or have consented
to or voted in favor of any request, demand, authorization, direction,
notice, consent, waiver, amendment or modification hereunder,
Securities held for the account of the Company or of any of its
affiliates shall be disregarded and deemed not to be Outstanding,
except that in determining whether the Trustee shall be protected in
making such a determination or relying upon any such quorum, consent
or vote, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded.
"Paying Agent" has the meaning specified in Section 2.7.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
estate, unincorporated organization or government or any agency or
political subdivision thereof.
"Physical Securities" means Securities issued in definitive, fully
registered form without interest coupons, substantially in the form of
Exhibit A hereto, with the applicable legends as provided in Section 2.3.
"Place of Conversion" means any city in which any Conversion Agent is
located.
"Place of Payment" means any city in which any Paying Agent is
located.
9
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 2.14 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Purchase Agreement" means the Purchase Agreement, dated November 13,
2002, between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Record Date" means either a Regular Record Date or a Special Record
Date, as the case may be; provided that, for purposes of Section 12.4,
Record Date has the meaning specified in 12.4(g).
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the principal amount of such Security to be redeemed
pursuant to this Indenture.
"Reference Dealer" means a dealer engaged in the trading of
convertible securities.
"Reference Period" has the meaning set forth in Section 12.4(d).
"Register" has the meaning specified in Section 2.7.
"Registrar" has the meaning specified in Section 2.7.
"Registration Rights Agreement" means the Resale Registration Rights
Agreement dated as of November 18, 2002, between the Company and the
Initial Purchasers.
"Regular Record Date" for the interest on the Securities (including
Additional Amounts, if any) payable means the May 1 (whether or not a
Business Day) next preceding an Interest Payment Date on May 15 and the
November 1 (whether or not a Business Day) next preceding an Interest
Payment Date on November 15.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a Global Security representing
Securities offered and sold to non-U.S. persons outside the United States
of America in reliance on Regulation S.
"Repurchase Date" has the meaning specified in Section 11.1.
10
"Repurchase Price" has the meaning specified in Section 11.1.
"Reset Transaction" means a merger, consolidation or statutory share
exchange to which the issuer of the Ordinary Shares or ADRs into which the
Securities are then convertible is a party, a sale of all or substantially
all the assets of that entity, a recapitalization of those Ordinary Shares
or ADRs or a distribution described in Section 12.4(d), after the effective
date of which transaction or distribution the Securities would be
convertible into:
(1) Ordinary Shares or ADRs of an entity which Ordinary Shares or
ADRs had a Dividend Yield for the four fiscal quarters of such entity
immediately preceding the public announcement of such transaction or
distribution that was more than 2.5 percentage points higher then the
Dividend Yield on ADRs (or other Ordinary Shares then issuable upon
conversion of the Securities) for the four fiscal quarters preceding
the public announcement of such transaction or distribution; or
(2) Ordinary Shares or ADRs of an entity that announces a
dividend policy prior to the effective date of such transaction or
distribution which policy, if implemented, would result in a Dividend
Yield on such entity's Ordinary Shares for the next four fiscal
quarters that would result in such a 2.5 percentage points increase.
"Responsible Officer", when used with respect to the Trustee, means
any officer of the Trustee, including any vice president, assistant vice
president, secretary, assistant secretary, the treasurer, any assistant
treasurer, the managing director, any trust officer, or any other officer
of the Trustee customarily performing functions similar to those performed
by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Restricted Security" means any Security (or beneficial interest
therein) or ADR issued upon conversion of a Security until such time as:
(i) such Security (or beneficial interest therein) or the ADR
issued upon conversion thereof has been transferred pursuant to a
registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of
such sale);
(ii) the date which is two years after the original issuance date
of such Security or the Security converted into such ADR has passed;
or
(iii) such Security is a Regulation S Global Security and the
date which is 40 days after the original issuance date of such
Security or the Security converted into such ADR has passed.
"Restricted Securities Legend" has the meaning set forth in Section
2.3(a).
11
"Rule 144" means Rule 144 under the Securities Act (including any
successor rule thereof), as the same may be amended from time to time.
"Rule 144A" means Rule 144A as promulgated under the Securities Act
(including any successor rule thereof), as the same may be amended from
time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company".
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" has the meaning specified in the
Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 2.19.
"Stated Maturity" means the date specified in any Security as the
fixed date for the payment of principal on such Security or on which an
installment of interest (including Additional Amounts, if any) on such
Security is due and payable.
"subsidiary" means, with respect to any Person, a corporation more
than 50% of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or by one or more other subsidiaries, or by such
Person and one or more other subsidiaries. For the purposes of this
definition only, "voting stock" means stock which ordinarily has voting
power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any
contingency.
"Termination of Trading" will be deemed to have occurred if the
Guarantor's ADRs and its Ordinary Shares (or other securities into which
the debentures are convertible) are not listed for trading on a U.S.
national securities exchange, reported on a U.S. national securities system
subject to last sale reporting or quoted on the Nasdaq National Market.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S. Code
Section 77aaa-77bbbb), as in effect on the date of this Indenture;
provided, however, that in the event the TIA is amended after such date,
"TIA" means, to the extent such amendment is applicable to this Indenture,
the Trust Indenture Act of 1939, as so amended, or any successor statute.
"Trading Day" means:
(1) if the applicable security is listed or admitted for trading
on the New York Stock Exchange, a day on which the New York Stock
Exchange is open for business;
12
(2) if that security is not listed on the New York Stock
Exchange, a day on which trades may be made on the Nasdaq National
Market;
(3) if that security is not so listed on the New York Stock
Exchange and not quoted on the Nasdaq National Market, a day on which
the principal U.S. securities exchange on which the securities are
listed is open for business;
(4) if that security is not so listed on a U.S. securities
exchange or quoted on the Nasdaq National Market, a day on which
trades may be made on the Tel Aviv Stock Exchange; or
(5) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or Sunday or a day on
which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Trading Price" of a security on any date of determination means:
(1) the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of that security (regular way)
on the New York Stock Exchange on that date;
(2) if that security is not listed on the New York Stock Exchange
on that date, the closing sale price as reported on that date by the
Nasdaq National Market;
(3) if that security is not so listed on the New York Stock
Exchange and not quoted on the Nasdaq National Market on that date,
the closing sale price as reported on that date in the composite
transactions for the principal U.S. securities exchange on which that
security is listed;
(4) if that security is not so listed on a U.S. national or
regional securities exchange or quoted on the Nasdaq National Market
on that date, the dollar equivalent (converted at the U.S. Federal
Reserve Bank's noon buying rate on that date) of the closing sale
price (or, if no closing price is reported, the last reported sale
price) of the security on that date on the Tel Aviv Stock Exchange;
(5) if that security is not so reported, the last price quoted by
Interactive Data Corporation for that security on that date or, if
Interactive Data Corporation is not quoting such price, a similar
quotation service selected by the Company;
(6) if that security is not so quoted, the average of the
mid-point of the last bid and ask prices for that security on that
date from at least two dealers recognized as market-makers for that
security selected by the Company for this purpose;
13
(7) if such bid and ask prices are not so available, the average
of that last bid and ask prices for that security on that date from a
dealer engaged in the trading of convertible securities selected by
the Company for this purpose; or
(8) if no such bid and ask prices are available, the Conversion
Value of the Securities on that date.
"Transfer Agent" means any Person, which may be the Company,
authorized by the Company to exchange or register the transfer of
Securities.
"Trigger Event" has the meaning specified in Section 12.4(d).
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Trustee.
"Vice President", when used with respect to the Company or the
Guarantor, as the case may be, means any vice president, whether or not
designated by a number or a word or words added before or after the title
"vice president".
Section 1.2 Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Securities means the Company and on the Guarantees means
the Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
Section 1.3 Rules of Construction.
----------------------
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
14
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with accounting principles
generally accepted in the United States prevailing at the time of any
relevant computation hereunder; and
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE 2
THE SECURITIES AND THE GUARANTEES
Section 2.1 Title and Terms.
----------------
(a) The Securities shall be known and designated as the "0.375 %
Convertible Senior Debentures due 2022" of the Company. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is limited to $450,000,000, except for Add On Securities issued in
accordance with Section 2.21 and Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other Securities
pursuant to Section 2.9, 2.10, 2.11, 2.14, 7.5, 10.7, 11.1 or 12.2. The
Securities shall be issuable in denominations of $1,000 or integral multiples
thereof.
(b) The Securities shall mature on November 15, 2022.
(c) Interest shall accrue from November 18, 2002 at the Interest Rate until
the principal thereof is paid or made available for payment. Interest shall be
payable semiannually in arrears on each Interest Payment Date.
(d) Interest on the Securities shall be computed (i) for any full
semi-annual period for which a particular Interest Rate is applicable, on the
basis of a 360-day year of twelve 30-day months and (ii) for any period for
which a particular Interest Rate is applicable for less than a full semiannual
period for which interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days elapsed over a
30-day month. For purposes of determining the Interest Rate, the Trustee may
assume that a Reset Transaction has not occurred unless the Trustee has received
an Officers' Certificate stating that a Reset Transaction has occurred and
specifying the Adjusted Interest Rate then in effect.
(e) A Holder of any Security at the close of business on a Regular Record
Date shall be entitled to receive interest (including Additional Amounts, if
any) on such Security on the corresponding Interest Payment Date. A Holder of
any Security which is converted after the close of business on a Regular Record
Date and prior to the corresponding Interest Payment Date (other than any
Security whose Maturity is prior to such Interest Payment Date) shall be
entitled to receive interest (including Additional Amounts, if any) on the
principal amount of such Security, notwithstanding the conversion of such
Security prior to such Interest Payment Date. However, any such Holder which
surrenders any such Security for conversion during the period between the close
of business on such Regular Record Date and ending with the opening
15
of business on the corresponding Interest Payment Date shall be required to pay
the Company an amount equal to the interest (including Additional Amounts, if
any) on the principal amount of such Security so converted, which is payable by
the Company to such Holder on such Interest Payment Date, at the time such
Holder surrenders such Security for conversion. Notwithstanding the foregoing,
any such Holder which surrenders for conversion any Security which has been
called for redemption by the Company in a notice of redemption given by the
Company pursuant to Section 10.4 shall be entitled to receive (and retain) such
interest (including Additional Amounts, if any) and need not pay the Company an
amount equal to the interest (including Additional Amounts, if any) on the
principal amount of such Security so converted at the time such Holder
surrenders such Security for conversion.
(f) Principal of and interest on Global Securities shall be payable to the
Depositary in immediately available funds.
(g) Principal on Physical Securities shall be payable at the office or
agency of the Company maintained for such purpose, initially the Corporate Trust
Office of the Trustee. Interest (including Additional Amounts, if any) on
Physical Securities will be payable by (i) U.S. Dollar check drawn on a bank in
The City of New York mailed to the address of the Person entitled thereto as
such address shall appear in the Register, or (ii) upon application to the
Registrar not later than the relevant Record Date by a Holder of an aggregate
principal amount of Securities in excess of $5,000,000, wire transfer in
immediately available funds, which application shall remain in effect until the
Holder notifies, in writing, the Registrar to the contrary.
(h) The Securities shall be redeemable at the option of the Company as
provided in Article 10.
(i) The Securities shall be repurchaseable by the Company at the option of
Holders as provided in Article 11.
(j) The Securities shall be convertible at the option of the Holders as
provided in Article 12.
Section 2.2 Form of Securities.
-------------------
(a) Except as otherwise provided pursuant to this Section 2.2, the
Securities are issuable in fully registered form without coupons in
substantially the form of Exhibit A hereto, with such applicable legends as are
provided for in Section 2.3. The Securities are not issuable in bearer form. The
terms and provisions contained in the form of Security shall constitute, and are
hereby expressly made, a part of this Indenture and to the extent applicable,
the Company, the Guarantor and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby. Any of the Securities may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made
16
pursuant thereto or with any rule or regulation of any securities exchange or
automated quotation system on which the Securities may be listed or designated
for issuance, or to conform to usage.
(b) The Securities and the Guarantees are being offered and sold by the
Company pursuant to the Purchase Agreement. The Securities shall be issued
initially in the form of permanent global Securities in fully registered form
without interest coupons, substantially in the form of Exhibit A hereto, with
the applicable legends as provided in Section 2.3 (each a "Global Security" and
collectively the "Global Securities"). Each Global Security shall be duly
executed by the Company and authenticated and delivered by the Trustee, shall
have endorsed thereon the Guarantees executed by the Guarantor and shall be
registered in the name of the Depositary or its nominee and retained by the
Trustee, as Custodian, at its Corporate Trust Office, for credit to the accounts
of the Agent Members holding the Securities evidenced thereby. The aggregate
principal amount of the Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as Custodian, and
of the Depositary or its nominee, as hereinafter provided.
Physical Securities acquired by QIBs in accordance with Rule 144A or in
reliance on Regulation S may be exchanged for interests in Global Securities
pursuant to Section 2.11(b). Physical Securities shall be duly executed by the
Company and authenticated and delivered by the Trustee shall have endorsed
thereon the Guarantees executed by the Guarantor and shall be registered in the
name of the Institutional Accredited Investor purchasing such Security.
Section 2.3 Legends.
--------
(a) Restricted Securities Legends.
Each Restricted Security issued hereunder shall bear the legend set forth
in Section 2.3(a)(i) and in addition each Restricted Security other than a
Regulation S Global Security or ADRs issued upon conversion of a Security
represented by a Regulation S Global Security shall, upon issuance, bear the
legend set forth in Section 2.3(a)(ii) (each such legend, a "Restricted
Securities Legend"), and such legend shall not be removed except as provided in
Section 2.3(a)(iii). Restricted Securities shall be subject to the restrictions
on transfer set forth in Section 2.11 and the Holder of each such Restricted
Security, by such Holder's acceptance thereof, shall be deemed to have agreed to
be bound by all such restrictions on transfer.
As used in Section 2.3(a), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted Security.
(i) Restricted Securities Legend for Securities.
Except as provided in Section 2.3(a)(iii), each certificate evidencing a
Restricted Security (and all Securities issued in exchange therefor or
substitution thereof) shall bear a Restricted Securities Legend in substantially
the form set forth in Clause (A) if such certificate represents Securities and
in substantially the form set forth in clause (B) if such certificate represents
ADRs:
(A) THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"),
17
AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, THE SECURITIES ACT, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION AND IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS CONTAINED IN THE INDENTURE UNDER WHICH THIS DEBENTURE WAS
ISSUED.
(B) THE AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, THE
SECURITIES ACT, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION AND IN ACCORDANCE WITH
THE TRANSFER RESTRICTIONS CONTAINED IN THE DEPOSIT AGREEMENT UNDER WHICH
THIS AMERICAN DEPOSITARY RECEIPT WAS ISSUED.
(ii) Additional Restricted Securities Legend.
Except as provided in Section 2.3(a)(iii), each certificate evidencing a
Restricted Security other than a Regulation S Global Security or ADRs issued
upon conversion of a Security represented by a Regulation S Global Security
shall bear an additional Restricted Securities Legend in substantially the form
set forth in Clause (A) if such certificate represents Securities and in
substantially the form set forth in clause (B) if such certificate represents
ADRs:
(A) IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY (X)
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY OR (Y) BY A
HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE
MONTHS PRECEDING THE DATE OF SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER), [THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE).](1)
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
----------
(1) Such bracketed language shall only appear on Securities issued in the form
of a Physical Security.
18
LEGAL OPINIONS OR OTHER INFORMATION AS TEVA PHARMACEUTICAL FINANCE B.V. MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
(B) PRIOR TO ANY TRANSFER (X) WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THE SECURITY UPON THE CONVERSION OF WHICH THE AMERICAN DEPOSITARY SHARES
EVIDENCED HEREBY WAS ISSUED OR (Y) BY A HOLDER THAT WAS AN AFFILIATE OF
TEVA PHARMACEUTICAL INDUSTRIES LIMITED AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, OTHER THAN A TRANSFER PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER ABOVE, THE HOLDER MUST FURNISH TO SUCH TRANSFER AGENT, (OR ANY
SUCCESSOR TRANSFER AGENT, AS APPLICABLE) SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS TEVA PHARMACEUTICAL INDUSTRIES LIMITED MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
(iii) Removal of the Restricted Securities Legends.
Each Security and certificate representing ADRs issued upon conversion of
any Security (other than a certificate representing ADRs issued upon conversion
of a Security that was not a Restricted Security) shall bear the applicable
Restricted Securities Legend set forth in Section 2.3(a)(i) or 2.3(a)(ii), as
the case may be, until it is no longer a Restricted Security and the Holder
thereof gives notice thereof to the Trustee or any ADR Depositary for the ADRs,
as applicable.
In the event Rule 144(k) as promulgated under the Securities Act is amended
to shorten the two-year period under Rule 144(k), then, the references in the
restrictive legends set forth above to "TWO YEARS", and in the corresponding
transfer restrictions set forth in Section 2.11, the Securities and the ADRs
will be deemed to refer to such shorter period, from and after receipt by the
Trustee of an Officers' Certificate and an Opinion of Counsel. As soon as
practicable after the Company knows of the effectiveness of any such amendment
to shorten the two-year period under Rule 144(k), unless such changes would
otherwise be prohibited by, or would cause a violation of, the federal
securities laws applicable at the time, the Company will provide to the Trustee
an Officers' Certificate and an Opinion of Counsel as to the effectiveness of
such amendment and the effectiveness of such change to the restrictive legends
and transfer restrictions.
Notwithstanding the foregoing, the Restricted Securities Legend may be
removed from any Security or any certificate representing ADRs issued upon
conversion of any Security
19
if there is delivered to the Company such satisfactory evidence, which may
include an opinion of independent counsel, as may be reasonably required by the
Company, that neither such legend nor the restrictions on transfer set forth
therein are required to ensure that transfers of such Security or ADRs issued
upon conversion of Securities, as the case may be, will not violate the
registration requirements of the Securities Act. Upon provision of such
satisfactory evidence, at the written direction of the Company, (i) in the case
of a Security, the Trustee shall authenticate and deliver in exchange for such
Security another Security or Securities having an equal aggregate principal
amount that does not bear such legend or (ii) in the case of a certificate
representing ADRs, the ADR Depositary shall deliver in exchange for the
certificate or certificates representing such ADRs bearing such legend, one or
more new certificates representing a like aggregate number of ADRs that do not
bear such legend. If the Restricted Securities Legend has been removed from a
Security or certificates representing ADRs issued upon conversion of any
Security as provided above, no other Security issued in exchange for all or any
part of such Security or certificates representing ADRs issued upon conversion
of such Security shall bear such legend, unless the Company has reasonable cause
to believe that such other Security is a "restricted security" (or such ADRs are
"restricted securities") within the meaning of Rule 144 or Regulation S and
instructs the Trustee in writing to cause a Restricted Securities Legend to
appear thereon.
Any Security (or Security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the Restricted
Securities Legend set forth in Section 2.3(a)(i) as set forth therein have been
satisfied may, upon surrender of such Security for exchange to the Registrar in
accordance with the provisions of Section 2.9, be exchanged for a new Security
or Securities, of like tenor and aggregate principal amount, which shall not
bear the Restricted Securities Legend required by Section 2.3(a)(i).
Any certificate representing ADRs issued upon conversion of any Security as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the Restricted
Securities Legend set forth in Section 2.3(a)(ii) as set forth therein have been
satisfied may, upon surrender of the certificates representing such ADRs for
exchange in accordance with the procedures of the ADR Depositary, be exchanged
for a new certificate or certificates representing a like aggregate number of
ADRs, which shall not bear the Restricted Securities Legend required by Section
2.3(a)(ii).
(b) Global Security Legend.
Each Global Security shall also bear the following legend on the face
thereof:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
REFERRED TO HEREIN. THIS GLOBAL SECURITY MAY NOT BE EXCHANGED OR
TRANSFERRED, IN WHOLE BUT NOT IN PART, FOR A SECURITY REGISTERED IN THE
NAME OF ANY PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH IN THE INDENTURE.
BENEFICIAL INTERESTS IN THIS GLOBAL
20
SECURITY MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE INDENTURE.
(c) Legend for Physical Securities.
Physical Securities, in addition to the legend set forth in Section
2.3(a)(i), will also bear a legend substantially in the following form:
THIS SECURITY WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN
A GLOBAL SECURITY UNLESS THE HOLDER OF THIS SECURITY, SUBSEQUENT TO SUCH
EXCHANGE, WILL HOLD EITHER NO DEBENTURES OR A MINIMUM AGGREGATE BENEFICIAL
INTEREST IN THE DEBENTURES OF AT LEAST TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000). IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR SUCH OPINIONS OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION
AS IT MAY REASONABLY REQUIRE IN FORM REASONABLY SATISFACTORY TO IT AS
PROVIDED FOR IN THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIED WITH
THE RESTRICTIONS PROVIDED FOR IN THE INDENTURE.
Section 2.4 Form of Guarantee.
------------------
A Guarantee substantially in the following form shall be endorsed on the
reverse of each Security:
Teva Pharmaceutical Industries Limited (the "Guarantor") hereby
unconditionally and irrevocably guarantees to the Holder of this Security
the due and punctual payment of the principal of and interest (including
Additional Amount, if any), on this Security, when and as the same shall
become due and payable, whether at maturity or upon redemption or upon
declaration of acceleration or otherwise, according to the terms of this
Security and of the Indenture. The Guarantor agrees that in the case of
default by the Company in the payment of any such principal or interest
(including Additional Amount, if any), the Guarantor shall duly and
punctually pay the same. The Guarantor hereby agrees that its obligations
hereunder shall be absolute and unconditional irrespective of any extension
of the time for payment of this Security, any modification of this
Security, any invalidity, irregularity or unenforceability of this Security
or the Indenture, any failure to enforce the same or any waiver,
modification, consent or indulgence granted to the Company with respect
thereto by the Holder of this Security or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge
of a surety or guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event
of merger or bankruptcy of the Company, any right to require a demand or
proceeding first against the Company, protest or notice with respect to
this Security or the indebtedness evidenced hereby and all demands
whatsoever, and covenants that this guarantee will not be discharged as
21
to this security except by payment in full of the principal of and interest
(including Additional Amount, if any) on this Security.
