Document:

Exhibit 4.1

 

FOSSIL GROUP, INC.,
  as Issuer

 

and

 

WELLS FARGO BANK, N.A.,
  as Trustee

 

SENIOR INDENTURE

 

Dated as of March [·], 2015

 

SENIOR DEBT SECURITIES

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE
    	
1
    
	
Section 1.01
    	
Definitions
    	
1
    
	
Section 1.02
    	
Other Definitions
    	
6
    
	
Section 1.03
    	
Incorporation by Reference of   Trust Indenture Act
    	
6
    
	
Section 1.04
    	
Rules of Construction
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE II. THE SECURITIES
    	
7
    
	
Section 2.01
    	
Form, Dating and Terms
    	
7
    
	
Section 2.02
    	
Denominations
    	
10
    
	
Section 2.03
    	
Forms Generally
    	
10
    
	
Section 2.04
    	
Execution, Authentication,   Delivery and Dating
    	
11
    
	
Section 2.05
    	
Registrar and Paying Agent
    	
12
    
	
Section 2.06
    	
Paying Agent to Hold Money in   Trust
    	
13
    
	
Section 2.07
    	
Holder Lists
    	
13
    
	
Section 2.08
    	
Transfer and Exchange
    	
13
    
	
Section 2.09
    	
Mutilated, Destroyed, Lost or   Wrongfully Taken Securities
    	
14
    
	
Section 2.10
    	
Outstanding Securities
    	
15
    
	
Section 2.11
    	
Cancellation
    	
15
    
	
Section 2.12
    	
Payment of Interest; Defaulted   Interest
    	
16
    
	
Section 2.13
    	
Temporary Securities
    	
17
    
	
Section 2.14
    	
Persons Deemed Owners
    	
17
    
	
Section 2.15
    	
Computation of Interest
    	
17
    
	
Section 2.16
    	
Global Securities; Book-Entry   Provisions
    	
17
    
	
Section 2.17
    	
CUSIP Numbers, Etc.
    	
19
    
	
Section 2.18
    	
Original Issue Discount and   Foreign-Currency Denominated Securities
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE III. COVENANTS
    	
20
    
	
Section 3.01
    	
Payment of Securities
    	
20
    
	
Section 3.02
    	
Reports
    	
20
    
	
Section 3.03
    	
Maintenance of Office or Agency
    	
21
    
	
Section 3.04
    	
Corporate Existence
    	
21
    
	
Section 3.05
    	
Compliance Certificate
    	
21
    
	
Section 3.06
    	
Statement by Officers as to   Default
    	
21
    
	
Section 3.07
    	
Additional Amounts
    	
22
    
	
Section 3.08
    	
Calculation of Original Issue   Discount
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE IV. SUCCESSORS
    	
23
    
	
Section 4.01
    	
Consolidation, Merger or Sale   of Assets
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE V. REDEMPTION OF SECURITIES
    	
23
    
	
Section 5.01
    	
Applicability of Article
    	
23
    
	
Section 5.02
    	
Election to Redeem; Notice to   Trustee
    	
23
    
	
Section 5.03
    	
Selection by Trustee of   Securities to Be Redeemed
    	
24
    
	
Section 5.04
    	
Notice of Redemption
    	
24
    

 

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 5.05
    	
Deposit of Redemption Price
    	
25
    
	
Section 5.06
    	
Securities Payable on   Redemption Date
    	
25
    
	
Section 5.07
    	
Securities Redeemed in Part
    	
25
    
	
 
    	
 
    	
 
    
	
ARTICLE VI. DEFAULTS AND REMEDIES
    	
26
    
	
Section 6.01
    	
Events of Default
    	
26
    
	
Section 6.02
    	
Acceleration
    	
27
    
	
Section 6.03
    	
Other Remedies
    	
28
    
	
Section 6.04
    	
Waiver of Past Defaults
    	
28
    
	
Section 6.05
    	
Control by Majority
    	
29
    
	
Section 6.06
    	
Limitation on Suits
    	
29
    
	
Section 6.07
    	
Rights of Holders to Receive   Payment
    	
29
    
	
Section 6.08
    	
Collection Suit by Trustee
    	
29
    
	
Section 6.09
    	
Trustee May File Proofs of   Claim
    	
30
    
	
Section 6.10
    	
Priorities
    	
30
    
	
Section 6.11
    	
Undertaking for Costs
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE VII. TRUSTEE
    	