For so long as any Securities are outstanding and subject to Section
12.9 of the Indenture, the Guarantor will guarantee the delivery of the
ADRs issuable upon conversion of the Securities pursuant to the terms of
the Indenture and the Securities.
The Guarantor shall be subrogated to all rights of the holders against
the Company in respect of any amounts paid by the Guarantor pursuant to the
provisions of the Guarantees or this Indenture; provided, however, that the
Guarantor hereby waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment hereunder (i) to be
subrogated to the rights of a Holder against the Company with respect to
such payment or otherwise to be reimbursed, indemnified or exonerated by
the Company in respect thereof or (ii) to receive any payment in the nature
of contribution or for any other reason, from any other obligor with
respect to such payment, in each case, until the principal of and interest
(including Additional Amount, if any) on this Security shall have been paid
in full.
The Guarantees shall not be valid or become obligatory for any purpose
with respect to this Security until the certificate of authentication on
this Security shall have been signed by the Trustee.
The Guarantees shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the principles
of conflicts of law thereof.
IN WITNESS WHEREOF, Teva Pharmaceutical Industries Limited has caused
the Guarantees to be signed manually or by facsimile by its duly authorized
officers.
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
By ___________________________________
Section 2.5 Guarantee of Securities.
------------------------
(a) The Guarantor hereby unconditionally and irrevocably guarantees to each
Holder the due and punctual payment of the principal of and interest (including
Additional Amounts, if any) on such Securities, when and as the same shall
become due and payable, whether at maturity or upon redemption or upon
declaration of acceleration or otherwise, according to the terms of such
Securities and of this Indenture. The Guarantor agrees that in case of default
by the Company in the payment of any such principal or interest (including
Additional
22
Amounts, if any), the Guarantor shall duly and punctually pay the same. The
Guarantee set forth in this Section 2.5 is a Guarantee of payment and not of
collection. The Guarantor hereby agrees that its obligations hereunder shall be
absolute and unconditional irrespective of any extension of the time for payment
of any such Securities, any modification of any such Security, any invalidity,
irregularity or unenforceability of any such Securities or this Indenture, any
failure to enforce the same or any waiver, modification, consent or indulgence
granted to the Company with respect thereto by the Holder of such Security or
the Trustee or any other circumstances which may otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor. The Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of merger or bankruptcy of the Company, any right to require a
demand or proceeding first against the Company, protest or notice with respect
to any such Security or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be discharged as to any
such Security except by payment in full of the principal of and interest
(including Additional Amounts, if any) on such Security.
The Guarantor shall be subrogated to all rights of the Holders against the
Company in respect of any amounts paid by the Guarantor pursuant to the
provisions of the Guarantee or this Indenture; provided, however, that the
Guarantor hereby waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment hereunder (i) to be
subrogated to the rights of a Holder against the Company with respect to such
payment or otherwise to be reimbursed, indemnified or exonerated by the Company
in respect thereof or (ii) to receive any payment in the nature of contribution
or for any other reason, from any other obligor with respect to such payment, in
each case, until the principal of and interest (including Additional Amounts, if
any) on all Securities issued hereunder shall have been paid in full.
The Guarantor, and by its acceptance hereof each Holder, hereby confirms
that it is the intention of all such parties that the Guarantees not constitute
a fraudulent transfer of conveyance for the purposes of title 11 of the United
States Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any other applicable federal, state or foreign law similar to
any of the foregoing. To effectuate the foregoing intention, the Holders and the
Guarantor hereby irrevocably agree that the obligations of the Guarantor under
this Section 2.5 shall be limited to such maximum amount as will, after giving
effect to all other contingent and fixed liabilities of the Guarantor, result in
the obligations of the Guarantor under the Guarantees not constituting a
fraudulent transfer or conveyance under applicable federal or state law.
The Guarantee set forth in this Section shall not be valid or become
obligatory for any purpose with respect to a Security until the certificate of
authentication on such Security shall have been signed by the Trustee.
(b) For so long as any Securities are outstanding and subject to Section
12.9, the Guarantor will guarantee the delivery of the ADRs issuable upon
conversion of the Securities pursuant to Article 12 hereunder.
23
Section 2.6 Execution, Authentication, Delivery and Dating of the
-----------------------------------------------------
Securities.
-----------
An Officer shall execute the Securities on behalf of the Company by manual
or facsimile signature. If the Officer whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security
shall be valid nevertheless.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities as in this Indenture
provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture, or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by or on behalf of the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee may appoint an authenticating agent or agents reasonably
acceptable to the Company with respect to the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.
Section 2.7 Registrar and Paying Agent.
---------------------------
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where Securities may be presented for payment (the "Paying
Agent"). The Registrar shall keep a register of the Securities (the "Register")
and of their transfer and exchange. The Company may appoint one or more
co-Registrars and one or more additional Paying Agents for the Securities. The
term "Paying Agent" includes any additional paying agent and the term
"Registrar" includes any additional registrar. The Company may change any Paying
Agent or Registrar without prior notice to any Holder.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of or
interest (including Additional Amounts, if any) 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 provided in this Indenture;
(2) give the Trustee notice of any Default by the Company in the
making of any payment of principal or interest (including Additional
Amounts, if any); and
24
(3) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company shall give prompt written notice to the Trustee of the name and
address of any Agent who is not a party to this Indenture. If the Company fails
to appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any Affiliate of the Company may act as Paying
Agent or Registrar; provided, however, that none of the Company, its
subsidiaries or the Affiliates of the foregoing shall act:
(1) as Paying Agent in connection with redemptions, offers to purchase
and discharges, except as otherwise specified in this Indenture, and
(2) as Paying Agent or Registrar if a Default or Event of Default has
occurred and is continuing.
The Company hereby initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
Section 2.8 Paying Agent to Hold Assets in Trust.
-------------------------------------
Not later than 10:00 a.m. (New York City time) on each due date of the
principal and interest (including Additional Amounts, if any) on any Securities,
the Company shall deposit with one or more Paying Agents money in immediately
available funds in an aggregate amount sufficient to pay the principal and
interest (including Additional Amounts, if any) due on such date. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company)
shall have no further liability for the money so paid over to the Trustee.
If the Company shall act as a Paying Agent, it shall, prior to or on each
due date of the principal of or interest (including Additional Amounts, if any)
on any of the Securities, segregate and hold in trust for the benefit of the
Holders a sum sufficient with monies held by all other Paying Agents, to pay the
principal or interest (including Additional Amounts, if any) so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as
provided in this Indenture, and shall promptly notify the Trustee of its action
or failure to act.
Section 2.9 General Provisions Relating to Transfer and Exchange.
-----------------------------------------------------
The Securities are issuable only in registered form. A Holder may transfer
a Security only by written application to the Registrar stating the name of the
proposed transferee and otherwise complying with the terms of this Indenture. No
such transfer shall be effected until, and such transferee shall succeed to the
rights of a Holder only upon, final acceptance and registration of the transfer
by the Registrar in the Register. Furthermore, any Holder of a Global Security
shall, by acceptance of such Global Security, agree that transfers of beneficial
interests in such Global Security may be effected only through a book-entry
system maintained by the Holder of such Global Security (or its agent) and that
ownership of a beneficial interest in the Global Security shall be required to
be reflected in a book-entry. Notwithstanding the foregoing, in the case of a
Restricted Security, a beneficial interest in a Global Security being
transferred in
25
reliance on an exemption from the registration requirements of the Securities
Act other than in accordance with Rule 144, Regulation S or Rule 144A may only
be transferred for a Physical Security.
When Securities are presented to the Registrar with a request to register
the transfer or to exchange them for an equal aggregate principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if the requirements hereunder for
such transactions are met (including that such Securities are duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder). Subject to Section 2.6, to permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange or redemption of the Securities, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.16, 7.5 or 10.7).
Neither the Company nor the Registrar shall be required to exchange or
register a transfer of any Securities:
(1) for a period of 15 Business Days prior to the day of any selection
of Securities for redemption under Article 10;
(2) so selected for redemption or, if a portion of any Security is
selected for redemption, the portion thereof selected for redemption; or
(3) surrendered for conversion or, if a portion of any Security is
surrendered for conversion, the portion thereof surrendered for conversion.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Agent Members or
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
Section 2.10 Book-Entry Provisions for the Global Securities.
-------------------------------------------------
(a) The Global Securities initially shall:
(1) be registered in the name of the Depositary (or a nominee
thereof);
(2) be delivered to the Trustee as custodian for such Depositary; and
(3) bear the Restricted Securities Legend set forth in Section
2.3(a)(i).
26
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under such Global
Security, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
contained herein shall prevent the Company, the Trustee or any agent of the
Company or Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and the Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security. With respect to any
Global Security deposited on behalf of the subscribers for the Securities
represented thereby with the Trustee as custodian for the Depositary for credit
to their respective accounts (or to such other accounts as they may direct) at
Euroclear or Clearstream, the provisions of the "Operating Procedures of the
Euroclear System" and the "Terms and Conditions Governing Use of Euroclear" and
the "Management Regulations" and "Instructions to Participants" of Clearstream,
respectively, shall be applicable to the Global Securities.
(b) The Holder of a Global Security may grant proxies and otherwise
authorize any Person, including DTC Participants and Persons that may hold
interests through DTC Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(c) A Global Security may not be transferred, in whole or in part, to any
Person other than the Depositary (or a nominee thereof), and no such transfer to
any such other Person may be registered. Beneficial interests in a Global
Security may be transferred in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.11.
(d) If at any time:
(1) the Depositary notifies the Company in writing that it is no
longer willing or able to continue to act as Depositary for the Global
Securities, or the Depositary ceases to be a "clearing agency" registered
under the Exchange Act and a successor depositary for the Global Securities
is not appointed by the Company within 90 days of such notice or cessation;
(2) the Company, at its option, notifies the Trustee in writing that
it elects to cause the issuance of the Physical Securities under this
Indenture in exchange for all or any part of the Securities represented by
a Global Security or Global Securities; or
(3) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depositary for the issuance of
Physical Securities in exchange for such Global Security or Global
Securities;
the Depositary shall surrender such Global Security or Global Securities to the
Trustee for cancellation and the Company shall execute, and the Trustee, upon
receipt of an Officers' Certificate and Company Order for the authentication and
delivery of Securities, shall authenticate and deliver in exchange for such
Global Security or Global Securities, Physical
27
Securities in an aggregate principal amount equal to the aggregate principal
amount of such Global Security or Global Securities. Such Physical Securities
shall be registered in such names as the Depositary shall identify in writing as
the beneficial owners of the Securities represented by such Global Security or
Global Securities (or any nominee thereof).
(e) Notwithstanding the foregoing, in connection with any transfer of
beneficial interests in a Global Security to the beneficial owners thereof
pursuant to Section 2.10(d), the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of such Global Security
in an amount equal to the principal amount of the beneficial interests in such
Global Security to be transferred.
Section 2.11 Special Transfer Provisions.
----------------------------
No Restricted Security may be resold, pledged or otherwise transferred
except (a) to the Company or any subsidiary thereof, (b) to a QIB in compliance
with Rule 144A, (c) outside the United States in compliance with Regulation S,
(d) pursuant to an exemption from registration under the Securities Act to an
Institutional Accredited Investor or Non-institutional Accredited Investor that
is purchasing debentures in an aggregate principal amount of at least $250,000
and that, prior to such transfer, furnishes to the Bank of New York, as trustee
(or any successor trustee, as applicable), a signed certificate substantially in
the form of Exhibit B, (e) pursuant to the exemption from registration provided
by Rule 144 (if available) or (f) pursuant to a registration statement which has
been declared effective under the securities act and which continues to be
effective at the time of such transfer. The following provisions shall apply to
any sale, pledge or other transfer of a Security that is a Restricted Security,
unless it is being sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such sale):
(a) Transfers of Securities to a QIB.
---------------------------------
Each transferee receiving an interest in a Restricted Security that is not
a Regulation S Global Security will be deemed to have represented and warranted
that: (a) it is purchasing such Security for its own account or an account with
respect to which it exercises sole investment discretion, in each case for
investment and not with a view to distribution; (b) it and any such account is a
"Qualified Institutional Buyer" within the meaning of Rule 144A under the
Securities Act of 1933; (c) it is aware that the sale to it is being made in
reliance on Rule 144A; (d) it acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information; and (e) it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A. The following
provisions shall apply to any sale, pledge or other transfer of a Security that
is a Restricted Security, unless it is being sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such sale):
(b) Transfers of Securities to an Institutional Accredited Investor which is
------------------------------------------------------------------------
not a QIB or to a Non-institutional Accredited Investor.
--------------------------------------------------------
28
The following provisions shall apply with respect to the registration of
any proposed transfer of Securities that are Restricted Securities to (x) an
Institutional Accredited Investor which is not a QIB, or (y) a Non-institutional
Accredited Investor:
(i) The Registrar shall register the transfer if the proposed
transferee has delivered to the Trustee (A) a certificate substantially in
the form of Exhibit B annexed hereto and (B) such opinion of counsel and
other evidence satisfactory to the Company that such transfer is in
compliance with the Securities Act, as requested by the Company.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in Global Securities, upon receipt by the Registrar of
the documents required by clause (i) of this Section 2.11(a) and
instructions given in accordance with the procedures of Euroclear or
Clearstream, if applicable, the Depositary and the Registrar, the Registrar
shall reflect on its books and records, and Euroclear or Clearstream, if
applicable, or the Registrar shall instruct the Depositary to note or cause
to be noted on such Global Securities, the date and a decrease in the
principal amount of the Global Securities in an amount equal to the
principal amount of the beneficial interest in the Global Securities to be
transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Physical Securities of like tenor and
amount registered in the name of the transferee.
(iii) If the Securities to be transferred consist of Physical
Securities, upon receipt by the Registrar of the documents required by
clause (i) of this Section 2.11(a), the Company shall execute and the
Trustee shall authenticate and deliver, new Physical Securities registered
in the name of the transferee and the Trustee shall cancel the Physical
Securities presented for transfer.
(c) Transfer of Securities to a QIB or Outside the United States in
---------------------------------------------------------------
Accordance with Regulation S.
-----------------------------
The following provisions shall apply with respect to the registration of
any proposed transfer of Securities to (x) a QIB or (y) outside the United
States in accordance with Regulation S:
(i) If the Securities to be transferred consist of a beneficial
interest in the Global Securities, the transfer of such interest may be
effected only through the book-entry systems maintained by Euroclear and
Clearstream, if applicable, and the Depositary.
(ii) The Registrar shall register the transfer if such transfer is
being made:
(A) in compliance with the provisions of Rule 144A and, if the
Securities to be transferred consist of Physical Securities, the
transferee has signed the certification provided for on the form of
Security stating (or has otherwise advised the Company and the
Registrar in writing) that:
29
(1) it is purchasing the Securities for its own account or an
account with respect to which it exercises sole investment discretion,
in each case for investment and not with a view to distribution;
(2) it and any such account is a QIB within the meaning of Rule
144A;
(3) it is aware that the sale to it is being made in reliance on
Rule 144A;
(4) it acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule 144A or has
determined not to request such information; and
(5) it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A, or
(B) in compliance with Regulation S to a transferee who has
signed a certification substantially in the form of Exhibit C annexed
hereto or, if the Securities to be transferred consist of Physical
Securities, has signed the certification provided for on the form of
Security.
In addition, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Global Securities in an amount
equal to the aggregate principal amount of the Physical Securities to be
transferred, and the Trustee shall cancel the Physical Securities so
transferred.
(d) Other Exchanges.
----------------
In the event that Global Securities are exchanged for Securities in
definitive registered form pursuant to Section 2.10 prior to the
effectiveness of a Shelf Registration Statement with respect to such
Securities, such Securities may be exchanged only in accordance with the
provisions of clauses (a) and (b) above (including the certification
requirements intended to ensure that such transfers comply with Rule 144A
or Regulation S, as the case may be) and such other procedures as may from
time to time be adopted by the Company.
(e) General.
--------
By its acceptance of any Security bearing the Restricted Securities
Legend, each Holder of such a Security acknowledges the restrictions on
transfer of such Security set forth in this Indenture and agrees that it
will transfer such Security only as provided in this Indenture. The
Registrar shall not register a transfer of any Security unless such
transfer complies with the restrictions on transfer of such Security set
forth in this Indenture. The Registrar shall be entitled to receive and
conclusively rely on written instructions from the Company verifying that
such transfer complies with such restrictions on transfer. In connection
with any transfer of Securities, each Holder agrees by its acceptance
30
of the Securities to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to
an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; provided that the Registrar shall not
be required to determine (but may conclusively rely on a determination made
by the Company with respect to) the sufficiency of any such certifications,
legal opinions or other information.
The Registrar shall retain copies of all certifications, letters, notices
and other written communications received pursuant to Section 2.10 hereof or
this Section 2.11 in accordance with its customary procedures for the retention
of records relating to the transfer of securities. The Company shall have the
right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
Section 2.12 Holder Lists.
-------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with Section 312(a) of the TIA. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee prior to
or on each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders relating to such
Interest Payment Date or request, as the case may be.
Section 2.13 Persons Deemed Owners.
----------------------
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Holder as the owner of such Security for the purpose of receiving
payment of principal of and interest (including Additional Amounts, if any) on
such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and notwithstanding any notice of ownership or writing
thereon, or any notice of previous loss or theft or other interest therein.
Section 2.14 Mutilated, Destroyed, Lost or Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there is delivered to the Company and the Trustee
(1) evidence to their satisfaction of the destruction, loss or theft
of any Security, and
(2) such security or indemnity as may be required by them to save each
of them and any agent of either of them harmless, then, in the absence of
actual notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and, upon
request, the
31
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost
or stolen Security, a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the condition set forth in the preceding
paragraph.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.14 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 such new
Security shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section 2.14 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 2.15 Treasury Securities.
--------------------
In determining whether the Holders of the requisite principal amount of
Outstanding Securities are present at a meeting of Holders for quorum purposes
or have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Securities owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
determination as to the presence of a quorum or upon any such request, demand,
authorization, direction, notice, consent or waiver, only such Securities of
which the Trustee has received written notice and are so owned shall be so
disregarded.
Section 2.16 Temporary Securities.
---------------------
Pending the preparation of Securities in definitive form, the Company may
execute and the Trustee shall, upon written request of the Company, authenticate
and deliver temporary Securities (printed or lithographed). Temporary Securities
shall be issuable in any authorized denomination, and substantially in the form
of the Securities in definitive form but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Company. Every such temporary Security shall be executed by
the Company and authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the Securities in
definitive form. Without unreasonable delay, the Company will execute and
deliver to the Trustee Securities in definitive form (other than in the case of
Securities in global form) and thereupon any or all temporary
32
Securities (other than any such Securities in global form) may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 9.4 and the Trustee shall authenticate and deliver in exchange for
such temporary Securities an equal aggregate principal amount of Securities in
definitive form. Such exchange shall be made by the Company at its own expense
and without any charge therefor. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits and subject to the same
limitations under this Indenture as Securities in definitive form authenticated
and delivered hereunder.
Section 2.17 Cancellation.
-------------
All securities surrendered for payment, redemption, repurchase, conversion,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee. All Securities so delivered shall
be canceled promptly by the Trustee, and no Securities shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Indenture. Upon written instructions of the Company, the Trustee shall dispose
of canceled Securities in accordance with its procedures for the disposition of
cancelled securities in effect as of the date of such disposition and, after
such disposition, shall deliver a certificate of such destruction to the
Company. If the Company shall acquire any of the Securities, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless the same are delivered to the Trustee for
cancellation.
Section 2.18 CUSIP Numbers.
--------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and the Trustee shall use CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any such notice
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Company shall promptly notify the Trustee of
any change in the CUSIP numbers.
Section 2.19 Defaulted Interest.
-------------------
If the Company fails to make a payment of interest (including Additional
Amounts, if any) on any Security when due and payable ("Defaulted Interest"), it
shall pay such Defaulted Interest plus (to the extent lawful) any interest
payable on the Defaulted Interest, in any lawful manner. It may elect to pay
such Defaulted Interest, plus any such interest payable on it, to the Persons
who are Holders of such Securities on which the interest is due on a subsequent
Special Record Date. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each such Security. The
Company shall fix any such Special Record Date and payment date for such
payment. At least 15 days before any such Special Record Date, the Company shall
mail to Holders affected thereby a notice that states the Special Record Date,
the Interest Payment Date, and amount of such interest (and such Additional
Amounts, if any) to be paid.
33
Section 2.20 Execution of Guarantees.
------------------------
To evidence its Guarantees specified in Section 2.5 to the Holders of
Securities, the Guarantor hereby agrees to execute the Guarantees in
substantially the form above recited to be endorsed on each Securities. If the
Company shall execute Physical Securities in accordance with Section 2.10, the
Guarantor shall execute the Guarantees in substantially the form above recited
to be endorsed on each such Securities. Such Guarantees shall be executed on
behalf of the Guarantor by its Chief Executive Officer, its President, its Chief
Operating Officer, its Chief Financial Officer or one of its Vice Presidents.
The signature of any of these officers on the Guarantee may be manual or
facsimile.
If an officer of the Guarantor whose signature is on the Guarantees
endorsed on a Security no longer holds that office at the time the Trustee
authenticates such Security or at any time thereafter, the Security shall be
valid nevertheless.
Section 2.21 Add On Securities.
------------------
The Company may, from time to time, subject to compliance with any other
applicable provisions of this Indenture, without the consent of the Holders,
create and issue pursuant to this Indenture additional debentures ("Add On
Securities") having terms identical to those of the Outstanding Securities,
except that Add On Securities:
(i) may have a different issue date from other Outstanding Securities;
(ii) may have a different amount of interest payable on the first
Interest Payment Date after issuance than is payable on other
Outstanding Securities; and
(iii) may have terms specified in the Add On Security Board Resolutions or
Add On Security Supplemental Indenture for such Add On Securities
making appropriate adjustments to this Article 2 and Exhibit A (and
related definitions) applicable to such Add On Securities in order
to conform to and ensure compliance with the Securities Act (or
other applicable securities laws) and any registration rights or
similar agreement applicable to such Add On Securities, which are
not adverse in any material respect to the Holder of any Outstanding
Securities (other than such Add On Securities) and which shall not
affect the rights or duties of the Trustee.
In authenticating any Add On Securities, and accepting the additional
responsibilities under this Indenture in relation to such Add On Securities, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon:
(i) the Add On Security Board Resolutions or Add On Security
Supplemental Indenture relating thereto;
(ii) an Officers' Certificate complying with Section 13.5; and
34
(iii) an Opinion of Counsel complying with Section 13.5 stating,
(1) that the forms of such Securities have been established by or pursuant
to Add On Security Board Resolutions or by an Add On Security Supplemental
Indenture, as permitted by this Section 2.21 and in conformity with the
provisions of this Indenture;
(2) that the terms of such Securities have been established by or pursuant
to Add On Security Board Resolutions or by an Add On Security Supplemental
Indenture, as permitted by this Section 2.21 and in conformity with the
provisions of this Indenture;
(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any customary
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided in the Indenture, enforceable in accordance with their respective
terms, except to the extent that the enforcement of such obligations may be
subject to bankruptcy laws or insolvency laws or other similar laws,
general principles of equity and such other qualifications as such counsel
shall conclude are customary or do not materially affect the rights of the
Holders of such Securities;
(4) that all laws and requirements in respect of the execution and delivery
of the Securities have been complied with; and
(5) such other matters as the Trustee may reasonably request.
If such forms or terms have been so established by or pursuant to Add On
Security Board Resolutions or an Add On Security Supplemental Indenture, the
Trustee shall have the right to decline to authenticate and deliver any
Securities:
(1) if the Trustee, being advised by counsel, determines that such
action may not lawfully be taken;
(2) if the Trustee by its board of directors, executive committee or a
committee of directors or trust officers in good faith determines that such
action would expose the Trustee to personal liability to Holders of any
Outstanding Securities; or
(3) if the issue of such Add On Securities pursuant to this Indenture
will affect the Trustee's own rights, duties and immunities under the
Securities and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
Notwithstanding anything in this Section 2.21, the Company may not issue
Add On Securities if an Event of Default shall have occurred and be continuing.
35
ARTICLE 3
SATISFACTION AND DISCHARGE
Section 3.1 Satisfaction and Discharge of Indenture.
----------------------------------------
When:
(1) the Company shall deliver to the Trustee for cancellation all
Securities previously authenticated (other than any Securities which have
been mutilated, destroyed, lost or stolen and in lieu of, or in
substitution for which, other Securities shall have been authenticated and
delivered) and not previously canceled; or
(2) (A) all the Securities not previously canceled or delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption; or
(B) the Company shall deposit with the Trustee, in trust, cash in
U.S. dollars and/or U.S. Government Obligations which through the payment
of interest and principal in respect thereof, in accordance with their
terms, will provide (and without reinvestment and assuming no tax liability
will be imposed on such Trustee), not later than one Business Day before
the due date of any payment of money, an amount in cash, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay principal of or interest (including Additional Amounts, if any) on all
of the Securities (other than any Securities which shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for
which other Securities shall have been authenticated and delivered) not
previously canceled or delivered to the Trustee for cancellation, on the
dates such payments of principal or interest (including Additional Amounts,
if any) are due to such date of maturity or redemption, as the case may be;
and
(C) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel , each stating that all conditions
precedent in this Indenture relating to the satisfaction and discharge of
the Indenture have been complied with; and
(3) the Company shall pay or cause to be paid all other sums payable
hereunder by the Company;
then this Indenture shall cease to be of further effect (except as to:
(4) remaining rights of registration of transfer, substitution and
exchange and conversion of Securities;
36
(5) rights hereunder of Holders to receive payments of principal of
and interest (including Additional Amounts, if any) on, the Securities and
the other rights, duties and obligations of Holders, as beneficiaries
hereof with respect to the amounts, if any, so deposited with the Trustee;
and
(6) the rights, obligations and immunities of the Trustee hereunder);
and the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; provided, however, that the Company shall reimburse
the Trustee for all amounts due the Trustee under Section 5.8 and for any costs
or expenses thereafter reasonably and properly incurred by the Trustee and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities.
Section 3.2 Deposited Monies to be Held in Trust.
-------------------------------------
Subject to Section 3.3, all monies deposited with the Trustee pursuant to
Section 3.1 shall be held in trust and applied by it to the payment,
notwithstanding the provisions of Article 13, either directly or through any
Paying Agent (including the Company if acting as its own Paying Agent), to the
Holders of the particular Securities for the payment or redemption of which such
monies have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest (including Additional Amounts, if any). All
monies deposited with the Trustee pursuant to Section 3.1 (and held by it or any
Paying Agent) for the payment of Securities subsequently converted shall be
returned to the Company upon request of the Company.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charges imposed on or assessed against the U.S. Government Obligations
deposited pursuant to this Section 3.2 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
Section 3.3 Return of Unclaimed Monies.
---------------------------
The Trustee and the Paying Agent shall pay to the Company any money held by
them for the payment of principal or interest (including Additional Amounts, if
any) that remains unclaimed for 18 months after the date upon which such payment
shall have become due. After payment to the Company, Holders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person, and all liability
of the Trustee and such Paying Agent with respect to such money shall cease.
37
ARTICLE 4
DEFAULTS AND REMEDIES
Section 4.1 Events of Default.
------------------
An "Event of Default" with respect to the Securities occurs when any of the
following occurs (whatever the reason for such Event of Default and whether it
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(a) the Company defaults in the payment of the principal of any of the
Securities when it becomes due and payable at Maturity, upon redemption or
exercise of a Repurchase Right or otherwise; or
(b) the Company defaults in the payment of interest (including Additional
Amounts, if any) on any of the Securities when it becomes due and payable and
such default continues for a period of 30 days; or
(c) the Guarantor fails to perform under the Guarantees ;
(d) either the Company or the Guarantor fails to perform or observe any
other term, covenant or agreement contained in the Securities or this Indenture
and the default continues for a period of 60 days after written notice of such
failure, requiring the Company or the Guarantor, respectively, to remedy the
same, shall have been given to the Company or the Guarantor, respectively, by
the Trustee or to the Company or the Guarantor, respectively, and the Trustee by
the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities; or
(e) (i) the Company or the Guarantor fails to make by the end of the
applicable grace period, if any, any payment of principal or interest due in
respect of any Indebtedness for borrowed money, the aggregate outstanding
principal amount of which is an amount in excess of $25,000,000; or (ii) there
is an acceleration of any Indebtedness for borrowed money in an amount in excess
of $25,000,000 because of a default with respect to such Indebtedness without
such Indebtedness having been discharged or such non-payment or acceleration
having been cured, waived, rescinded or annulled, in the case of either (i) or
(ii) above, for a period of 30 days after written notice to the Company by the
Trustee or to the Company and the Trustee by Holders of at least 25% in
aggregate principal amount of the Outstanding Securities; or
(f) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or the Guarantor in an
involuntary case or proceeding under any applicable U.S. federal or state
bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or
order adjudging the Company or the Guarantor a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or the Guarantor under
any applicable U.S. federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or
38
other similar official of the Company or the Guarantor or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days; or
(g) the commencement by the Company or the Guarantor of a voluntary case or
proceeding under any applicable U.S. federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the Company to the entry
of a decree or order for relief in respect of the Company or the Guarantor in an
involuntary case or proceeding under any applicable U.S. federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company or the Guarantor, or the filing by the Company or the Guarantor of a
petition or answer or consent seeking reorganization or relief under any
applicable U.S. federal or state law, or the consent by the Company or the
Guarantor to the filing of such petition or to the appointment of or the taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or the Guarantor or of any substantial
part of its property, or the making by the Company or the Guarantor of an
assignment for the benefit of creditors, or the admission by the Company or the
Guarantor in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company or the Guarantor expressly
in furtherance of any such action.
Section 4.2 Acceleration of Maturity; Rescission and Annulment.
---------------------------------------------------
If an Event of Default with respect to Outstanding Securities (other than
an Event of Default specified in Section 4.1(f) or 4.1(g)) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Outstanding Securities, by written notice to the Company, may
declare due and payable 100% of the principal amount of all Outstanding
Securities plus any accrued and unpaid interest (including Additional Amounts,
if any) to the date of payment. Upon a declaration of acceleration, such
principal and accrued and unpaid interest (including Additional Amounts, if any)
to the date of payment shall be immediately due and payable.
If an Event of Default specified in Section 4.1(f) and 4.1(g) occurs, all
unpaid principal and accrued and unpaid interest (including Additional Amounts,
if any) on the Outstanding Securities shall become and be immediately due and
payable, without any declaration or other act on the part of the Trustee or any
Holder.
The Holders either (a) through notice to the Trustee of not less than a
majority in aggregate principal amount of the Outstanding Securities, or (b) by
the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities represented at such
meeting, may, on behalf of the Holders of all of the Securities, rescind and
annul an acceleration and its consequences if:
39
(1) all existing Events of Default, other than the nonpayment of
principal of or interest on the Securities which have become due solely
because of the acceleration, have been remedied, cured or waived, and
(2) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction;
provided, however, that in the event such declaration of acceleration has been
made based on the existence of an Event of Default under Section 4.1(e) and the
default with respect to Indebtedness for money borrowed which gave rise to such
Event of Default has been remedied, cured or waived, then, without any further
action by the Holders, such declaration of acceleration shall be rescinded
automatically and the consequences of such declaration shall be annulled. No
such rescission or annulment shall affect any subsequent Default or impair any
right consequent thereon.
Section 4.3 Other Remedies.
---------------
If an Event of Default with respect to Outstanding Securities occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on the Securities
or to enforce the performance of any provision of the Securities.
The Trustee may maintain a proceeding in which it may prosecute and enforce
all rights of action and claims under this Indenture or the Securities, even if
it does not possess any of the Securities or does not produce any of them in the
proceeding.
Section 4.4 Waiver of Past Defaults.
------------------------
The Holders, either (a) through the written consent of not less than a
majority in aggregate principal amount of the Outstanding Securities, or (b) by
the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities represented at such
meeting, may, on behalf of the Holders of all of the Securities, waive an
existing Default or Event of Default, except a Default or Event of Default:
(1) in the payment of the principal of or interest (including
Additional Amounts, if any) on any Security (provided, however, that
subject to Section 4.7, the Holders of a majority in aggregate principal
amount of the Outstanding Securities may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration); or
(2) in respect of a covenant or provision hereof which, under Section
7.2, cannot be modified or amended without the consent of the Holders of
each Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; provided,
40
however, that no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 4.5 Control by Majority.
--------------------
The Holders of a majority in aggregate principal amount of the Outstanding
Securities (or such lesser amount as shall have acted at a meeting pursuant to
the provisions of this Indenture) 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. However, the
Trustee may refuse to follow any direction that:
(1) conflicts with any law or with this Indenture;
(2) the Trustee determines may be unduly prejudicial to the rights of
the Holders not joining therein; or
(3) may expose the Trustee to personal liability.
The Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 4.6 Limitation on Suit.
-------------------
No Holder of any Security shall have any right to pursue any remedy with
respect to this Indenture or the Securities (including, instituting any
proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver or trustee) unless:
(1) such Holder has previously given written notice to the Trustee of
an Event of Default that is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities shall have made written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against any costs, expenses and liabilities incurred in
complying with such request;
(4) the Trustee has failed to comply with the request for 60 days
after its receipt of such notice, request and offer of indemnity; and
(5) during such 60-day period, no direction inconsistent with such
written request has been given to the Trustee by the Holders of a majority
in aggregate principal amount of the Outstanding Securities (or such amount
as shall have acted at a meeting pursuant to the provisions of this
Indenture);
provided, however, that no one or more of such Holders may use this Indenture to
prejudice the rights of another Holder or to obtain preference or priority over
another Holder.
41
Section 4.7 Unconditional Rights of Holders to Receive Payment and to
---------------------------------------------------------
Convert.
--------
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest (including Additional Amounts, if any)
on such Security on the Stated Maturity expressed in such Security (or, in the
case of redemption, on the Redemption Date, or in the case of the exercise of a
Repurchase Right, on the Repurchase Date) and to convert such Security in
accordance with Article 12, and to bring an action for the enforcement of any
such payment on or after such respective dates and such right to convert, and
such rights shall not be impaired or affected without the consent of such
Holder.
Section 4.8 Collection of Indebtedness and Suits for Enforcement by the
-----------------------------------------------------------
Trustee.
--------
The Company covenants that if:
(1) a Default or Event of Default is made in the payment of any
interest (including Additional Amounts, if any) on any Security when such
interest (including Additional Amounts, if any) becomes due and payable and
such Default or Event of Default continues for a period of 30 days; or
(2) a Default or Event of Default is made in the payment of the
principal of any Security at the Maturity thereof;
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable (as expressed
therein or as a result of any acceleration effected pursuant to Section 4.2) on
such Securities for principal and interest (including Additional Amounts, if
any) and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal and on any overdue interest
(including Additional Amounts, if any), calculated using the Interest Rate, and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company and collect the monies adjudged or decreed to be payable in
the manner provided by law out of the property of the Company, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
42
Section 4.9 Trustee May File Proofs of Claim.
---------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or the property of the Company or
its creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest (including
Additional Amounts, if any)) shall be entitled and empowered, by intervention in
such proceeding or otherwise:
(1) to file and prove a claim for the whole amount of principal and
interest (including Additional Amounts, if any) owing and unpaid in respect
of the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of Securities allowed in such judicial proceeding; and
(2) to collect and receive any monies or other property payable or
deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceedings is hereby authorized by
each Holder of Securities to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee under Section 5.8.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept, or adopt on behalf of any Holder of a
Security, any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder of a Security in any such
proceeding.
Section 4.10 Restoration of Rights and Remedies.
-----------------------------------
If the Trustee or any Holder of a Security has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
Securities shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
Section 4.11 Rights and Remedies Cumulative.
-------------------------------
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
2.14, no right or
43
remedy conferred in this Indenture upon or reserved to the Trustee or to the
Holders of Securities is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 4.12 Delay or Omission Not Waiver.
-----------------------------
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders of Securities may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders of
Securities, as the case may be.
Section 4.13 Application of Money Collected.
-------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest
(including Additional Amounts, if any), upon presentation of the Securities and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee;
SECOND: To the payment of the amounts then due and unpaid for principal of
and interest (including Additional Amounts, if any) on the Securities,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and interest
(including Additional Amounts, if any), respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
Section 4.14 Undertaking for Costs.
----------------------
All parties to this Indenture agree, and each Holder of any Security by
such Holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities, or to any suit instituted by any
Holder of any Security for the enforcement of the payment of the principal of or
interest (including Additional Amounts, if
44
any) on any Security on or after the Stated Maturity expressed in such Security
(or, in the case of redemption or exercise of a Repurchase Right, on or after
the Redemption Date) or for the enforcement of the right to convert any Security
in accordance with Article 12.
Section 4.15 Waiver of Stay or Extension Laws.
---------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim to
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 5
THE TRUSTEE
Section 5.1 Certain Duties and Responsibilities.
------------------------------------
(a) Except during the continuance of an Event of Default,
(1) The Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture or the TIA, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) In the absence of bad faith on its part, 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 Indenture; provided,
however, that 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 examine the certificates or opinions to determine whether
or not, on their face, they conform to the requirements of this Indenture
(but need not investigate or confirm the accuracy of any facts stated
therein).
(b) In case an Event of Default actually known to a Responsible Officer of
the Trustee has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
45
(1) This paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section 5.1;
(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; and
(3) 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 a direction
received by it of the Holders of a majority in principal amount of the
Outstanding Securities (or such lesser amount as shall have acted at a
meeting pursuant to the provisions of this Indenture) relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
(d) Whether or not herein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
5.1.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers. The
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability, cost or
expense (including, without limitation, reasonable fees of counsel).
(f) The Trustee shall not be obligated to pay interest on any money or
other assets received by it unless otherwise agreed in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company or the Guarantor, as the case may be,
personally or by agent or attorney at the sole cost of the Company and shall
incur no liability or additional liability of any kind by reason of such inquiry
or investigation.
(h) The Trustee shall not be deemed to have notice or actual knowledge of
any Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact a
Default is received by the Trustee pursuant to Section 13.2, and such notice
references the Securities and this Indenture.
(i) The rights, privileges, protections, immunities and benefits given to
the Trustee hereunder, including, without limitation, its right to be
indemnified, are extended to, and
46
shall be enforceable by, the Trustee in each of its capacities hereunder, and
each Paying Agent, authenticating agent, Conversion Agent or Registrar acting
hereunder.
(j) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Section 5.2 Certain Rights of Trustee.
--------------------------
Subject to the provisions of Section 5.1 and subject to Section 315(a)
through (d) of the TIA:
(1) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate or Opinion of Counsel.
(3) The Trustee may act through attorneys and agents and shall be
responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
(4) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith which it believed to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture,
unless the Trustee's conduct constitutes negligence.
(5) The Trustee may consult with counsel of its selection and the
advice of such counsel as to matters of law or legal interpretation shall
be full and complete authorization and protection in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(6) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
(7) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty unless so specified herein.
47
Section 5.3 Individual Rights of Trustee.
-----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or any Affiliate
of the Company with the same rights it would have if it were not Trustee.
However, in the event that the Trustee acquires any conflicting interest (as
such term is defined in Section 310(b) of the TIA), it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as trustee
(to the extent permitted under Section 310(b) of the TIA) or resign. Any agent
may do the same with like rights and duties. The Trustee is also subject to
Sections 5.11 and 5.12.
Section 5.4 Money Held in Trust.
--------------------
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
expressly agreed with the Company.
Section 5.5 Trustee's Disclaimer.
---------------------
The recitals contained herein and in the Securities (except for those in
the certificate 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, sufficiency or priority of
this Indenture or of the Securities. The Trustee shall not be accountable for
the use or application by the Company of Securities or the proceeds thereof.
Section 5.6 Notice of Defaults.
-------------------
Within 90 days after the occurrence of any Default or Event of Default
hereunder of which the Trustee has received written notice, the Trustee shall
give notice to Holders pursuant to Section 13.2, unless such Default or Event of
Default shall have been cured or waived; provided, however, that, except in the
case of a Default or Event of Default in the payment of the principal of or
interest (including Additional Amounts, if any), or in the payment of any
redemption or repurchase obligation on any Security, the Trustee shall be
protected in withholding such notice if and so long as Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders.
Section 5.7 Reports by Trustee to Holders.
------------------------------
The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required by Section 313 of the
TIA at the times and in the manner provided by the TIA.
A copy of each report at the time of its mailing to Holders shall be filed
with the SEC, if required, and each stock exchange, if any, on which the
Securities are listed. The Company shall promptly notify the Trustee if the
Securities become listed on any stock exchange or delisted therefrom.
48
Section 5.8 Compensation and Indemnification.
---------------------------------
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation as the Company and the
Trustee shall from time to time agree in writing (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust) and the Company covenants and agrees to pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred or
made by or on behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ), except to the extent that any such expense, disbursement or
advance is due to its negligence or bad faith. When the Trustee incurs expenses
or renders services in connection with an Event of Default specified in Section
4.1, the expenses (including the reasonable charges and expenses of its counsel)
and the compensation for the services are intended to constitute expenses of
administration under any bankruptcy law. The Company also covenants to indemnify
the Trustee and its officers, directors, employees and agents for, and to hold
such Persons harmless against, any loss, liability or expense incurred by them,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder or the performance of their duties hereunder,
including the costs and expenses of defending themselves against or
investigating any claim of liability in the premises, except to the extent that
any such loss, liability or expense was due to the negligence or willful
misconduct of such Persons. The obligations of the Company under this Section
5.8 to compensate and indemnify the Trustee and its officers, directors,
employees and agents and to pay or reimburse such Persons for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture or the
earlier resignation or removal of the Trustee. Such additional indebtedness
shall be a lien prior to that of the Securities upon all property and funds held
or collected by the Trustee as such, except funds held in trust for the benefit
of the Holders of particular Securities, and the Securities are hereby
subordinated to such senior claim. "Trustee" for purposes of this Section 5.8
shall include any predecessor Trustee, but the negligence or willful misconduct
of any Trustee shall not affect the indemnification of any other Trustee.
Section 5.9 Replacement of Trustee.
-----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 5.9.