31
    
	
Section 7.01
    	
Duties of Trustee
    	
31
    
	
Section 7.02
    	
Rights of Trustee
    	
32
    
	
Section 7.03
    	
Individual Rights of Trustee
    	
34
    
	
Section 7.04
    	
Trustee’s Disclaimer
    	
34
    
	
Section 7.05
    	
Notice of Defaults
    	
34
    
	
Section 7.06
    	
Reports by Trustee to Holders
    	
34
    
	
Section 7.07
    	
Compensation and Indemnity
    	
34
    
	
Section 7.08
    	
Replacement of Trustee
    	
35
    
	
Section 7.09
    	
Successor Trustee by Merger
    	
37
    
	
Section 7.10
    	
Eligibility; Disqualification
    	
37
    
	
Section 7.11
    	
Preferential Collection of   Claims Against Company
    	
38
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
    	
38
    
	
Section 8.01
    	
Option to Effect Legal   Defeasance or Covenant Defeasance
    	
38
    
	
Section 8.02
    	
Legal Defeasance and Discharge
    	
38
    
	
Section 8.03
    	
Covenant Defeasance
    	
39
    
	
Section 8.04
    	
Conditions to Legal or Covenant   Defeasance
    	
39
    
	
Section 8.05
    	
Deposited Cash and Government   Securities to be Held in Trust; Other Miscellaneous Provisions
    	
40
    
	
Section 8.06
    	
Repayment to Company
    	
41
    
	
Section 8.07
    	
Reinstatement
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE IX. AMENDMENTS
    	
41
    
	
Section 9.01
    	
Without Consent of Holders
    	
41
    
	
Section 9.02
    	
With Consent of Holders
    	
43
    
	
Section 9.03
    	
Compliance with Trust Indenture   Act
    	
44
    
	
Section 9.04
    	
Revocation and Effect of   Consents and Waivers
    	
44
    
	
Section 9.05
    	
Notation on or Exchange of   Securities
    	
45
    
	
Section 9.06
    	
Trustee To Sign Amendments
    	
45
    

 

ii

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE X. SATISFACTION AND DISCHARGE
    	
45
    
	
Section 10.01
    	
Satisfaction and Discharge
    	
45
    
	
Section 10.02
    	
Application of Trust Money
    	
47
    
	
 
    	
 
    	
 
    
	
ARTICLE XI. MISCELLANEOUS
    	
47
    
	
Section 11.01
    	
Trust Indenture Act Controls
    	
47
    
	
Section 11.02
    	
Notices
    	
47
    
	
Section 11.03
    	
Communication by Holders with   other Holders
    	
48
    
	
Section 11.04
    	
Certificate and Opinion as to   Conditions Precedent
    	
48
    
	
Section 11.05
    	
Statements Required in   Certificate or Opinion
    	
49
    
	
Section 11.06
    	
When Securities Disregarded
    	
49
    
	
Section 11.07
    	
Rules by Trustee, Paying   Agent and Registrar
    	
49
    
	
Section 11.08
    	
Legal Holidays
    	
49
    
	
Section 11.09
    	
Governing Law; Waiver of Jury   Trial
    	
50
    
	
Section 11.10
    	
No Recourse Against Others
    	
50
    
	
Section 11.11
    	
Successors
    	
50
    
	
Section 11.12
    	
Multiple Originals
    	
50
    
	
Section 11.13
    	
Severability
    	
50
    
	
Section 11.14
    	
No Adverse Interpretation of   Other Agreements
    	
50
    
	
Section 11.15
    	
Table of Contents; Headings
    	
50
    
	
Section 11.16
    	
Force Majeure
    	
50
    
	
Section 11.17
    	
USA PATRIOT ACT
    	
51
    

 

iii

 

CROSS-REFERENCE TABLE

 

	
 
    	
TIA Section
    	
 
    	
Indenture Section
    	
 
    
	
 
    	
310
    	
 
    	
(a)
    	
 
    	
7.10
    	
 
    
	
 
    	
 
    	
 
    	
(b)
    	
 
    	
7.08; 7.10
    	
 
    
	
 
    	
 
    	
 
    	
(c)
    	
 
    	
N.A.
    	
 
    
	
 
    	
311
    	
 
    	
(a)
    	
 
    	
7.11
    	
 
    
	
 
    	
 
    	
 
    	
(b)
    	
 
    	
7.11
    	
 
    
	
 
    	
 
    	
 
    	
(c)
    	
 
    	
N.A.
    	
 
    
	
 
    	
312
    	
 
    	
(a)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(b)
    	
 
    	
12.03
    	
 
    
	
 
    	
 
    	
 
    	
(c)
    	
 
    	
12.03
    	
 
    
	
 
    	
313
    	
 
    	
(a)
    	
 
    	
7.06
    	
 
    
	
 
    	
 
    	
 
    	
(b)
    	
 
    	
7.06
    	
 
    
	
 
    	
 
    	
 
    	
(c)
    	
 
    	
7.06
    	
 
    
	
 
    	
 
    	
 
    	
(d)
    	
 
    	
N.A.
    	
 
    
	
 
    	
314
    	
 
    	
(a)
    	
 
    	
3.02; 3.05
    	
 
    
	
 
    	
 
    	
 
    	
(b)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(c)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(d)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(e)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(f)
    	
 
    	
N.A.
    	
 
    
	
 
    	
315
    	
 
    	
(a)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(b)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(c)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(d)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(e)
    	
 
    	
N.A.
    	
 
    
	
 
    	
316
    	
 
    	
(a) (last sentence)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(a)(1)(A)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(a)(1)(B)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(a)(2)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(b)
    	
 
    	
N.A.
    	