The Trustee may resign and be discharged from the trust hereby created by
so notifying the Company in writing. The Holders of at least a majority in
aggregate principal amount of Outstanding Securities may remove the Trustee by
so notifying the Trustee and the Company in writing. The Company must remove the
Trustee if:
(i) the Trustee fails to comply with Section 5.10 or Section 310 of the
TIA;
(ii) the Trustee becomes incapable of acting;
49
(iii) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy
Law; or
(iv) a Custodian or public officer takes charge of the Trustee or its
property.
If the Trustee resigns or is removed or if a vacancy exists in the office
of the Trustee for any reason, the Company shall promptly appoint a successor
Trustee. The Trustee shall be entitled to payment of its fees and reimbursement
of its expenses while acting as Trustee. Within one year after the successor
Trustee takes office, the Holders of at least a majority in aggregate principal
amount of Outstanding Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
Any Holder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee if the Trustee fails
to comply with Section 5.10.
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 or removal, the resigning or removed Trustee, as the case may be,
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
Company shall issue a notice of the successor Trustee's succession to the
Holders. Upon payment of its charges, the retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject
nevertheless to its lien, if any, provided for in Section 5.8. Notwithstanding
replacement of the Trustee pursuant to this Section 5.9, the Company's
obligations under Section 5.8 shall continue for the benefit of the retiring
Trustee with respect to expenses, losses and liabilities incurred by it prior to
such replacement.
Section 5.10 Successor Trustee by Merger, Etc.
---------------------------------
Subject to Section 5.11, if the Trustee consolidates with, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another Person, corporation or national banking association, the
successor entity without any further act shall be the successor Trustee as to
the Securities.
Section 5.11 Corporate Trustee Required; Eligibility.
----------------------------------------
The Trustee shall at all times satisfy the requirements of Section
310(a)(1), (2) and (5) of the TIA. The Trustee shall at all times have (or, in
the case of a corporation included in a bank holding company system, the related
bank holding company shall at all times have), a combined capital and surplus of
at least $25 million as set forth in its (or its related bank holding company's)
most recent published annual report of condition. The Trustee is subject to
Section 310(b) of the TIA.
50
Section 5.12 Collection of Claims Against the Company.
-----------------------------------------
The Trustee is subject to Section 311(a) of the TIA, excluding any creditor
relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or
been removed shall be subject to Section 311(a) of the TIA to the extent
indicated therein.
ARTICLE 6
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 6.1 Company or Guarantor May Consolidate, Etc., Only on Certain
-----------------------------------------------------------
Terms.
------
Neither the Company nor the Guarantor shall consolidate with or merge into
any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and neither the Company nor the
Guarantor shall permit any Person to consolidate with or merge into the Company
or the Guarantor, respectively, or convey, transfer or lease its properties and
assets substantially as an entirety to the Company or the Guarantor,
respectively, unless:
(1) in the event that the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation,
limited liability company, partnership or trust organized and validly
existing under the laws of the Netherlands Antilles;
(2) in the event that the Company or the Guarantor shall consolidate
with or merge into another Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, and the
entity surviving such transaction or transferee entity is not the Company
or the Guarantor, as the case may be, then such surviving or transferee
entity shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form reasonably satisfactory to
the Trustee, the due and punctual payment of the principal of and interest
(including Additional Amounts, if any), on all the Securities and the
performance of every covenant of this Indenture on the part of the Company
and the Guarantor to be performed or observed and shall have provided for
conversion rights in accordance with Section 12.13;
(3) at the time of consummation of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(4) the Company or the Guarantor, as the case may be, shall have
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer
or lease and, if a supplemental indenture is required in connection with
such transaction, such
51
supplemental indenture, comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
Section 6.2 Successor Corporation Substituted.
----------------------------------
Upon any consolidation or merger by the Company or the Guarantor with or
into any other corporation or any conveyance, transfer or lease of the
properties and assets of the Company and the Guarantor substantially as an
entirety to any Person, in accordance with Section 6.1, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or the
Guarantor under this Indenture with the same effect as if such successor
corporation had been named as the Company or the Guarantor herein, and
thereafter, except in the case of a lease to another Person, the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
Section 6.3 Guarantor to be the Sole Equityholder of the Company.
-----------------------------------------------------
So long as any Securities are outstanding, the Guarantor or its successor
will directly or indirectly own all of the outstanding capital stock of the
Company.
ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 7.1 Without Consent of Holders of Securities.
-----------------------------------------
Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, the Guarantor, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may amend this
Indenture and the Securities to:
(a) add to the covenants of the Company or the Guarantor for the benefit of
the Holders of Securities;
(b) surrender any right or power herein conferred upon the Company or the
Guarantor;
(c) make provision with respect to the conversion rights of Holders of
Securities pursuant to Section 12.13;
(d) provide for the assumption of the Company's obligations to the Holders
of Securities in the case of a merger, consolidation, conveyance, transfer or
lease pursuant to Article 6;
(e) reduce the Conversion Price; provided, however, that such reduction in
the Conversion Price shall not adversely affect the interest of the Holders of
Securities (after taking into account tax and other consequences of such
reduction);
52
(f) comply with the requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA;
(g) make any changes or modifications to this Indenture necessary in
connection with the registration of any Securities under the Securities Act as
contemplated in the Registration Rights Agreement; provided, however, that such
action pursuant to this clause (g) does not, in the good faith opinion of the
Board of Directors of the Company (as evidenced by a Board Resolution) and the
Trustee, adversely affect the interests of the Holders of Securities in any
material respect;
(h) cure any ambiguity, to correct or supplement any provision herein which
may be inconsistent with any other provision herein or which is otherwise
defective, or to make any other provisions with respect to matters or questions
arising under this Indenture which the Company may deem necessary or desirable
and which shall not be inconsistent with the provisions of this Indenture;
provided, however, that such action pursuant to this clause (h) does not, in the
good faith opinion of the Board of Directors of the Company (as evidenced by a
Board Resolution), adversely affect the interests of the Holders of Securities
in any material respect;
(i) add or modify any other provisions with respect to matters or questions
arising under this Indenture which the Company may deem necessary or desirable
and which shall not be inconsistent with the provisions of this Indenture;
provided, however, that such action pursuant to this clause (i) does not, in the
good faith opinion of the Board of Directors of the Company (as evidenced by a
Board Resolution), adversely affect the interests of the Holders of Securities
in any material respect; or
(j) provide for the issuance of Add On Securities as permitted by Section
2.21, which will have terms substantially identical to the other Outstanding
Securities except as specified in Section 2.21, and which will be treated,
together with any other Outstanding Securities, as a single issue of securities.
Section 7.2 With Consent of Holders of Securities.
--------------------------------------
Except as provided below in this Section 7.2, this Indenture or the
Securities may be amended or supplemented, and noncompliance in any particular
instance with any provision of this Indenture or the Securities may be waived,
in each case (i) with the written consent of the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities or (ii) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of a majority in aggregate
principal amount of the Outstanding Securities represented at such meeting.
Without the written consent or the affirmative vote of each Holder of
Securities affected thereby, an amendment or waiver under this Section 7.2 may
not:
(a) change the Stated Maturity of the principal of, or any installment of
interest (including Additional Amounts, if any) on, any Security;
(b) reduce the principal amount on any Security;
53
(c) reduce the Interest Rate or interest (including Additional Amounts, if
any) on any Security;
(d) change the currency of payment of principal of or interest (including
Additional Amounts, if any) on any Security;
(e) impair the right of any Holder to institute suit for the enforcement of
any payment in or with respect to any Security;
(f) modify the obligation of the Company to maintain an office or agency in
The City of New York pursuant to Section 9.4;
(g) except as permitted by Section 12.13, adversely affect the Repurchase
Right or the right to convert any Security as provided in Article 12;
(h) modify the Guarantor's obligation to own, directly or indirectly, all
of the outstanding membership interest in the Company;
(i) modify the provisions in Article 10 relating to the redemption of the
Securities in a manner adverse to the Holders of Securities;
(j) modify the Guarantor's obligation under the Guarantees;
(k) modify any of the provisions of this Section, Section 4.4, Section
13.11 or Section 13.12, except to increase any percentage contained herein or
therein or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Security affected thereby; or
(l) reduce the requirements of Section 8.4 for quorum or voting, or reduce
the percentage in aggregate principal amount of the Outstanding Securities the
consent of whose Holders is required for any such supplemental indenture or the
consent of whose Holders is required for any waiver provided for in this
Indenture.
It shall not be necessary for any Act of Holders of Securities under this
Section 7.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 7.3 Compliance with Trust Indenture Act.
------------------------------------
Every amendment to this Indenture or the Securities shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
Section 7.4 Revocation of Consents and Effect of Consents or Votes.
-------------------------------------------------------
Until an amendment, supplement or waiver becomes effective, a written
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security; provided, however, that unless a record date
54
shall have been established, any such Holder or subsequent Holder may revoke the
consent as to its Security or portion of a Security if the Trustee receives
written notice of revocation before the date the amendment, supplement or waiver
becomes effective.
An amendment, supplement or waiver becomes effective on receipt by the
Trustee of written consents from or affirmative votes by, as the case may be,
the Holders of the requisite percentage of aggregate principal amount of the
Outstanding Securities, and thereafter shall bind every Holder of Securities;
provided, however, if the amendment, supplement or waiver makes a change
described in any of the clauses (a) through (l) of Section 7.2, the amendment,
supplement or waiver shall bind only each Holder of a Security which has
consented to it or voted for it, as the case may be, and every subsequent Holder
of a Security or portion of a Security that evidences the same indebtedness as
the Security of the consenting or affirmatively voting Holder, as the case may
be.
Section 7.5 Notation on or Exchange of Securities.
--------------------------------------
If an amendment, supplement or waiver changes the terms of a Security:
(a) the Trustee may require the Holder of a Security to deliver such
Securities to the Trustee, the Trustee may place an appropriate notation on the
Security about the changed terms and return it to the Holder and the Trustee may
place an appropriate notation on any Security thereafter authenticated; or
(b) if the Company so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 7.6 Trustee to Sign Amendment, Etc.
-------------------------------
The Trustee shall sign any amendment authorized pursuant to this Article 7
if the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If the amendment does adversely affect the rights,
duties, liabilities or immunities of the Trustee, the Trustee may but need not
sign it. In signing or refusing to sign such amendment, the Trustee shall be
entitled to receive and shall be fully protected in relying upon an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such amendment
is authorized or permitted by this Indenture.
ARTICLE 8
MEETING OF HOLDERS OF SECURITIES
Section 8.1 Purposes for Which Meetings May Be Called.
------------------------------------------
A meeting of Holders of Securities may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction,
55
notice, consent, waiver or other action provided by this Indenture to be made,
given or taken by Holders of Securities.
Section 8.2 Call Notice and Place of Meetings.
----------------------------------
(a) The Trustee may at any time call a meeting of Holders of Securities for
any purpose specified in Section 8.1, to be held at such time and at such place
in The City of New York. Notice of every meeting of Holders of Securities,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 13.2, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in principal amount of the Outstanding Securities shall
have requested the Trustee to call a meeting of the Holders of Securities for
any purpose specified in Section 8.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the Holders
of Securities in the amount specified, as the case may be, may determine the
time and the place in The City of New York for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in paragraph (a)
of this Section 8.2.
Section 8.3 Persons Entitled to Vote at Meetings.
-------------------------------------
To be entitled to vote at any meeting of Holders of Securities, a Person
shall be (a) a Holder of one or more Outstanding Securities, or (b) a Person
appointed by an instrument in writing as proxy for a Holder or Holders of one or
more Outstanding Securities by such Holder or Holders. The only Persons who
shall be entitled to be present or to speak at any meeting of Holders shall be
the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 8.4 Quorum; Action.
---------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities, be dissolved. In any other
case, the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 8.2(a), except that such notice need be given only
once and not less than five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state
56
expressly the percentage of the principal amount of the Outstanding Securities
which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned for a
lack of a quorum, the Persons entitled to vote 25% in principal amount of the
Outstanding Securities at the time shall constitute a quorum for the taking of
any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a quorum
is present as aforesaid, any resolution and all matters (except as limited by
the proviso to Section 7.2) shall be effectively passed and decided if passed or
decided by the Persons entitled to vote not less than a majority in principal
amount of Outstanding Securities represented and voting at such meeting.
Any resolution passed or decisions taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities, whether or not present or represented at the meeting.
Section 8.5 Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings.
---------
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved in
the manner specified in Section 13.4 and the appointment of any proxy shall be
proved in the manner specified in Section 13.4. Such regulations may provide
that written instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section 13.4 or other
proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman (which may be the Trustee) of the meeting, unless the meeting shall
have been called by the Company or by Holders of Securities as provided in
Section 8.2(b), in which case the Company or the Holders of Securities calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in principal amount
of the Outstanding Securities represented at the meeting.
(c) At any meeting, each Holder of a Security or proxy shall be entitled to
one vote for each $1,000 principal amount of Securities held or represented by
him; provided, however, that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not Outstanding and ruled by the chairman
of the meeting to be not Outstanding. The chairman of the meeting shall have no
right to vote, except as a Holder of a Security or proxy.
57
(d) Any meeting of Holders of Securities duly called pursuant to Section
8.2 at which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in principal amount of the Outstanding Securities
represented at the meeting, and the meeting may be held as so adjourned without
further notice.
Section 8.6 Counting Votes and Recording Action of Meetings.
------------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amounts and serial numbers of the Outstanding Securities held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Securities shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 8.2 and, if
applicable, Section 8.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE 9
COVENANTS
Section 9.1 Payment of Principal and Interest.
----------------------------------
The Company will duly and punctually pay the principal of and interest
(including Additional Amounts, if any) in respect of the Securities in
accordance with the terms of the Securities and this Indenture. The Company will
deposit or cause to be deposited with the Trustee as directed by the Trustee, no
later than the day of the Stated Maturity of any Security or installment of
interest (including Additional Amounts, if any), all payments so due.
Section 9.2 Restrictions on Certain Payments.
---------------------------------
The Company shall not pay dividends, make distributions, incur Indebtedness
(other than the Securities and any Add On Securities) or repurchase its or the
Guarantor's securities (other than the Securities and any Add On Securities).
Section 9.3 Payment of Additional Tax Amounts.
----------------------------------
All payments of interest and principal by the Company under the Securities
and by the Guarantor under the Guarantees shall be made without withholding or
deduction for, or on account of, any present or future taxes, duties,
assessments or governmental charges of whatever nature (but, except as provided
in this Indenture, other than any estate, inheritance, gift, sales,
58
transfer or personal property taxes imposed with respect to the Securities or
the Guarantees) imposed or levied by or on behalf of the Netherlands Antilles or
the State of Israel or any political sub-division thereof or by any authority
therein having power to tax unless such withholding or deduction is required by
law. In that event, the Company or the Guarantor, as applicable, will pay such
additional amounts as may be necessary in order that the net amounts received by
a Holder after such withholding or deduction shall equal the amount of interest
and principal which would have been receivable in respect of the Securities in
the absence of such withholding or deduction ("Additional Tax Amounts"), except
that no such Additional Tax Amounts shall be payable:
(a) to or on behalf of a Holder that is:
(1) able to avoid such withholding or deduction by making a
declaration of non-residence or other claim for exemption to the relevant
tax authority or
(2) is liable for such taxes, duties, assessments or governmental
charges in respect of the debentures by reason of its having some
connection with the taxing jurisdiction other than merely by the holding of
the Securities; or
(b) that any such taxes, duties, assessments or governmental charges would
not have been imposed but for the presentation of such Securities or Guarantees,
where presentation is required, for payment on a date more than 30 days after
the date on which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever is later, except to the extent
that the Holder thereof would have been entitled to Additional Tax Amounts had
the Securities or Guarantees been presented for payment on any date during such
30-day period.
Section 9.4 Maintenance of Offices or Agencies.
-----------------------------------
The Company hereby appoints the Trustee's Corporate Trust Office as its
office in The City of New York, where Securities may be:
(i) presented or surrendered for payment;
(ii) surrendered for registration of transfer or exchange;
(iii) surrendered for conversion;
and where notices and demands to or upon the Company or the Guarantor in respect
of the Securities or the Guarantees and this Indenture may be served.
The Company may at any time and from time to time vary or terminate the
appointment of any such office or appoint any additional offices for any or all
of such purposes; provided, however, that until all of the Securities have been
delivered to the Trustee for cancellation, or monies sufficient to pay the
principal of and interest (including Additional Amounts, if any) on the
Securities have been made available for payment and either paid or returned to
the Company pursuant to the provisions of Section 9.4, the Company will maintain
in
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, an office or agency where Securities may be presented
or surrendered for payment, where Securities may be surrendered for registration
of transfer or exchange, where Securities may be surrendered for conversion and
where notices and demands to or upon the Company and the Guarantor in respect of
the Securities or the Guarantees and this Indenture may be served. The Company
will give prompt written notice to the Trustee, and notice to the Holders in
accordance with Section 13.2, of the appointment or termination of any such
agents and of the location and any change in the location of any such office or
agency.
If at any time the Company shall fail to maintain any such required office
or agency in The City of New York, or shall fail to furnish the Trustee with the
address thereof, presentations and surrenders may be made at, and notices and
demands may be served on, the Corporate Trust Office of the Trustee.
Section 9.5 Corporate Existence.
--------------------
Subject to Article 6, each of the Guarantor and the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and franchises;
provided, however, that the Company and the Guarantor shall not be required to
preserve any such right or franchise if the Company and the Guarantor determines
that the preservation thereof is no longer desirable in the conduct of the
business of the Company or the Guarantor and that the loss thereof is not
disadvantageous in any material respect to the Holders.
Section 9.6 [Intentionally Omitted].
------------------------
Section 9.7 Reports.
--------
(a) The Company or the Guarantor, as the case may be, shall deliver to the
Trustee within 15 days after it files them with the SEC 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 SEC may by rules and regulations
prescribe) which the Company or the Guarantor is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act; provided, however, the
Company and the Guarantor shall not be required to deliver to the Trustee any
materials for which the Company or the Guarantor has sought and received
confidential treatment by the SEC. The Company and the Guarantor also shall
comply with the other provisions of Section 314(a) of the TIA.
(b) Delivery of such annual reports, information and documents and other
reports to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
(c) If at any time each of the Company and the Guarantor is not subject to
Section 13 or 15(d) of the Exchange Act, upon the request of a Holder of a
Security, the Company or the Guarantor, as the case may be, will promptly
furnish or cause to be furnished to such Holder or to a prospective purchaser of
such Security designated by such Holder, as the
60
case may be, the information, if any, required to be delivered by it pursuant to
Rule 144A(d)(4) under the Securities Act to permit compliance with Rule 144A in
connection with the resale of such Security; provided, however, that the Company
and the Guarantor shall not be required to furnish such information in
connection with any request made on or after the date which is two years from
the later of the date such security was last acquired from the Company or an
"affiliate" (as defined under Rule 144 under the Securities Act) of the Company.
Section 9.8 Compliance Certificate.
-----------------------
The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company (which as of the date hereof is December 31), an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company, they would normally have
knowledge of any failure by the Company to comply with all conditions, or any
Default by the Company with respect to any covenants, under this Indenture, and
further stating whether or not they have knowledge of any such failure or
Default and, if so, specifying each such failure or Default and the nature
thereof. In the event an Officer of the Company comes to have actual knowledge
of a Default, regardless of the date, the Company shall deliver an Officers'
Certificate to the Trustee specifying such Default and the nature and status
thereof.
Section 9.9 Resale of Certain Securities.
-----------------------------
During the period of two years after the last date of original issuance of
any Securities, neither the Guarantor nor the Company shall, nor shall either
permit any of its "affiliates" (as defined under Rule 144 under the Securities
Act) to, resell any Securities, or ADRs issuable upon conversion of the
Securities, that are acquired by any of them except pursuant to an effective
registration statement under the Securities Act. The Trustee shall have no
responsibility or liability in respect of the Company's performance of its
agreement in the preceding sentence.
ARTICLE 10
REDEMPTION OF SECURITIES
Section 10.1 Optional Redemption.
--------------------
At any time on or after November 18, 2007, except for Securities that it is
required to repurchase pursuant to Section 11.1(a), the Company may, at its
option, redeem the Securities in whole at any time or in part from time to time,
on any date prior to maturity, upon notice as set forth in Section 10.4, at the
Redemption Price plus any interest (including Additional Amounts, if any)
accrued and unpaid to, but excluding, the Redemption Date.
Section 10.2 Notice to Trustee.
------------------
If the Company elects to redeem Securities pursuant to the provisions of
Section 10.1, it shall notify the Trustee at least 30 days prior to the intended
Redemption Date of (i) such intended Redemption Date, (ii) the principal amount
of Securities to be redeemed and (iii) the CUSIP numbers of the Securities to be
redeemed.
61
Section 10.3 Selection of Securities to Be Redeemed.
---------------------------------------
If fewer than all the Securities are to be redeemed, the Trustee shall
select the particular Securities to be redeemed from the Outstanding Securities
by a method that complies with the requirements of any exchange on which the
Securities are listed, or, if the Securities are not listed on an exchange, on a
pro rata basis or by lot or in accordance with any other method the Trustee
considers fair and appropriate. Securities and portions thereof that the Trustee
selects shall be in amounts equal to the minimum authorized denominations for
Securities to be redeemed or any integral multiple thereof.
If any Security selected for partial redemption is converted or elected to
be repurchased in part before termination of the conversion right or repurchase
right with respect to the portion of the Security so selected, the converted or
repurchased portion of such Security shall be deemed to be the portion selected
for redemption; provided, however, that the Holder of such Security so converted
and deemed redeemed shall not be entitled to any additional interest payment as
a result of such deemed redemption than such Holder would have otherwise been
entitled to receive upon conversion of such Security. Securities which have been
converted during a selection of Securities to be redeemed may be treated by the
Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and the Registrar in writing
of the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
Section 10.4 Notice of Redemption.
---------------------
Notice of redemption shall be given in the manner provided in Section 13.2
to the Holders of Securities to be redeemed. Such notice shall be given not less
than 20 nor more than 60 days prior to the intended Redemption Date.
All notices of redemption shall state:
(1) such intended Redemption Date;
(2) the Redemption Price and interest (including Additional Amounts,
if any) accrued and unpaid to, but excluding, the Redemption Date, if any;
(3) if fewer than all the Outstanding Securities are to be redeemed,
the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities which will be Outstanding after
such partial redemption;
62
(4) that on the Redemption Date the Redemption Price and interest
accrued and unpaid to, but excluding, the Redemption Date, if any, will
become due and payable upon each such Security to be redeemed, and that
interest (including Additional Amounts, if any) thereon shall cease to
accrue on and after such date;
(5) the Conversion Price, the date on which the right to convert the
principal of the Securities to be redeemed will terminate and the places
where such Securities may be surrendered for conversion;
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, accrued and unpaid interest, if any;
and
(7) the CUSIP number of the Securities.
The notice given shall specify the last date on which exchanges or
transfers of Securities may be made pursuant to Section 2.9, and shall specify
the serial numbers of Securities and the portions thereof called for redemption.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request
delivered at least 15 days prior to the date of the mailing of such Notice
(unless a shorter period shall be acceptable to the Trustee), by the Trustee in
the name of and at the expense of the Company.
Section 10.5 Effect of Notice of Redemption.
-------------------------------
Notice of redemption having been given as provided in Section 10.4, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued and unpaid interest) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with such notice,
such Security shall be paid by the Company at the Redemption Price; provided,
however, the installments of interest on Securities whose Stated Maturity is
prior to or on the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the
relevant Record Date according to their terms and the provisions of Section 2.9.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the Interest Rate.
Section 10.6 Deposit of Redemption Price.
----------------------------
Prior to 10:00 a.m., New York City time, on any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent an amount of money
sufficient to pay the Redemption Price, accrued and unpaid interest (including
Additional Amounts, if any), in respect of all the Securities to be redeemed on
that Redemption Date, other than any Securities called for
63
redemption on that date which have been converted prior to the date of such
deposit, and accrued and unpaid interest, if any, on such Securities.
If any Security called for redemption is converted, any money deposited
with the Trustee or with a Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in
Section 2.1(e)) be paid to the Company upon request by the Company or, if then
held by the Company, shall be discharged from such trust.
Section 10.7 Securities Redeemed in Part.
----------------------------
Any Security which is to be redeemed only in part shall be surrendered at
an office or agency of the Company designated for that purpose pursuant to
Section 9.4 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or the Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of any authorized denomination as requested by such
Holder in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE 11
REPURCHASE AT THE OPTION OF A HOLDER
Section 11.1 Repurchase Rights.
------------------
(a) On November 18, 2007 (the "First Optional Repurchase Date"), November
15, 2012 and November 15, 2017 (each, an "Optional Repurchase Date") each Holder
shall have the right (the "Optional Repurchase Right" and, the Optional
Repurchase Right exercisable on the First Optional Repurchase Date, the "First
Optional Repurchase Right"), at the Holder's option, but subject to the
provisions of Section 11.2, to require the Company to repurchase, and upon the
exercise of such right the Company shall repurchase, all of such Holder's
Securities, or any portion of the principal amount thereof that is equal to any
integral multiple of $1,000 (provided that no single Security may be repurchased
in part unless the portion of the principal amount of such Security to be
outstanding after such repurchase is equal to an integral multiple of $1,000),
at a repurchase price equal to 100% of the principal amount of the Securities to
be repurchased (the "Optional Repurchase Price"), plus interest (including
Additional Amounts, if any) accrued and unpaid to, but excluding, the Optional
Repurchase Date; provided, however, that installments of interest on Securities
whose Stated Maturity is prior to or on an Optional Repurchase Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Date according to their
terms and the provisions of Section 2.1.
(b) In the event that a Change in Control or a Termination of Trading shall
occur, each Holder shall have the right (the "Fundamental Change Repurchase
Right" and, together with the Optional Repurchase Right, each a "Repurchase
Right"), at the Holder's
64
option, but subject to the provisions of Section 11.2, to require the Company to
repurchase, and upon the exercise of such right the Company shall repurchase,
all of such Holder's Securities not theretofore called for redemption, or any
portion of the principal amount thereof that is equal to any integral multiple
of $1,000 (provided that no single Security may be repurchased in part unless
the portion of the principal amount of such Security to be Outstanding after
such repurchase is equal to an integral multiple of $1,000), on the date (the
"Fundamental Change Repurchase Date" and together with the Optional Repurchase
Dates, each a "Repurchase Date") that is 45 days after the date of the Company
Notice given pursuant to Section 11.3 in connection with such Change of Control
or Termination of Trading at the 100% of the principal amount of the Securities
to be repurchased (the "Fundamental Change Repurchase Price" and together with
the "Optional Repurchase Price", each a "Repurchase Price"), plus interest
(including Additional Amounts, if any) accrued and unpaid to, but excluding, the
Repurchase Date; provided, however, that installments of interest on Securities
whose Stated Maturity is prior to or on the Repurchase Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such on the relevant Record Date according to their terms and the
provisions of Section 2.1.
(c) Subject to the fulfillment by the Company of the conditions set forth
in Section 11.2, upon exercise by a Holder of its First Optional Repurchase
Right or a Fundamental Change Repurchase Right, the Company may elect to pay
some or all of the Repurchase Price by delivering a number of ADRs equal to (i)
such portion of the Repurchase Price it elects to pay using ADRs divided by (ii)
97% of the average of the Trading Prices per ADR for the five consecutive
Trading Days immediately preceding and including the third Trading Day prior to
the applicable Repurchase Date.
Section 11.2 Conditions to the Company's Election to Pay the Repurchase
----------------------------------------------------------
Price in ADRs.
--------------
Upon exercise by a Holder of its First Optional Repurchase Right or a
Fundamental Change Repurchase Right, the Company may, at its option, pay some or
all of the Repurchase Price payable to Holders pursuant to Section 11.1 upon
redemption of the Securities, in ADRs, if the following conditions are
satisfied:
(a) The ADRs to be so issued:
(1) shall not require registration under any federal securities law
before such shares may be freely transferable without being subject to any
transfer restrictions under the Securities Act upon repurchase or
redemption, as the case may be, or if such registration is required, such
registration shall be completed and shall become effective prior to the
applicable Repurchase Date; and
(2) shall not require registration with, or approval of, any
governmental authority under any state law or any other federal law before
the ADRs may be validly issued or delivered upon repurchase or if such
registration is required or such approval must be obtained, such
registration shall be completed or such approval shall be obtained prior to
the applicable Repurchase Date.
65
(b) All ADRs which may be issued upon repurchase of Securities will be
issued out of the Guarantor's authorized but unissued Ordinary Shares and
deposited by the Guarantor with the ADR Depositary in accordance with the
Deposit Agreement and will, upon such deposit, be duly and validly issued and
fully paid and nonassessable and free of any preemptive or similar rights.
(c) If any of the conditions set forth in clauses (a) through (c) of this
Section 11.2 are not satisfied in accordance with the terms thereof, the
Repurchase Price, as applicable, shall be paid by the Company only in cash.
Section 11.3 Notices; Method of Exercising Repurchase Right, Etc.
----------------------------------------------------
(a) In the case of a Change in Control or a Termination of Trading, unless
the Company shall have theretofore called for redemption all of the Outstanding
Securities, prior to or on the 30th day after the occurrence of a Change in
Control or a Termination of Trading, the Company, or, at the written request and
expense of the Company prior to or on the 30th day after such occurrence, the
Trustee, shall give to all Holders of Securities notice, in the manner provided
in Section 13.2, of the occurrence of the Change of Control or a Termination of
Trading and of the Repurchase Right set forth herein arising as a result thereof
(the "Fundamental Change Company Notice"). In the case of an Optional Repurchase
Right, 20 Business Days prior to an Optional Repurchase Date the Company, or, at
the written request and expense of the Company fifteen days prior to such date,
the Trustee, shall give to all Holders of Securities a notice, in the manner
provided in Section 13.2, of the Optional Repurchase Right (the "Optional
Repurchase Right Company Notice" and, together with the Fundamental Change
Company Notice, each a "Company Notice"). The Company shall also deliver a copy
of such Company Notice of a Repurchase Right to the Trustee. Each Company Notice
of a Repurchase Right shall state:
(1) the applicable Repurchase Date;
(2) the date by which the Fundamental Change Repurchase Right or the
Optional Repurchase Right must be exercised;
(3) the Repurchase Price and accrued and unpaid interest (including
Additional Amounts, if any), if any;
(4) whether the Repurchase Price shall be paid by the Company in cash
or by delivery of ADRs, or a combination thereof, specifying the percentage
of each;
(5) if the Repurchase Price will be paid in ADRs, the method for
calculating the average Trading Price of the ADRs;
(6) a description of the procedure which a Holder must follow to
exercise its Repurchase Right, and the place or places where such
Securities, are to be surrendered for payment of the Repurchase Price and
accrued and unpaid interest, if any;
66
(7) that on the applicable Repurchase Date the Repurchase Price and
accrued and unpaid interest, if any, will become due and payable in cash
upon each such Security designated by the Holder to be repurchased, and
that interest thereon shall cease to accrue on and after said date;
(8) the Conversion Rate then in effect, the date on which the right to
convert the principal amount of the Securities to be repurchased will
terminate and the place where such Securities may be surrendered for
conversion, and
(9) the place or places where such Securities, together with the
Option to Elect Repayment certificate included in Exhibit A annexed hereto
are to be delivered for payment of the Repurchase Price and accrued and
unpaid interest, if any.
No failure of the Company to give the foregoing notices or defect therein
shall limit any Holder's right to exercise a Repurchase Right or affect the
validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article 11
are inconsistent with applicable law, such law shall govern.
(b) To exercise its Optional Repurchase Right or its Fundamental Change
Repurchase Right, as the case may be, a Holder shall deliver to the Trustee on
or prior to the close of business two Business Days prior to the applicable
Optional Repurchase Date in the case of an Optional Repurchase Right, or prior
to or on the 30th day after the date of the Company Notice in the case of a
Change in Control or a Termination of Trading:
(1) written notice of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal amount of the
Securities to be repurchased (and, if any Security is to be repurchased in
part, the serial number thereof, the portion of the principal amount
thereof to be repurchased) and a statement that an election to exercise the
applicable Repurchase Right is being made thereby, and, in the event that
the Repurchase Price shall be paid in whole or in part in ADRs, the name or
names (with addresses) in which the certificate or certificates for the
ADRs shall be issued;
(2) the Securities with respect to which the Repurchase Right is being
exercised; and
(3) in the event the Company elects to pay the Repurchase Price to be
paid as of such Repurchase Date, in whole or in part, in ADRs but such
portion of the Repurchase Price shall ultimately be payable to such Holder
entirely in cash because any of the conditions to payment of the Repurchase
Price in ADRs is not satisfied prior to the close of business on such
Repurchase Date, as set forth in Section 11.2, whether such Holder elects
(i) to withdraw such Repurchase Notice as to some or all of the Securities
to which such Repurchase Notice relates (stating the Principal Amount at
Maturity and certificate numbers of the Securities
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as to which such withdrawal shall relate), or (ii) to receive cash in
respect of the entire Repurchase Price for all Securities (or portions
thereof) to which such Repurchase Notice relates.
Such written notice shall be irrevocable, except that the right of the Holder to
convert the Securities with respect to which the Repurchase Right is being
exercised shall continue until the close of business on the Business Day
immediately preceding the Repurchase Date.
(c) In the event a Repurchase Right shall be exercised in accordance with
the terms hereof, the Company shall pay or cause to be paid to the Trustee the
Repurchase Price in cash or ADRs, as provided above, for payment to the Holder
on the Repurchase Date or, if ADRs are to be paid, as promptly after the
Repurchase Date as practicable, together with accrued and unpaid interest to,
but excluding, the Repurchase Date payable in cash with respect to the
Securities as to which the Repurchase Right has been exercised; provided,
however, that installments of interest that mature prior to or on the Repurchase
Date shall be payable in cash to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal amount of such Security (or
portion thereof, as the case may be) shall, until paid, bear interest to the
extent permitted by applicable law from the Repurchase Date at the Interest
Rate, and each Security shall remain convertible into ADRs until the principal
of such Security (or portion thereof, as the case may be) shall have been paid
or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such Security
without service charge, a new Security or Securities, containing identical terms
and conditions, each in an authorized denomination in aggregate principal amount
equal to and in exchange for the unrepurchased portion of the principal of the
Security so surrendered.
(f) Any issuance of ADRs in respect of the Repurchase Price shall be deemed
to have been effected immediately prior to the close of business on the
Repurchase Date and the Person or Persons in whose name or names any certificate
or certificates representing the ADRs shall be issuable upon such repurchase
shall be deemed to have become on the Repurchase Date the holder or holders of
record of the ADRs represented thereby; provided, however, that any surrender
for repurchase on a date when the stock transfer books of the Guarantor shall be
closed shall constitute the Person or Persons in whose name or names the ADRs
are to be issued as the holder or holders of record of the shares represented
thereby for all purposes at the opening of business on the next succeeding day
on which such stock transfer books are open. No payment or adjustment shall be
made for dividends or distributions on any ADRs issued upon repurchase of any
Security declared prior to the Repurchase Date.
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(g) No fractions of shares of ADRs shall be issued upon repurchase of any
Security or Securities. If more than one Security shall be repurchased from the
same Holder and the Repurchase Price shall be payable in ADRs, the number of
full shares which shall be issued upon such repurchase shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof) to be so repurchased. Instead of any fractional share of ADRs which
would otherwise be issued on the repurchase of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction (calculated to the nearest one-100th of a share) in an amount
equal to the same fraction of the Trading Price of the ADRs as of the Trading
Day preceding the Repurchase Date.
(h) Any issuance and delivery of certificates representing ADRs on
repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the Securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
representing ADRs in a name other than that of the Holder of the Securities
being repurchased, and no such issuance or delivery shall be made unless the
Person requesting such issuance or delivery has paid to the Company the amount
of any such tax or duty or has established, to the satisfaction of the Company,
that such tax or duty has been paid.
(i) All Securities delivered for repurchase shall be delivered to the
Trustee to be canceled at the direction of the Trustee, which shall dispose of
the same as provided in Section 2.17.
ARTICLE 12
CONVERSION OF SECURITIES
Section 12.1 Conversion Right and Conversion Price.
--------------------------------------
(a) Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security or any portion of the principal
amount thereof which is an integral multiple of $1,000 may be converted at the
principal amount thereof, or of such portion thereof, into duly authorized,
fully paid and nonassessable ADRs of the Guarantor, at the Conversion Price,
determined as hereinafter provided, in effect at the time of conversion:
(1) during any Conversion Period, if the Trading Price of the ADRs of
the Guarantor for at least 20 Trading Days in the 30 Trading Day period
ending on the first day of such Conversion Period was more than 120% of the
Conversion Price in effect on such 30th Trading Day;
(2) during the five Business Day period following any period of 10
consecutive Trading Days in which the average of the Trading Prices of the
Securities for such 10 Trading Day period was less than 105% of the average
of the Conversion Values of the Securities during the same period;
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(3) at any time prior to the close of business on the second Business
Day preceding the date fixed for redemption, if such Security has been
called for redemption pursuant to Article 10 hereof;
(4) during any period in which (A) the credit rating assigned to the
Securities by Standard & Poor's Rating Group is below BB+, (B) the credit
rating assigned to the Securities by such rating agency is suspended or
withdrawn or (C) such rating agency is not then rating the Securities; or
(5) as provided in paragraph (b) of this Section 12.1.
Such conversion right shall expire at the close of business on the Business
Day immediately preceding November 15, 2022.
The Conversion Agent shall, on behalf of the Company, determine on a daily
basis whether the Securities shall be convertible as a result of the occurrence
of an event specified in clause (1) or clause (2) above and, if the Securities
shall be so convertible, the Conversion Agent shall promptly deliver to the
Company and the Trustee written notice thereof. Whenever the Securities shall
become convertible pursuant to this Section 12.1, the Company or, at the
Company's request, the Trustee in the name and at the expense of the Company,
shall notify the Holders of the event triggering such convertibility in the
manner provided in Section 13.2, and the Company shall also publicly announce
such information and publish it on the Guarantor's Worldwide Web site. Any
notice so given shall be conclusively presumed to have been duly given, whether
or not the Holder receives such notice.
The Company and the Guarantor hereby agree, and each Holder of Securities
by its purchase thereof shall be deemed to have agreed, that the Conversion
Agent shall incur no liability in connection with its obligations under the
preceding paragraph (including, without limitation, in connection with any
determination whether at any time the Securities shall be convertible as a
result of the occurrence of an event specified in clause (1) or clause (2)
above), except such liability as may result from the Conversion Agent's gross
negligence or willful misconduct. In no event shall the Conversion Agent be
liable to any Person, including any Holder, for any consequential, punitive or
special damages. The Company agrees to indemnify the Conversion Agent for, and
to hold it harmless against, any and all loss, liability, damage, claim or
expense (including the costs and expenses of defending against any claim
(regardless of who asserts such claim) of liability) incurred by the Conversion
Agent that arises out of or in connection with its obligations under the
preceding paragraph, except such as may result from the gross negligence or
willful misconduct of the Conversion Agent or any of its agents or employees.
The Guarantor agrees to guarantee the obligations of the Company under the
preceding sentence. The provisions of this paragraph shall survive the
termination of this Indenture.
(b) In addition, in the event that:
(1) the Guarantor (A) distributes to all holders of Ordinary Shares
rights or warrants entitling them (for a period expiring within 60 days
after the record date for such distribution) to subscribe for or purchase
Ordinary Shares, at
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a price per share less than the Trading Price of the Ordinary Shares on the
Business Day immediately preceding the date of declaration of such
distribution, or (B) distributes to all holders of Ordinary Shares assets,
evidences of its Indebtedness or rights or warrants to purchase its
securities, where the fair market value of such distribution per Ordinary
Share (as determined by the Board of Directors of the Guarantor) exceeds
10% of the Trading Price of an Ordinary Share on the Business Day
immediately preceding the date of declaration of such distribution, then,
in each case, the Securities may be surrendered for conversion at any time
on and after the date that the Company gives notice to the Holders of such
right, which shall be not less than 20 days prior to the ex-dividend date
for such distribution, until the close of business on the Business Day
immediately preceding the ex-dividend date or the Company announces that
such distribution will not take place, whichever is earlier; or
(2) the Guarantor consolidates with or merges into another
corporation, or is a party to a binding share exchange or sells or conveys
its properties and assets as, or substantially as, an entirety to any
Person in a transaction pursuant to which the Ordinary Shares would be
converted into cash, securities or other property as set forth in Section
12.13 hereof, then the Securities may be surrendered for conversion at any
time from and after the date which is 15 days prior to the date announced
by the Company as the anticipated effective time of such transaction until
15 days after the actual date of such transaction.
In case a Security or a portion thereof is called for redemption, such
conversion right in respect of the Security or the portion so called, shall
expire at the close of business on the second Business Day preceding the
Redemption Date, unless the Company defaults in making the payment due upon
redemption. In the event a Holder exercises its Repurchase Right with respect to
a Security or portion thereof, such conversion right in respect of the Security
or portion thereof shall expire at the close of business on the Business Day
immediately preceding the applicable Repurchase Date.
The price at which ADRs shall be delivered upon conversion (the "Conversion
Price") shall be initially equal to $85.7978 per ADR. The Conversion Price shall
be adjusted in certain instances as provided in paragraphs (a), (b), (c), (d),
(e), (f), (h) and (1) of Section 12.4.
Section 12.2 Exercise of Conversion Right.
-----------------------------
To exercise the conversion right, the Holder of any Security to be
converted shall surrender such Security duly endorsed or assigned to the Company
or in blank, at the office of any Conversion Agent, accompanied by a duly signed
conversion notice substantially in the form attached to the Security to the
Company stating that the Holder elects to convert such Security or, if less than
the entire principal amount thereof is to be converted, the portion thereof to
be converted.
Securities surrendered for conversion during the period from the close of
business on any Regular Record Date to the opening of business on the next
succeeding Interest Payment Date (except in the case of any Security whose
Maturity is prior to such Interest Payment Date)
71
shall be accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest to be received on
such Interest Payment Date on the principal amount of Securities being
surrendered for conversion.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the ADRs issuable upon conversion shall be treated for all
purposes as the record holder or holders of such ADRs at such time. As promptly
as practicable on or after the conversion date, the Company shall cause to be
issued and delivered to such Conversion Agent a certificate or certificates
representing the number of ADRs issuable upon conversion of such Securities,
together with payment in lieu of any fraction of a share as provided in Section
12.3.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Securities.
If ADRs to be issued upon conversion of a Restricted Security, or
Securities to be issued upon conversion of a Restricted Security in part only,
are to be registered in a name other than that of the Holder of such Restricted
Security, such Holder must deliver to the Conversion Agent a certificate in
substantially the form set forth in the form of Security set forth in Exhibit A
annexed hereto, dated the date of surrender of such Restricted Security and
signed by such Holder, as to compliance with the restrictions on transfer
applicable to such Restricted Security. Neither the Trustee nor any Conversion
Agent, Registrar or Transfer Agent shall be required to register in a name other
than that of the Holder ADRs or Securities issued upon conversion of any such
Restricted Security not so accompanied by a properly completed certificate.
The Company hereby initially appoints the Trustee as the Conversion Agent.
Section 12.3 Fractions of ADRs.
------------------
No fractional ADRs shall be issued upon conversion of any Security or
Securities. If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full ADRs which shall be issued upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Securities (or specified portions thereof) so surrendered. Instead
of any fractional ADRs which would otherwise be issued upon conversion of any
Security or Securities (or specified portions thereof), the Company shall pay a
cash adjustment in respect of such fraction (calculated to the nearest one-100th
of a share) in an amount equal to the same fraction of the Trading Price of the
ADRs as of the Trading Day preceding the date of conversion.
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Section 12.4 Adjustment of Conversion Price.
-------------------------------
The Conversion Price shall be subject to adjustment, calculated by the
Company, from time to time as follows:
(a) In case the Guarantor shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Ordinary Shares in Ordinary
Shares, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction:
(1) the numerator of which shall be the number of Ordinary Shares
outstanding at the close of business on the Record Date (as defined in
Section 12.4(g)) fixed for such determination; and
(2) the denominator of which shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution.
Such reduction shall become effective immediately after the opening of
business on the day following the Record Date. If any dividend or
distribution of the type described in this Section 12.4(a) is declared but
not so paid or made, the Conversion Price shall again be adjusted to the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(b) In case the outstanding Ordinary Shares shall be subdivided into a
greater number of Ordinary Shares, the Conversion Price in effect at the opening
of business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and conversely, in case outstanding
Ordinary Shares shall be combined into a smaller number of Ordinary Shares, the
Conversion Price in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(c) In case the Guarantor shall issue rights or warrants (other than any
rights or warrants referred to in Section 12.4(d)) to all holders of its
outstanding Ordinary Shares entitling them to subscribe for or purchase Ordinary
Shares (or securities convertible into Ordinary Shares) at a price per share (or
having a conversion price per share) less than the Current Market Price (as
defined in Section 12.4(g)) on the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect at the opening of business on the
date after such Record Date by a fraction:
(1) the numerator of which shall be the number of Ordinary Shares
outstanding at the close of business on the Record Date, plus the number of
shares which the aggregate offering price of the total number of shares so
offered for
73
subscription or purchase (or the aggregate conversion price of the
convertible securities so offered) would purchase at such Current Market
Price; and
(2) the denominator of which shall be the number of Ordinary Shares
outstanding on the close of business on the Record Date, plus the total
number of additional Ordinary Shares so offered for subscription or
purchase (or into which the convertible securities so offered are
convertible).
Such adjustment shall become effective immediately after the opening of
business on the day following the Record Date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent that
Ordinary Shares (or securities convertible into Ordinary Shares) are not
delivered pursuant to such rights or warrants, upon the expiration or
termination of such rights or warrants, the Conversion Price shall be readjusted
to the Conversion Price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of the
delivery of only the number of Ordinary Shares (or securities convertible into
Ordinary Shares) actually delivered. In the event that such rights or warrants
are not so issued, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase Ordinary Shares at less than such Current
Market Price, and in determining the aggregate offering price of such Ordinary
Shares, there shall be taken into account any consideration received for such
rights or warrants, the value of such consideration if other than cash, to be
determined by the Board of Directors.
(d) In case the Guarantor shall, by dividend or otherwise, distribute to
all holders of its Ordinary Shares of any class of capital stock of the
Guarantor (other than any dividends or distributions to which Section 12.4(a)
applies) or evidences of its indebtedness, cash or other assets, including
securities, but excluding (1) any rights or warrants referred to in Section
12.4(c), (2) dividends or distributions of stock, securities or other property
or assets (including cash) in connection with a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or conveyance
to which Section 12.13 applies and (3) dividends and distributions paid
exclusively in cash (such capital stock, evidence of its indebtedness, cash,
other assets or securities being distributed hereinafter in this Section 12.4(d)
called the "distributed assets"), then, in each such case, subject to the second
succeeding paragraph of this Section 12.4(d), the Conversion Price shall be
reduced so that the same shall be equal to the price determined by multiplying
the Conversion Price in effect immediately prior to the close of business on the
Record Date (as defined in Section 12.4(g)) with respect to such distribution by
a fraction:
(1) the numerator of which shall be the Current Market Price
(determined as provided in Section 12.4(g)) on such date, less the fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and set forth in a Board Resolution) on such date of
the portion of the distributed assets so distributed applicable to one
Ordinary Share (determined on the basis of the number of Ordinary Shares
outstanding on the Record Date); and
74
(2) the denominator of which shall be such Current Market Price.
Such reduction shall become effective immediately prior to the opening of
business on the day following the Record Date. However, in the event that the
then fair market value (as so determined) of the portion of the distributed
assets so distributed applicable to one Ordinary Share is equal to or greater
than the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion of a Security (or any portion thereof) the
amount of distributed assets such Holder would have received had such Holder
converted such Security (or portion thereof) immediately prior to such Record
Date. In the event that such dividend or distribution is not so paid or made,
the Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such dividend or distribution had not been declared.
If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 12.4(d) by reference to the actual or
when issued trading market for any distributed assets comprising all or part of
such distribution, it must in doing so consider the prices in such market over
the same period (the "Reference Period") used in computing the Current Market
Price pursuant to Section 12.4(g) to the extent possible, unless the Board of
Directors in a Board Resolution determines in good faith that determining the
fair market value during the Reference Period would not be in the best interest
of the Holders.
Rights or warrants distributed by the Company to all holders of Ordinary
Shares entitling the holders thereof to subscribe for or purchase shares of the
Guarantor's capital stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
("Trigger Event"):
(1) are deemed to be transferred with such Ordinary Shares;
(2) are not exercisable; and
(3) are also issued in respect of future issuances of Ordinary Shares;
shall be deemed not to have been distributed for purposes of this Section
12.4(d) (and no adjustment to the Conversion Price under this Section 12.4(d)
will be required) until the occurrence of the earliest Trigger Event. If such
right or warrant is subject to subsequent events, upon the occurrence of which
such right or warrant shall become exercisable to purchase different distributed
assets, evidences of indebtedness or other assets or entitle the holder to
purchase a different number or amount of the foregoing or to purchase any of the
foregoing at a different purchase price, then the occurrence of each such event
shall be deemed to be the date of issuance and record date with respect to a new
right or warrant (and a termination or expiration of the existing right or
warrant without exercise by the holder thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Price under
this Section 12.4(d):
(1) in the case of any such rights or warrants which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion
75
Price shall be readjusted upon such final redemption or repurchase to give
effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder of Ordinary Shares with respect to
such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Ordinary Shares as of the date of such
redemption or repurchase; and
(2) in the case of such rights or warrants which shall have expired or
been terminated without exercise, the Conversion Price shall be readjusted
as if such rights and warrants had never been issued.
For purposes of this Section 12.4(d) and Sections 12.4(a), 12.4(b) and
12.4(c), any dividend or distribution to which this Section 12.4(d) is
applicable that also includes Ordinary Shares, a subdivision or combination of
Ordinary Shares to which Section 12.4(b) applies, or rights or warrants to
subscribe for or purchase Ordinary Shares to which Section 12.4(c) applies (or
any combination thereof), shall be deemed instead to be:
(1) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants, other than such
Ordinary Shares, such subdivision or combination or such rights or warrants
to which Sections 12.4(a), 12.4(b) and 12.4(c) apply, respectively (and any
Conversion Price reduction required by this Section 12.4(d) with respect to
such dividend or distribution shall then be made), immediately followed by
(2) a dividend or distribution of such Ordinary Shares, such
subdivision or combination or such rights or warrants (and any further
Conversion Price reduction required by Sections 12.4(a), 12.4(b) and
12.4(c) with respect to such dividend or distribution shall then be made),
except:
(A) the Record Date of such dividend or distribution shall be
substituted as (x) "the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution",
"Record Date fixed for such determinations" and "Record Date" within
the meaning of Section 12.4(a), (y) "the day upon which such
subdivision becomes effective" and "the day upon which such
combination becomes effective" within the meaning of Section 12.4(b),
and (z) as "the date fixed for the determination of stockholders
entitled to receive such rights or warrants", "the Record Date fixed
for the determination of the stockholders entitled to receive such
rights or warrants" and such "Record Date" within the meaning of
Section 12.4(c); and
(B) any Ordinary Shares included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date
fixed for such determination" within the meaning of Section 12.4(a)
and any reduction or increase in the number of Ordinary Shares
resulting from such subdivision or combination shall be disregarded in
connection with such dividend or distribution.
76
(e) In case the Guarantor shall, by dividend or otherwise, distribute to
all holders of its Ordinary Shares cash (excluding any cash that is distributed
upon a reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance to which Section 12.13 applies or as
part of a distribution referred to in Section 12.4(d)), in an aggregate amount
that, combined together with:
(1) the aggregate amount of any other such distributions to all
holders of Ordinary Shares made exclusively in cash within the 12 months
preceding the date of payment of such distribution, and in respect of which
no adjustment pursuant to this Section 12.4(e) has been made; and
(2) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution) of consideration payable in
respect of any tender offer by the Guarantor or any of its subsidiaries for
all or any portion of the Ordinary Shares or ADRs concluded within the 12
months preceding the date of such distribution, and in respect of which no
adjustment pursuant to Section 12.4(f) has been made;
exceeds 10% of the product of the Current Market Price of the Ordinary Shares
(determined as provided in Section 12.4(g)) on the Record Date with respect to
such distribution times the number of Ordinary Shares (including Ordinary Shares
represented by ADRs) outstanding on such date, then and in each such case,
immediately after the close of business on such date, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on such
Record Date by a fraction:
(1) the numerator of which shall be equal to the Current Market Price
on the Record Date less an amount equal to the quotient of (x) the excess
of such combined amount over such 10% and (y) the number of Ordinary Shares
outstanding on the Record Date, and
(2) the denominator of which shall be equal to the Current Market
Price on such date.
However, in the event that the then fair market value (as so determined) of the
portion of cash and other securities, if any, so distributed applicable to one
Ordinary Share is equal to or greater than the Current Market Price on the
Record Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive upon conversion of a
Security (or any portion thereof) the amount of cash in excess of such 10% such
Holder would have received had such Holder converted such Security (or portion
thereof) immediately prior to such Record Date. In the event that such dividend
or distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(f) In case a tender offer made by the Guarantor or any of its subsidiaries
for all or any portion of the Ordinary Shares or ADRs shall expire and such
tender offer (as amended
77
upon the expiration thereof) shall require the payment to stockholders (based on
the acceptance (up to any maximum specified in the terms of the tender offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and set forth in a Board Resolution) that combined together with:
(1) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution), as of the expiration of
such tender offer, of consideration payable in respect of any other tender
offers, by the Guarantor or any of its subsidiaries for all or any portion
of the Ordinary Shares or ADRs expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to this Section 12.4(f) has been made; and
(2) the aggregate amount of any distributions to all holders of the
Company's Ordinary Shares made exclusively in cash within 12 months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to Section 12.4(e) has been made;
exceeds 10% of the product of the Current Market Price of the Ordinary Shares
(determined as provided in Section 12.4(g)) as of the last time (the "Expiration
Time") tenders could have been made pursuant to such tender offer (as it may be
amended) times the number of Ordinary Shares outstanding (including Ordinary
Shares represented by ADRs and including any tendered shares) on the Expiration
Time (such excess, the "Excess Amount"), then, and in each such case,
immediately prior to the opening of business on the day after the date of the
Expiration Time, the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to close of business on the date of the Expiration Time by a
fraction:
(1) the numerator of which shall be (x) the product of (1) the number
of Ordinary Shares outstanding (including any tendered shares) at the
Expiration Time and (2) the Current Market Price of the Ordinary Shares at
the Expiration Time less (y) the Excess Amount; and
(2) the denominator shall be the product of the number of Ordinary
Shares outstanding (including any tendered shares) at the Expiration Time
and the Current Market Price of the Ordinary Shares at the Expiration Time.
Such reduction (if any) shall become effective immediately prior to the opening
of business on the day following the Expiration Time. In the event that the
Company is obligated to purchase shares pursuant to any such tender offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all or a portion of such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such (or such portion of the) tender offer had not been made. If the
application of this Section 12.4(f) to any tender offer would result in an
increase in the Conversion Price, no adjustment shall be made for such tender
offer under this Section 12.4(f).
78
(g) For purposes of this Section 12.4, the following terms shall have the
meanings indicated:
(1) "Current Market Price" of an Ordinary Share shall mean the average
of the daily Trading Prices per ADR for the ten consecutive Trading Days
immediately prior to the date in question, minus the fair market value per
ADR of any property (cash or otherwise) then held by the ADR Depositary on
behalf of the existing ADR holders, then dividing the resulting value by
the number of Ordinary Shares represented by each ADR; provided, however,
that if:
(2) the "ex" date (as hereinafter defined) for any event (other than
the issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12.4(a), (b), (c),
(d), (e) or (f) occurs during such ten consecutive Trading Days, the
Trading Price for each Trading Day prior to the "ex" date for such other
event shall be adjusted by multiplying such Trading Price by the same
fraction by which the Conversion Price is so required to be adjusted as a
result of such other event;
(3) the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.4(a), (b), (c), (d), (e) or (f)
occurs on or after the "ex" date for the issuance or distribution requiring
such computation and prior to the day in question, the Trading Price for
each Trading Day on and after the "ex" date for such other event shall be
adjusted by multiplying such Trading Price by the reciprocal of the
fraction by which the Conversion Price is so required to be adjusted as a
result of such other event; and
(4) the "ex" date for the issuance or distribution requiring such
computation is prior to the day in question, after taking into account any
adjustment required pursuant to clause (i) or (ii) of this proviso, the
Trading Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market value
(as determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 12.4(d) or (f), whose
determination shall be conclusive and set forth in a Board Resolution) of
the evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one ADR as of the close of business on the day
before such "ex" date.
For purposes of any computation under Section 12.4(f), if the "ex" date for any
event (other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12.4(a), (b), (c), (d),
(e) or (f) occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and prior to the day in question, the Trading
Price for each Trading Day on and after the "ex" date for such other event shall
be adjusted by multiplying such Trading Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "ex" date, when used:
79
(A) with respect to any issuance or distribution, means the first
date on which the ADRs trade regular way on the relevant exchange or
in the relevant market from which the Trading Price was obtained
without the right to receive such issuance or distribution;
(B) with respect to any subdivision or combination of ADRs, means
the first date on which the ADRs trade regular way on such exchange or
in such market after the time at which such subdivision or combination
becomes effective; and
(C) with respect to any tender or exchange offer, means the first
date on which the ADRs trade regular way on such exchange or in such
market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Price are called for pursuant to this Section 12.4, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 12.4 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.
(5) "fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's length transaction.
(6) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of ADRs
have the right to receive any cash, securities or other property or in
which the ADRs (or other applicable security) is exchanged for or converted
into any combination of cash, securities or other property, the date fixed
for determination of stockholders entitled to receive such cash, securities
or other property (whether such date is fixed by the Board of Directors or
by statute, contract or otherwise).
(h) To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days and the reduction is irrevocable during the period
and the Board of Directors determines in good faith that such reduction would be
in the best interests of the Holders, which determination shall be conclusive
and set forth in a Board Resolution. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Guarantor shall mail to the Trustee and
each Holder at the address of such Holder as it appears in the Register a notice
of the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 12.4(i)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article 12 shall be made
by the Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be. No adjustment need be made for a
change in the par value or no par value of the Ordinary Shares.
80
(j) In any case in which this Section 12.4 provides that an adjustment
shall become effective immediately after a Record Date for an event, the Company
may defer until the occurrence of such event (i) issuing to the Holder of any
Security converted after such Record Date and before the occurrence of such
event the additional Ordinary Shares issuable upon such conversion by reason of
the adjustment required by such event over and above the Ordinary Shares
issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 12.3.
(k) For purposes of this Section 12.4, the number of Ordinary Shares at any
time outstanding shall not include shares held in the treasury of the Guarantor
but shall include shares issuable in respect of certificates issued in lieu of
fractions of Ordinary Shares.
(l) If the distribution date for the rights provided in the Guarantor's
rights agreement, if any, occurs prior to the date a Security is converted, the
Holder of the Security who converts such Security after the distribution date is
not entitled to receive the rights that would otherwise be attached (but for the
date of conversion) to the Ordinary Shares received upon such conversion;
provided, however, that an adjustment shall be made to the Conversion Price
pursuant to clause 12.4(b) as if the rights were being distributed to the
holders of the Ordinary Shares immediately prior to such conversion. If such an
adjustment is made and the rights are later redeemed, invalidated or terminated,
then a corresponding reversing adjustment shall be made to the Conversion Price,
on an equitable basis, to take account of such event.
(m) The initial Conversion Rate reflects that as of the date of this
Indenture, each ADR represents one Ordinary Share. If the number of Ordinary
Shares represented by each ADR changes, the Conversion Price will be adjusted
proportionately.
Section 12.5 Notice of Adjustments of Conversion Price.
------------------------------------------
Whenever the Conversion Price is adjusted as herein provided (other than in
the case of an adjustment pursuant to the second sentence of Section 12.4(h) for
which the notice required by such paragraph has been provided), the Company
shall promptly file with the Trustee and any Conversion Agent other than the
Trustee an Officers' Certificate setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based.
Promptly after delivery of such Officers' Certificate, the Company shall prepare
a notice stating that the Conversion Price has been adjusted and setting forth
the adjusted Conversion Price and the date on which each adjustment becomes
effective, and shall mail such notice to each Holder at the address of such
Holder as it appears in the Register within 20 days of the effective date of
such adjustment. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
Section 12.6 Notice Prior to Certain Actions.
--------------------------------
In case at any time after the date hereof:
(1) the Guarantor shall declare a dividend (or any other distribution)
on its Ordinary Shares payable otherwise than in cash out of its capital
surplus or its consolidated retained earnings;
81
(2) the Guarantor shall authorize the granting to the holders of its
Ordinary Shares of rights or warrants to subscribe for or purchase any
shares of capital stock of any class (or of securities convertible into
shares of capital stock of any class) or of any other rights;
(3) there shall occur any reclassification of the Ordinary Shares of
the Guarantor (other than a subdivision or combination of its outstanding
Ordinary Shares, a change in par value, a change from par value to no par
value or a change from no par value to par value), or any merger,
consolidation, statutory share exchange or combination to which the
Guarantor is a party and for which approval of any shareholders of the
Guarantor is required, or the sale, transfer or conveyance of all or
substantially all of the assets of the Guarantor; or
(4) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Guarantor;
the Guarantor shall cause to be filed at each office or agency maintained for
the purpose of conversion of securities pursuant to Section 9.4, and shall cause
to be provided to the Trustee and all Holders in accordance with Section 13.2,
at least 20 days (or 10 days in any case specified in clause (1) or (2) above)
prior to the applicable record or effective date hereinafter specified, a notice
stating:
(A) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Ordinary Shares of record to be
entitled to such dividend, distribution, rights or warrants are to be
determined; or
(B) the date on which such reclassification, merger, consolidation,
statutory share exchange, combination, sale, transfer, conveyance,
dissolution, liquidation or winding up is expected to become effective, and
the date as of which it is expected that holders of Ordinary Shares of
record shall be entitled to exchange their Ordinary Shares for securities,
cash or other property deliverable upon such reclassification, merger,
consolidation, statutory share exchange, sale, transfer, dissolution,
liquidation or winding up.
Neither the failure to give such notice nor any defect therein shall affect
the legality or validity of the proceedings or actions described in clauses (1)
through (4) of this Section 12.6.
Section 12.7 Guarantor to Reserve Ordinary Shares.
-------------------------------------
The Guarantor shall at all times use its best efforts to reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Ordinary Shares, for the purpose of effecting the conversion of Securities, the
full number of shares of fully paid and nonassessable Ordinary Shares then
issuable upon the conversion of all Outstanding Securities.
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Section 12.8 Covenant as to Ordinary Shares.
-------------------------------
The Company covenants that all Ordinary Shares which may be issued upon
conversion of Securities will upon issue be fully paid and nonassessable and,
except as provided in Section 12.11, the Company will pay all taxes, liens and
charges with respect to the issue thereof.
Section 12.9 Guarantor's Covenant Regarding the Delivery of ADRs.
----------------------------------------------------
(a) Upon receipt by the Company of a Notice of Conversion in the form
contained in Exhibit A of this Indenture, the Guarantor covenants that it will
deposit Ordinary Shares issuable upon conversion of the Securities with the
Depositary in accordance with the terms of the Deposit Agreement and will comply
with the applicable terms of the Deposit Agreement so that ADRs evidencing ADSs
representing such Ordinary Shares will be executed by the ADR Depositary and
delivered to the Holders as required by this Agreement and the Depositary
Agreement.
(b) The Guarantor covenants that it will perform all acts necessary in
order to ensure that ADRs evidencing ADSs representing Ordinary Shares issuable
upon conversion of the Securities are delivered to the Holders entitled thereto.
Section 12.10 Distribution of Ordinary Shares Instead of ADRs.
------------------------------------------------
(a) In the event that Ordinary Shares cease to be represented by ADRs
issued under a depositary receipt program sponsored by the Guarantor, or the
ADRs cease to be quoted on the Nasdaq National Market (and are not at that time
listed on the New York Stock Exchange or another United States national
securities exchange), all references herein to ADRs will be deemed to have been
replaced by a reference to:
(i) the number of Ordinary Shares corresponding to the ADRs on the last
day on which the ADRs were quoted on the Nasdaq National Market; and
(ii) as adjusted, pursuant to the adjustment provisions contained in this
Section 12, for any other property the ADRs represented as if the
other property has been distributed to holders of ADRs on that day.
Section 12.11 Taxes on Conversions.
---------------------
Except as provided in the next sentence, the Company will pay any and all
taxes (other than taxes on income) and duties that may be payable in respect of
the issue or delivery of ADRs on conversion of Securities pursuant hereto. A
Holder delivering a Security for conversion shall be liable for and will be
required to pay any tax or duty which may be payable in respect of any transfer
involved in the issue and delivery of ADRs in a name other than that of the
Holder of the Security or Securities to be converted, and no such issue or
delivery shall be made unless the Person requesting such issue has paid to the
Company the amount of any such tax or duty, or has established to the
satisfaction of the Company that such tax or duty has been paid.
83
Section 12.12 Cancellation of Converted Securities.
-------------------------------------
All Securities delivered for conversion shall be delivered to the Trustee
to be canceled by or at the direction of the Trustee, which shall dispose of the
same as provided in Section 2.17.
Section 12.13 Effect of Reclassification, Consolidation, Merger or Sale.
----------------------------------------------------------
If any of following events occur, namely:
(1) any reclassification or change of the outstanding Ordinary Shares
(other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination);
(2) any merger, consolidation, statutory share exchange or combination
of the Guarantor with another corporation as a result of which holders of
Ordinary Shares shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Ordinary Shares; or
(3) any sale or conveyance of the properties and assets of the
Guarantor as, or substantially as, an entirety to any other corporation as
a result of which holders of Ordinary Shares shall be entitled to receive
stock, securities or other property or assets (including cash) with respect
to or in exchange for such Ordinary Shares;
the Guarantor or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the TIA as in force at the date of execution of such supplemental indenture if
such supplemental indenture is then required to so comply) providing that such
Security shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) which such Holder would
have been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Securities been converted into Ordinary Shares immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Ordinary Shares did not
exercise its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such merger, consolidation, statutory
share exchange, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such merger, consolidation,
statutory share exchange, sale or conveyance is not the same for each Ordinary
Share in respect of which such rights of election shall not have been exercised
("Non-Electing Share"), then for the purposes of this Section 12.13 the kind and
amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance for each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares). Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 12. If, in the case
of any such reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance, the stock or
84
other securities and assets receivable thereupon by a holder of Ordinary Shares
includes shares of stock or other securities and assets of a corporation other
than the successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Holders of the Securities as the Board of
Directors shall reasonably consider necessary by reason of the foregoing,
including to the extent practicable the provisions providing for the Repurchase
Rights set forth in Article 11.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Register, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, mergers, consolidations, statutory share exchanges,
combinations, sales and conveyances.
If this Section 12.13 applies to any event or occurrence, Section 12.4
shall not apply.
Section 12.14 Responsibility of Trustee for Conversion Provisions.
----------------------------------------------------
The Trustee, subject to the provisions of Section 5.1, and any Conversion
Agent shall not at any time be under any duty or responsibility to any Holder of
Securities to determine whether any facts exist which may require any adjustment
of the Conversion Price, or with respect to the nature or intent of any such
adjustments when made, or with respect to the method employed, or herein or in
any supplemental indenture provided to be employed, in making the same. Neither
the Trustee, subject to the provisions of Section 5.1, nor any Conversion Agent
shall be accountable with respect to the validity or value (of the kind or
amount) of any ADRs or Ordinary Share, or of any other securities or property,
which may at any time be issued or delivered upon the conversion of any
Security; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 5.1, nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion; and the Trustee, subject to the provisions of
Section 5.1, and any Conversion Agent shall not be responsible or liable for any
failure of the Company or the Guarantor to comply with any of the covenants of
the Company or the Guarantor contained in this Article.
85
ARTICLE 13
OTHER PROVISIONS OF GENERAL APPLICATION
Section 13.1 Trust Indenture Act Controls.
-----------------------------
This Indenture is subject to the provisions of the TIA which are required
to be part of this Indenture, and shall, to the extent applicable, be governed
by such provisions.
Section 13.2 Notices.
--------
Any notice or communication to the Company or the Trustee is duly given if
in writing (which may be by facsimile with the original to follow) and delivered
in person or mailed by first-class mail to the address set forth below:
(a) if to the Company:
Teva Pharmaceutical Finance B.V.
c/o MeesPierson Trust (Curacao) N.V.
▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: ▇▇▇▇ ▇▇▇▇▇▇▇
(b) if to the Guarantor:
Teva Pharmaceutical Industries Limited
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Israel
Attn.: Uzi Karniel
Fax: ▇▇▇-▇-▇▇▇-▇▇▇▇
with a copy to:
Teva Pharmaceuticals Industries Limited
5 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇-▇▇▇-▇▇▇▇
86
In each case with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Administration -- Global Finance Unit
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by first-class mail
to his address shown on the Register kept by the Registrar. Failure to mail a
notice or communication to a Holder or any defect in such notice or
communication shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed or sent in the manner provided above
within the time prescribed, it is duly given as of the date it is mailed,
whether or not the addressee receives it, except that notice to the Trustee
shall only be effective upon receipt thereof by the Trustee.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee at the same time.
Section 13.3 Communication by Holders with Other Holders.
--------------------------------------------
Holders may communicate pursuant to Section 312(b) of the TIA with other
Holders with respect to their rights under the Securities or this Indenture. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
Section 312(c) of the TIA.
Section 13.4 Acts of Holders of Securities.
------------------------------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders of
Securities may be embodied in and evidenced by:
(1) one or more instruments of substantially similar tenor signed by
such Holders in person or by agent or proxy duly appointed in writing;
87
(2) the record of Holders of Securities voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Securities duly called and held in accordance with the
provisions of Article 8; or
(3) a combination of such instruments and any such record.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company and the
Guarantor. Such instrument or instruments and record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders of Securities signing such instrument or instruments and so voting
at such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent or proxy, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 5.1) conclusive in favor of the Trustee, the Company and the Guarantor
if made in the manner provided in this Section. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 8.6.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be provided in any manner which the Trustee reasonably deems
sufficient.
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of such Person holding the same, shall be proved by the
Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holders of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee, the
Company or the Guarantor in reliance thereon, whether or not notation of such
action is made upon such Security.
Section 13.5 Certificate and Opinion as to Conditions Precedent.
---------------------------------------------------
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 or the Guarantor
may be based, insofar as it relates to legal matters, upon an Opinion of
Counsel, unless such officer knows, or in the exercise of reasonable care should
know, that the Opinion of Counsel with respect to the matters upon which such
certificate or opinion is based is erroneous. Any such Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or
representations by, an officer or officers of the Company or the Guarantor
stating that the information with respect to such factual matters is in the
possession of the Company or the
88
Guarantor, as the case may be, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Upon any application or request by the Company or the Guarantor to the
Trustee to take any action under any provision of this Indenture, the Company or
the Guarantor, as the case may be, shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such Counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Section 13.6 Statements Required in Certificate or Opinion.
----------------------------------------------
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion on behalf of the Company or the Guarantor, as the case may be, has
read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 13.7 Effect of Headings and Table of Contents.
-----------------------------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 13.8 Successors and Assigns.
-----------------------
All covenants and agreements in this Indenture by the Company or the
Guarantor shall bind their respective successors and assigns, whether so
expressed or not.
89
Section 13.9 Separability Clause.
--------------------
In case any provision in this Indenture or the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 13.10 Benefits of Indenture.
----------------------
Nothing contained in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders of Securities, any benefit or legal or
equitable right, remedy or claim under this Indenture.
Section 13.11 Section Governing Law.
----------------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 13.12 Submission to Jurisdiction; Consent to Service; Waivers.
--------------------------------------------------------
The parties hereby submit to the non-exclusive jurisdiction of any federal
or state court sitting in New York City solely for the purpose of any legal
action or proceeding brought to enforce their obligations hereunder or, in the
case of the Guarantor, with respect to any Securities and/or the Guarantees.
Each of the Guarantor and the Company hereby:
(i) agrees that, as long as any of the Securities remain Outstanding or
the parties hereto have any obligation under this Indenture, it
shall have an authorized agent in the United States upon whom
process may be served in any such legal action or proceeding.
Service of process upon such agent and written notice of such
service mailed or delivered to it shall to the extent permitted by
law be deemed in every respect effective service of process upon it
in any such legal action or proceeding and, if it fails to maintain
such an agent, any such process or summons may be served by mailing
a copy thereof by registered mail, or a form of mail substantially
equivalent thereto, addressed to it at its address as provided for
notices hereunder. Each of the Guarantor and the Company hereby
appoints Teva Pharmaceuticals USA, Inc. as its agent for such
purposes, and covenants and agrees that service of process in any
legal action or proceeding may be made upon it at such office of
such agent;
(ii) irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of venue
of any such action or proceeding in any federal or state court
sitting in New York City and any claim that any such action or
proceeding brought in any such court has been brought in an
inconvenient forum;
(iii) irrevocably agrees that the final judgment in any such suit, action
or proceeding brought in such a court shall be conclusive and
binding and
90
may be enforced in the courts of the jurisdiction of which it is
subject by a suit upon judgment;
(iv) irrevocably agrees that, should any such action or proceeding be
brought against it arising out of or in connection with this
Indenture, no immunity (to the extent that it may now or hereafter
exist, whether on the grounds of sovereignty or otherwise) from such
action or proceeding, from attachment (whether in aid of execution,
before judgment or otherwise) of its property, assets or revenues,
or from execution or judgment wherever brought or made, shall be
claimed by it or on its behalf or with respect to its property,
assets or revenues, any such immunity being hereby irrevocably
waived by each of the Company and the Guarantor to the fullest
extent permitted by law; and
(v) irrevocably waives any right to trial by jury in any action,
proceeding or counterclaim arising out of or relating to this
Indenture or the Securities or any transaction related hereto or
thereto.
Section 13.13 Counterparts.
-------------
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original but all such
counterparts shall together constitute but one and the same instrument.
Section 13.14 Legal Holidays.
---------------
In any case where any Interest Payment Date, Redemption Date, Repurchase
Date or Stated Maturity of any Security or the last day on which a Holder of a
Security has a right to convert such Security shall not be a Business Day at any
Place of Payment or Place of Conversion, then (notwithstanding any other
provision of this Indenture or of the Securities) payment of interest (including
Additional Amounts, if any) or principal or conversion of the Securities, need
not be made at such Place of Payment or Place of Conversion on such day, but may
be made on the next succeeding Business Day at such Place of Payment or Place of
Conversion with the same force and effect as if made on the Interest Payment
Date, Redemption Date, Repurchase Date or at the Stated Maturity or on such last
day for conversion; provided, however, that in the case that payment is made on
such succeeding Business Day, no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity, as the case may be.
Section 13.15 Recourse Against Others.
------------------------
No recourse for the payment of the principal of or interest
(including Additional Amounts, if any) on any Securities or Guarantees, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, shareholder, officer or director or manager, as such, past,
present or future, of the Company or the Guarantor of any successor entity to
either the Company or the Guarantor, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the
91
acceptance thereof and as part of the consideration for the issue thereof,
expressly waived and released.
92
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
TEVA PHARMACEUTICAL FINANCE B.V.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Attorney-in-Fact
TEVA PHARMACEUTICAL INDUSTRIES
LIMITED
By: /s/ Israel Makov
------------------------------
Name: Israel Makov
Title: President and Chief Executive
Officer
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
THE BANK OF NEW YORK, as trustee
and not in its individual
capacity
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice-President
EXHIBIT A
FORM OF SECURITY
FORM OF FACE OF SECURITY
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED
TO HEREIN. THIS GLOBAL SECURITY MAY NOT BE EXCHANGED OR TRANSFERRED, IN WHOLE OR
IN PART, FOR A SECURITY REGISTERED IN THE NAME OF ANY PERSON OTHER THAN THE
DEPOSITORY TRUST COMPANY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES SET FORTH IN THE INDENTURE. BENEFICIAL INTERESTS IN THIS GLOBAL
SECURITY MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE INDENTURE.](1)
[THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, THE
SECURITIES ACT, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER JURISDICTION AND IN ACCORDANCE WITH THE
TRANSFER RESTRICTIONS CONTAINED IN THE INDENTURE UNDER WHICH THIS DEBENTURE WAS
ISSUED.](2)
[IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY (X) WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY OR (Y) BY A HOLDER THAT WAS
AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE
DATE OF SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), [THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE (OR ANY SUCCESSOR
TRUSTEE, AS APPLICABLE).](3) THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS TEVA PHARMACEUTICAL FINANCE B.V. MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.](4)
----------
(1) Insert if the Security is a Global Security.
(2) Insert if the Security is a Restricted Security.
(3) Insert if the Security is both a Restricted Security and a Physical
Security.
(4) Insert if the Security is a Restricted Security other than a Regulation S
Global Security.
[THIS SECURITY WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A
GLOBAL SECURITY UNLESS THE HOLDER OF THIS SECURITY, SUBSEQUENT TO SUCH EXCHANGE,
WILL HOLD EITHER NO DEBENTURES OR A MINIMUM AGGREGATE BENEFICIAL INTEREST IN THE
DEBENTURES OF AT LEAST TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000), IF SUCH
HOLDER IS A NON-INSTITUTIONAL INSTITUTIONAL ACCREDITED INVESTOR AN INSTITUTIONAL
ACCREDITED INVESTOR.](5)
----------
(5) Insert if the Security is a Physical Security.
TEVA PHARMACEUTICAL FINANCE B.V.
0.375% Convertible Senior Debentures due 2022
(the "Debentures")
Payment of Principal, Interest and Additional Amounts, if any,
Unconditionally Guaranteed By and Convertible Into American Depositary
Receipts of
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
No.
Original principal balance of all Initial principal balance of this
Debentures (including this Debenture): Debenture:
$450,000,000 $_________
CUSIP:
TEVA PHARMACEUTICAL FINANCE B.V., a company organized under the laws of the
Netherlands Antilles (the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co. or its registered assigns, the principal
sum of ____________________________________ U.S. Dollars ($_________) on
November 15, 2022.
Interest Payment Dates: May 15 and November 15, commencing May 15, 2003
Regular Record Dates: May 1 and November 1
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed manually or by facsimile by its duly authorized officers.
Dated:
TEVA PHARMACEUTICAL FINANCE B.V.
By:
------------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 0.375% Convertible Senior
Debentures due 2022 described in the within-named
Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------
Authorized Signatory
Dated:
Teva Pharmaceutical Industries Limited (the "Guarantor") hereby
unconditionally and irrevocably guarantees to the Holder of this Security the
due and punctual payment of the principal of and interest (including Additional
Amounts, if any), on this Security, when and as the same shall become due and
payable, whether at maturity or upon redemption or upon declaration of
acceleration or otherwise, according to the terms of this Security and of the
Indenture. The Guarantor agrees that in the case of default by the Company in
the payment of any such principal or interest (including Additional Amounts, if
any), the Guarantor shall duly and punctually pay the same. The Guarantor hereby
agrees that its obligations hereunder shall be absolute and unconditional
irrespective of any extension of the time for payment of this Security, any
modification of this Security, any invalidity, irregularity or unenforceability
of this Security or the Indenture, any failure to enforce the same or any
waiver, modification, consent or indulgence granted to the Company with respect
thereto by the Holder of this Security or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or guarantor. The Guarantee is a Guarantee of payment and not of
collection. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a demand or proceeding first against the
Company, protest or notice with respect to this Security or the indebtedness
evidenced hereby and all demands whatsoever, and covenants that this guarantee
will not be discharged as to this security except by payment in full of the
principal of and interest (including Additional Amounts, if any) on this
Security.
For so long as any Securities are outstanding and subject to Section 12.9
of the Indenture, the Guarantor will guarantee the delivery of the ADRs issuable
upon conversion of the Securities pursuant to the terms of the Indenture and the
Securities.
The Guarantor shall be subrogated to all rights of the Holders against the
Company in respect of any amounts paid by the Guarantor pursuant to the
provisions of the Guarantee or the Indenture; provided, however, that the
Guarantor hereby waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment hereunder (i) to be
subrogated to the rights of a Holder against the Company with respect to such
payment or otherwise to be reimbursed, indemnified or exonerated by the Company
in respect thereof or (ii) to receive any payment in the nature of contribution
or for any other reason, from any other obligor with respect to such payment, in
each case, until the principal of and interest (including Additional Amounts, if
any) on this Security shall have been paid in full.
The Guarantee shall not be valid or become obligatory for any purpose with
respect to this Security until the certificate of authentication on this
Security shall have been signed by the Trustee.
The Guarantee shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to the principles of
conflicts of law thereof.
IN WITNESS WHEREOF, Teva Pharmaceutical Industries Limited has caused the
Guarantee to be signed manually or by facsimile by its duly authorized officers.
TEVA PHARMACEUTICAL INDUSTRIES
LIMITED
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
FORM OF REVERSE OF SECURITY
TEVA PHARMACEUTICAL FINANCE B.V.
0.375% Convertible Senior Debenture due 2022
Payment of Principal, Interest and Additional Amounts, if any,
Unconditionally Guaranteed By and Convertible Into American Depositary
Receipts of
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. Principal and Interest.
Teva Pharmaceutical Finance B.V., a company duly organized and existing
under the laws of the Netherlands Antilles (the "Company"), promises to pay
interest on the principal amount of this Security at the Interest Rate from
November 18, 2002 until repayment at Maturity, redemption or repurchase. The
Company will pay interest on this Security semiannually in arrears on May 15 and
November 15 of each year (each an "Interest Payment Date"), commencing May 15,
2003.
Interest on the Securities shall be computed (i) for any full semiannual
period for which a particular Interest Rate is applicable on the basis of a
360-day year of twelve 30-day months and (ii) for any period for which a
particular Interest Rate is applicable shorter than a full semiannual period for
which interest is calculated, on the basis of a 30-day month and, for such
periods of less than a month, the actual number of days elapsed over a 30-day
month.
A Holder of any Security at the close of business on a Regular Record Date
shall be entitled to receive interest (including Additional Amounts, if any) on
such Security on the corresponding Interest Payment Date. A Holder of any
Security which is converted after the close of business on a Regular Record Date
and prior to the corresponding Interest Payment Date (other than any Security
whose Maturity is prior to such Interest Payment Date) shall be entitled to
receive interest (including Additional Amounts, if any) on the principal amount
of such Security, notwithstanding the conversion of such Security prior to such
Interest Payment Date. However, any such Holder which surrenders any such
Security for conversion during the period between the close of business on such
Regular Record Date and ending with the opening of business on the corresponding
Interest Payment Date shall be required to pay the Company an amount equal to
the interest (including Additional Amounts, if any) on the principal amount of
such Security so converted, which is payable by the Company to such Holder on
such Interest Payment Date, at the time such Holder surrenders such Security for
conversion. Notwithstanding the foregoing, any such Holder which surrenders for
conversion any Security which has been called for redemption by the Company in a
notice of redemption given by the
Company pursuant to Section 10.4 of the Indenture shall be entitled to receive
(and retain) such interest (including Additional Amounts, if any) and need not
pay the Company an amount equal to the interest (including Additional Amounts,
if any) on the principal amount of such Security so converted at the time such
Holder surrenders such Security for conversion.
In accordance with the terms of the Resale Registration Rights Agreement,
dated November 18, 2002 (the "Registration Rights Agreement"), among the
Company, the Guarantor, ▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.,
during the first 90 days following a Registration Default (as defined in the
Registration Rights Agreement), the Interest Rate borne by the Securities shall
be increased by 0.25% on:
(A) February 17, 2003, if the Shelf Registration Statement (as defined
in the Registration Rights Agreement) is not filed prior to or on February
16, 2003;
(B) May 18, 2003, if the Shelf Registration Statement is not declared
effective by the Securities and Exchange Commission prior to or on May 17,
2003;
(C) Except during any period that the prospectus contained in the
Shelf Registration Statement has been suspended, the day after the fifth
Business Day after the Shelf Registration Statement, previously declared
effective, ceases to be effective or fails to be usable, if a
post-effective amendment (or report filed pursuant to the Exchange Act)
that cures the Shelf Registration Statement is not filed with the
Securities and Exchange Commission during such five Business Day period; or
(D) the day following the 45th or 60th day, as the case may be, of any
period that the prospectus contained in the Shelf Registration Statement
has been suspended, if such suspension has not been terminated.
From and after the 91st day following such Registration Default, the Interest
Rate borne by the Securities shall be increased by 0.50%. In no event shall the
Interest Rate borne by the Securities be increased by more than 0.50%.
Any amount of additional interest will be payable in cash semiannually, in
arrears, on each Interest Payment Date and will cease to accrue on the date the
Registration Default is cured. The Holder of this Security is entitled to the
benefits of the Registration Rights Agreement.
2. Method of Payment.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Principal of and interest (including Additional Amounts, if any) on, Global
Securities will be payable to the Depositary in immediately available funds.
Principal on Physical Securities will be payable at the office or agency of
the Company maintained for such purpose, initially the Corporate Trust Office of
the Trustee. Interest (including Additional Amounts, if any) on Physical
Securities will be payable by (i) U.S. Dollar check drawn on a bank in The City
of New York mailed to the address of the Person entitled thereto as such address
shall appear in the Register, or (ii) upon application to the Registrar not
later than the relevant Record Date by a Holder of an aggregate principal amount
in excess of $5,000,000, wire transfer in immediately available funds, which
application shall remain in effect until the Holder notifies, in writing, the
Registrar to the contrary.
3. Paying Agent and Registrar.
Initially, The Bank of New York, the Trustee under the Indenture, will act
as Paying Agent and Registrar. The Company may change the Paying Agent or
Registrar without notice to any Holder.
4. Indenture.
The Company issued this Security under an Indenture, dated as of November
18, 2002 (the "Indenture"), among the Company, the Guarantor and The Bank of New
York, as trustee (the "Trustee"). The terms of the Security include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended ("TIA"). This Security is subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
all such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of the Indenture,
the terms of the Indenture shall control.
5. Optional Redemption.
This Security (except for such portion of the Security that the Company is
required to repurchase pursuant to Section 11.1(a) of the Indenture) may be
redeemed in whole upon not less than 20 nor more than 60 days' notice, at any
time on or after November 18, 2007, at the option of the Company, at the
Redemption Price equal to the principal amount of such Securities plus any
interest (including Additional Amounts, if any) accrued and unpaid to, but
excluding, the Redemption Date.
Securities in original denominations larger than $1,000 may be redeemed in
part. If any Security selected for partial redemption is converted or
repurchased in part before termination of the conversion or repurchase right
with respect to the portion of the Security so selected, the converted or
repurchased portion of such Security shall be deemed to be the portion selected
for redemption (provided, however, that the Holder of such Security so converted
or repurchased and deemed redeemed shall not be entitled to any additional
interest payment as a result of such deemed redemption than such Holder would
have otherwise been entitled to receive upon conversion of such Security).
Securities which have been converted or repurchased during a selection of
Securities to be redeemed may be treated by the Trustee as Outstanding for the
purpose of such selection.
On and after the Redemption Date, interest shall cease to accrue on
Securities or portions of Securities called for redemption, unless the Company
defaults in the payment of the Redemption Price.
Notice of redemption will be given by the Company to the Holders as
provided in the Indenture.
6. Repurchase Rights.
Optional Repurchase Rights. On November 18, 2007, November 15, 2012, and
November 15, 2017, the Holder of Securities, at the Holder's option, shall have
the right, in accordance with the provisions of the Indenture, to require the
Company to repurchase the Securities (or any portion of the principal amount
hereof that is equal to any integral multiple of $1,000 (provided that no single
Security may be repurchased in part unless the portion of the principal amount
of this Security to be Outstanding after such repurchase is equal to an integral
multiple of $1,000) at a repurchase price equal to 100% of the principal amount
of the Securities plus interest (including Additional Amounts, if any) accrued
and unpaid to Optional Repurchase Date.
Repurchase Right Upon a Change of Control or Termination of Trading. If a
Change in Control or a Termination of Trading occurs, the Holder of Securities,
at the Holder's option, shall have the right, in accordance with the provisions
of the Indenture, to require the Company to repurchase the Securities (or any
portion of the principal amount hereof that is at least an integral multiple of
$1,000, provided that the portion of the principal amount of this Security to be
Outstanding after such repurchase is at least equal to $1,000) at 100% of the
principal amount of the Securities, plus any interest accrued and unpaid to the
Repurchase Date.
Subject to the conditions provided in the Indenture, upon exercise by the
Holder of its First Optional Repurchase Right or Fundamental Change Repurchase
Right, the Company may elect to pay some or all of the Repurchase Price by
delivering a number of ADRs equal to (i) a Repurchase Price divided by (ii) 97%
of the average of the Trading Prices per ADR for the five consecutive Trading
Days immediately preceding and including the third Trading Day prior to the
applicable Repurchase Date.
No fractional ADRs will be issued upon repurchase of any Securities.
Instead of any fractional ADR which would otherwise be issued upon conversion of
such Securities, the Company shall pay a cash adjustment as provided in the
Indenture.
A Company Notice will be given by the Company to the Holders as provided in
the Indenture. To exercise a repurchase Right, a Holder must deliver to the
Trustee a written notice as provided in the Indenture.
7. Conversion Rights.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of Securities is entitled, at such Holder's option, to convert the
Holder's Securities (or any portion
of the principal amount hereof which is an integral multiple of $1,000), at the
principal amount thereof or of such portion, into duly authorized, fully paid
and nonassessable ADRs of the Guarantor, at the Conversion Price in effect at
the time of conversion:
(A) during any Conversion Period, if the Trading Price of the ADRs of
the Guarantor for at least 20 Trading Days in the 30 Trading Day period
ending on the first day of such Conversion Period was more than 120% of the
Conversion Price in effect on such 30th Trading Day;
(B) during the five Business Day period following any period of 10
consecutive Trading Days in which the average of the Trading Prices of the
Securities for such 10 Trading Day period was less than 105% of the average
of the Conversion Values of the Securities during the same period;
(C) at any time prior to the close of business on the second Business
Day preceding the date fixed for redemption, if such Security has been
called for redemption pursuant to the terms of the Indenture;
(D) during any period in which (A) the credit rating assigned to the
Securities by Standard & Poor's Rating Group is below BB+, (B) the credit
rating assigned to the Securities by such rating agency is suspended or
withdrawn or (C) such rating agency is not then rating the Securities; or
(E) in the event of certain corporate transactions as provided in the
Indenture.
Such conversion right shall expire at the close of business on the Business
Day immediately preceding November 15, 2022.
In the case of a Security (or a portion thereof) called for redemption,
such conversion right in respect of the Security (or such portion thereof) so
called, shall expire at the close of business on the second Business Day
preceding the Redemption Date, unless the Company defaults in making the payment
due upon redemption. In the event a Holder exercises its Repurchase Right with
respect to a Security (or a portion thereof), such conversion right in respect
of the Security (or portion thereof) shall expire at the close of business on
the Business Day preceding the Repurchase Date.
The Conversion Price shall be initially equal to $85.7978 per ADR. The
Conversion Price shall be adjusted under certain circumstances as provided in
the Indenture.
To exercise the conversion right, the Holder must surrender the Security
(or portion thereof) duly endorsed or assigned to the Company or in blank, at
the office of the Conversion Agent, accompanied by a duly signed conversion
notice to the Company. Any Security surrendered for conversion during the period
from the close of business on any Regular Record Date to the opening of business
on the corresponding Interest Payment Date (other than any Security whose
Maturity is prior to such Interest Payment Date), shall also be accompanied by
payment in New York Clearing House funds or other funds acceptable to the
Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of the Securities being surrendered for conversion.
No fractional ADRs will be issued upon conversion of any Securities.
Instead of any fractional ADR which would otherwise be issued upon conversion of
such Securities, the Company shall pay a cash adjustment as provided in the
Indenture.
8. Denominations; Transfer; Exchange.
The Securities are issuable in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000 in excess thereof. A
Holder may register the transfer or exchange of Securities in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture.
In the event of a redemption in part, the Company will not be required (a)
to register the transfer of, or exchange, Securities for a period of 15 days
immediately preceding the date notice is given identifying the serial numbers of
the Securities called for such redemption, or (b) to register the transfer of,
or exchange, any such Securities, or portion thereof, called for redemption.
In the event of redemption, conversion or repurchase of the Securities in
part only, a new Security or Securities for the unredeemed, unconverted or
unrepurchased portion thereof will be issued in the name of the Holder hereof.
9. Persons Deemed Owners.
The registered Holder of this Security shall be treated as its owner for
all purposes.
10. Unclaimed Money.
The Trustee and the Paying Agent shall pay to the Company any money held by
them for the payment of principal if any, or interest that remains unclaimed for
18 months after the date upon which such payment shall have become due. After
payment to the Company, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity.
Subject to certain conditions contained in the Indenture, the Company may
discharge its obligations under the Securities and the Indenture if (1) (a) all
of the Outstanding Securities shall become due and payable at their scheduled
Maturity within one year or (b) all of the Outstanding Securities are scheduled
for redemption within one year, and (2) the Company
shall have deposited with the Trustee money and/or U.S. Government Obligations
sufficient to pay the principal of and interest on, all of the Outstanding
Securities on the date of Maturity or redemption, as the case may be.
12. Amendment; Supplement; Waiver.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Outstanding Securities (or such
lesser amount as shall have acted at a meeting pursuant to the provisions of the
Indenture). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security or
such other Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest (including
Additional Amounts, if any) on this Security at the times, places and rate, and
in the coin or currency, herein prescribed or to convert this Security (or pay
cash in lieu of conversion) as provided in the Indenture.
13. Defaults and Remedies.
The Indenture provides that an Event of Default with respect to the
Securities occurs when any of the following occurs:
(a) the Company defaults in the payment of the principal of any of the
Securities when it becomes due and payable at Maturity, upon redemption or
exercise of a repurchase right or otherwise;
(b) the Company defaults in the payment of interest (including
Additional Amounts, if any) on any of the Securities when it becomes due
and payable and such default continues for a period of 30 days;
(c) the Guarantor fails to perform under the Guarantees;
(d) either the Company or the Guarantor fails to perform or observe
any other term, covenant or agreement contained in the Securities or
Indenture and the default continues for a period of 60 days after written
notice of such failure is given as specified in the Indenture;
(e) (i) either the Company or the Guarantor fails to make any payment
by the end of the applicable grace period, if any, any payment of principal
or interest due in respect of any Indebtedness for borrowed money, the
aggregate outstanding principal amount of which is an amount in excess of
$25,000,000; or (ii) there is an acceleration of any Indebtedness for
borrowed money in an amount in excess of $25,000,000 because of a default
with respect to such Indebtedness without such Indebtedness having been
discharged or such acceleration having been cured, waived, rescinded or
annulled, in the case of either (i) or (ii) above, for a period of 30 days
after written notice of such failure is given as specified in the Indenture
(f) there are certain events of bankruptcy, insolvency or
reorganization of the Company or Guarantor.
If an Event of Default shall occur and be continuing, the principal of all
the Securities may be declared due and payable in the manner and with the effect
provided in the Indenture.
14. Authentication.
This Security shall not be valid until the Trustee (or authenticating
agent) executes the certificate of authentication on the other side of this
Security. 15. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
16. Additional Rights of Holders of Transfer Restricted Securities.
In addition to the rights provided to Holders under the Indenture, Holders
of Transfer Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement.
17. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on this Security and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on this Security or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
18. Governing Law.
The Indenture and this Security shall be governed by, and construed in
accordance with, the law of the State of New York.
19. Successor Corporation.
In the event a successor corporation assumes all the obligations of the
Company or the Guarantor under this Security, pursuant to the terms hereof and
of the Indenture, the Company or Guarantor, as the case may be, will be released
from all such obligations.
ASSIGNMENT FORM
To assign this Security, fill in the form below and have your
signature guaranteed: (I) or (we) assign and transfer this Security to:
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: ___________________ Your Name: _______________________________________
(Print your name exactly as it appears on the
face of this Security)
Your Signature: __________________________________
(Sign exactly as your name appears on the face
of this Security)
Signature Guarantee*: ____________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
CERTIFICATIONS UPON TRANSFER.(6)
In connection with any transfer of this Security other than pursuant to a
registration statement that has been declared effective under the Securities Act
of 1933, as amended (the "Securities Act") (and which continues to be effective
at the time of such sale) occurring prior to the date which is the end of the
period referred to in Rule 144(k) under the Securities Act, the undersigned
confirms that without utilizing any general solicitation or general advertising
that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption from
registration under the Securities Act provided by Rule 144A thereunder,
and that the transfer has been effected pursuant to and in accordance
with Rule 144A under the Securities Act and, accordingly, the
undersigned does hereby further certify that the Securities are being
transferred to a transferee that the undersigned reasonably believes is
purchasing the Securities for its own account, or for one or more
accounts with respect to which such transferee exercises sole investment
discretion, and such transferee and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144A and in accordance with
any applicable securities laws of any state of the United States.
or
[ ] (b) this Security is being transferred in compliance with the exemption from
registration under the Securities Act provided by Regulation S
thereunder, and (A) the offer of the Securities was not made to a person
in the United States; (B) either: (i) at the time the buy order was
originated, the transferee was outside the United States or the
Transferor and any person acting on its behalf reasonably believed that
the transferee was outside the United States, or (ii) the transaction
was executed in, on or through the facilities of a designated offshore
securities market and neither the Transferor nor any person acting on
its behalf knows that the transaction was pre-arranged with a buyer in
the United States; (C) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of Regulation
S, as applicable; and (D) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act.
or
[ ] (c) this Security is being transferred other than in accordance with (a) or
(b) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
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(6) This page and the two pages immediately following should be included if the
Security is a Physical Security.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless the conditions to any such transfer of registration set
forth herein and in Sections 2.9, 2.10 and 2.11 of the Indenture shall have been
satisfied.
Dated: ___________________ __________________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in
every particular, without alteration or any
change whatsoever.
Signature Guarantee:
__________________________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or
other signature guarantor acceptable to the
Trustee.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that: (a) it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion, in each case for investment and not with a view to
distribution; (b) it and any such account is a "Qualified Institutional Buyer"
within the meaning of Rule 144A under the Securities Act of 1933; (c) it is
aware that the sale to it is being made in reliance on Rule 144A; (d) it
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information; and (e) it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:____________________ __________________________________________________
NOTICE: To be executed by an executive officer
TO BE COMPLETED BY PURCHASER IF (b) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing the
Securities for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account are not "U.S.
persons" as defined in Regulation S under the Securities Act.
Dated: ___________________ __________________________________________________
NOTICE: To be executed by an executive officer
CONVERSION NOTICE
TO: TEVA PHARMACEUTICAL FINANCE B.V.
c/o MeesPierson Trust (Curacao) N.V.
▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (the
principal amount of which is an integral multiple of $1,000) below designated,
into ADRs in accordance with the terms of the Indenture referred to in this
Security, and directs that the ADRs issuable and deliverable upon such
conversion, together with any check in payment for fractional ADRs and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Security not converted are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. Any amount required to
be paid to the undersigned on account of interest (including Additional Amounts,
if any) accompanies this Security.
Dated: ___________________ Your Name: _______________________________________
(Print your name exactly as it appears on the
face of this Security)
Your Signature: __________________________________
(Sign exactly as your name appears on the face
of this Security)
Signature Guarantee*: ____________________________
Social Security or other Taxpayer
Identification Number:____________________________
Principal amount to be converted (if less than all): $
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
Fill in for registration of ADRs (if to be issued) and Securities (if to be
delivered) other than to and in the name of the registered holder:
________________________________________________
(Name)
________________________________________________
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
________________________________________________
(City, State and Zip Code)
NOTICE OF EXERCISE OF REPURCHASE RIGHT
TO: TEVA PHARMACEUTICAL FINANCE B.V.
c/o MeesPierson Trust (Curacao) N.V.
▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Teva Pharmaceutical Finance B.V. (the
"Company") [as to the right of a holder to require repurchase by the Company of
this Security on [November 18, 2007] [November 15, 2012], [November 15, 2017]]
[as to the occurrence of a Change of Control/Termination of Trading] with
respect to the Company and requests and instructs the Company to repay the
entire principal amount of this Security, or the portion thereof (the principal
amount of which is an integral multiple of $1,000) below designated, in
accordance with the terms of the Indenture referred to in this Security,
together with interest (including Additional Amounts, if any) accrued and unpaid
to, but excluding, such date, to the registered holder hereof, in cash.
Dated: ___________________ Your Name: _______________________________
(Print your name exactly as it appears on the
face of this Security)
Your Signature: __________________________
(Sign exactly as your name appears on the face
of this Security)
Signature Guarantee:* ____________________
Social Security or other Taxpayer
Identification Number: ___________________
Principal amount to be repaid (if less than all): $
----------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
SCHEDULE OF EXCHANGES FOR PHYSICAL SECURITIES(7)
The following exchanges of a part of this Global Security for Physical
Securities have been made:
Principal Amount of this
Amount of decrease in Amount of increase in Global Security Signature of
Principal Amount of Principal Amount of following such decrease Authorized officer of
Date of Exchange this Global Security this Global Security (or increase) Trustee
---------------- --------------------- --------------------- ------------------------- ---------------------
----------
(7) This page should be included only if the Security is a Global Security.
EXHIBIT B
FORM OF INVESTMENT REPRESENTATION LETTER
(INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATES)
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: 0.375% Convertible Senior Debentures due 2021 of Teva Pharmaceutical
Finance B.V. (the "Securities")
Ladies and Gentlemen:
In connection with the undersigned's proposed purchase of $____________
aggregate principal amount of 0.375% Convertible Senior Debentures due 2021 (the
"Debentures") of Teva Pharmaceutical Finance B.V. (the "Company"), the
undersigned confirms, represents and warrants that:
(1) The undersigned is (a) an institutional "accredited investor"
within the meaning of Rule 501(A)(1), (2), (3) or (7) under the Securities
Act of 1933, as amended (the "Securities Act") or an entity in which all of
the equity owners are accredited investors within the meaning of Rule 501
under the Securities Act (an "Institutional Accredited Investor") or (b) an
"accredited investor" within the meaning of Rule 501(A)(4), (5) or (6)
under the Securities Act (a "Non-institutional Accredited Investor").
(2) (A) Any purchase of the Securities by the undersigned will be for
the undersigned's own account or for the account of one or more other
Institutional Accredited Investors or Non-institutional Accredited
Investors or as fiduciary for the account of one or more trusts, each of
which is an "accredited investor" within the meaning of Rule 501(A)(7)
under the Securities Act and for each of which the undersigned exercises
sole investment discretion or (B) the undersigned is a "bank", within the
meaning of Section 3(a)(2) of the Securities Act, or a "savings and loan
association" or other institution described in Section 3(a)(5)(A) of the
Securities Act that is acquiring the Securities as fiduciary for the
account of one or more institutions for which the undersigned exercises
sold investment discretion.
(3) The undersigned will acquire Securities having a minimum aggregate
principal amount of $250,000 for its own account or for any separate
account for which the undersigned is acting.
B-1
(4) The undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the merits
and risks of its investment in the Securities, and the undersigned and any
accounts for which it is acting is each able to bear the economic risk of
its or their investment.
(5) The undersigned is not acquiring the Securities with a view to
distribution thereof or with any present intention of offering or selling
any Securities or ADRs of the Company issuable upon conversion thereof,
except as permitted below; provided that the disposition of the
undersigned's property and the property of any accounts for which the
undersigned is acting as fiduciary will remain at all times within the
undersigned's control.
(6) The undersigned understands that the Securities and the ADRs
issuable upon conversion thereof have not been registered under the
Securities Act or any applicable state securities laws.
(7) The undersigned agrees, on its own behalf and on behalf of each
account for which the undersigned acquires any Securities, that if in the
future the undersigned decides to resell or otherwise transfer such
Securities within two years after the original issuance of the Securities,
such Securities may be resold or otherwise transferred only:
(A) to the Company or any subsidiary thereof;
(B) to a person which is a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in compliance with Rule 144A
under the Securities Act;
(C) to a non-U.S. person outside the United States in compliance with
Regulation S under the Securities Act;
(D) pursuant to an exemption from registration under the Securities
Act to an Accredited Investor that is purchasing Securities having an
aggregate principal amount of at least $250,000 (or a number of shares
of Common Stock at least equal to $250,000 divided by $85.824 (the
initial conversion price)) and that, prior to such transfer, furnishes
to you (or the transfer agent, as the case may be) a signed letter
substantially in the form of this letter;
(E) pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available); or
(F) pursuant to a registration statement which has been declared
effective under the Securities Act (and continues to be effective at
the time of such transfer).
The undersigned further agrees to provide to any person purchasing any of
the Securities from us a notice advising such purchaser that resales of the
Securities are restricted as stated herein.
B-2
(8) The undersigned understands that, on any proposed resale of any
Securities, the undersigned will be required to furnish to you and the
Company such certifications, legal opinions and other information as you
and the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. The undersigned further
understands that the Securities purchased by the undersigned will be in
definitive form and will bear a legend to the foregoing effect.
(9) With respect to the certificates representing Securities the
undersigned is purchasing, the undersigned understands that such
certificates will be in definitive registered form and that the
notification requirement referred to in (9) above requires that, until the
expiration of the holding period with respect to sales of the Securities
under clause (k) of Rule 144 under the Securities Act, such Securities will
bear legends to the as set forth in the Indenture.
(10) With respect to the certificates representing ADRs issuable upon
conversion of the Securities, the undersigned understands that the
notification requirement referred to in (8) above requires that, until the
expiration of the holding period with respect to sales of such ADRs under
clause (k) of Rule 144 under the Securities Act, such certificates will
bear a legend substantially to the effect set forth in Section 2.3(a)(ii)
of the Indenture and that a copy of such legend may be obtained from the
Trustee.
Each of the Company, the Trustee and the initial purchasers of the
Securities are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
Name:
Title:
Address:
B-3
EXHIBIT C
FORM OF CERTIFICATE FOR TRANSFER PURSUANT TO REGULATION S
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: 0.375% Convertible Senior Debentures due 2021 of Teva Pharmaceutical
Finance B.V. (the "Securities")
Ladies and Gentlemen:
In connection with the undersigned's proposed sale of $____________ aggregate
principal amount of 0.375% Convertible Senior Debentures due 2021 (the
"Debentures") of Teva Pharmaceutical Finance B.V. (the "Company"), the
undersigned confirms, represents and warrants that these Debentures are being
transferred in compliance with the exemption from registration under the
Securities Act provided by Regulation S thereunder, and (A) the offer of the
Debentures was not made to a person in the United States; (B) either: (i) at the
time the buy order was originated, the transferee was outside the United States
or the Transferor and any person acting on its behalf reasonably believed that
the transferee was outside the United States, or (ii) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither the Transferor nor any person acting on its behalf knows that
the transaction was pre-arranged with a buyer in the United States; (C) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or 904(b) of Regulation S, as applicable; and (D) the transaction is
not part of a plan or scheme to evade the registration requirements of the
Securities Act.
Each of the Company, the Trustee and the initial purchasers of the
Securities are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
Name:
Title:
Address:
C-1