 
    
	
 
    	
317
    	
 
    	
(a)(1)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(a)(2)
    	
 
    	
N.A.
    	
 
    
	
 
    	
 
    	
 
    	
(b)
    	
 
    	
N.A.
    	
 
    
	
 
    	
318
    	
 
    	
(a)
    	
 
    	
N.A
    	
 
    

 

N.A. Means Not Applicable.

Note:  This Cross-Reference Table shall not, for any purposes, be deemed to be part of this Indenture.

 

iv

 

SENIOR INDENTURE

 

THIS SENIOR INDENTURE, dated as of March [·], 2015, is entered into by and between Fossil Group, Inc., a Delaware corporation (the “Company”), and Wells Fargo Bank, N.A., a national banking association organized under the laws of the United States, as trustee (the “Trustee”).

 

W I T N E S S E T H :

 

WHEREAS, the Company may from time to time duly authorize the issue of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (the “Securities”) up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture;

 

WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to provide, among other things, for the authentication, delivery and administration of the Securities; and

 

WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done;

 

NOW, THEREFORE, in consideration of the premises and the purchases of the Securities by the holders thereof, the Company and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Securities as follows:

 

ARTICLE I.
 DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01                             Definitions.

 

“Additional Amounts” means any additional amounts required by the express terms of a Security or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto, to be paid by the Company with respect to certain taxes, assessments or other governmental charges imposed on certain Holders and that are owing to those Holders.

 

“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 purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.  For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

 

“Agent” means any Registrar, Paying Agent, co-registrar or transfer agent.

 

“Bankruptcy Law” means Title 11, United States Code or any similar Federal or state law for the relief of debtors.

 

1

 

“Board of Directors” means:

 

(1)                                 with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

 

(2)                                 with respect to a partnership, the board of directors of the general partner of the partnership;

 

(3)                                 with respect to a limited liability company, the manager, managers, managing member or members or any controlling committee of managers or managing members thereof, as the case may be; and

 

(4)                                 with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Board Resolution” means a copy of a resolution certified by a Vice President, the Secretary or an Assistant Secretary of the applicable Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which Federal or State banking institutions in the Borough of Manhattan, the City of New York, or in the city where the office or agency for payment on the Securities of the applicable series is maintained, are authorized or obligated by law, executive order or regulation to close.

 

“Capital Stock” means:

 

(1)                                 in the case of a corporation, corporate stock;

 

(2)                                 in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)                                 in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

 

(4)                                 any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person,

 

but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Company” has the meaning ascribed to it in the first introductory paragraph of this Indenture.

 

2

 

“Company Order” and “Company Request” mean, respectively, a written order or request signed in the name of the Company by two Officers of the Company, and delivered to the Trustee.

 

“Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

 

“Depositary” means, with respect to the Securities of any series issuable or issued in whole or in part in global form, the Person specified pursuant to Section 2.01 hereof as the initial Depositary with respect to the Securities of that series, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and thereafter “Depositary” shall mean or include that successor.

 

“Dollar” or “$” 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 debt.

 

“DTC” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depositary institution hereinafter appointed by the Company.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States.

 

“Global Securities” of any series means a Security of that series that is issued in global form in the name of the Depositary with respect thereto or its nominee.

 

“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which obligations or guarantee the full faith and credit of the United States of America is pledged.

 

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to maintain financial statement conditions or otherwise), or 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).

 

“Holder” means a Person in whose name a Security is registered in the applicable Securities Register.

 

3

 

“Indenture” means this Senior Indenture as amended or supplemented from time to time by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.  The term “Indenture” shall also include the terms of any particular series of Securities established as contemplated by Section 2.01.

 

“Interest Payment Date,” when used with respect to any Security, shall have the meaning assigned to that term in the Security as contemplated by Section 2.01.

 

“Maturity” means, with respect to any Security, the date on which the principal of that Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity thereof, or by declaration of acceleration, call for redemption or otherwise.

 

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any indebtedness.

 

“Officer” means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, any Executive Vice President, Senior Vice President, or Vice President, the Treasurer, any comptroller, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company.

 

“Officers’ Certificate” means a certificate signed by two Officers, at least one of whom shall be the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, or the comptroller, that meets the requirements of Section 11.04 and Section 11.05.

 

“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee that meets the requirements of Section 11.04 and Section 11.05.  The counsel may be an employee of or in-house counsel to the Company.

 

“Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable on a declaration of acceleration of the Maturity thereof pursuant to Section 6.02.

 

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

 

“Redemption Date” when used with respect to any Security to be redeemed, in whole or in part, means the date fixed for such redemption by or pursuant to this Indenture.

 

“Redemption Price” means, with respect to any Security to be redeemed, the price at which it is to be redeemed pursuant to this Indenture and the terms of such Security.

 

“SEC” means the Securities and Exchange Commission.

 

4

 

“Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Securities Register” means the register of Securities, maintained by the Registrar, pursuant to Section 2.05.

 

“Security Custodian” means, with respect to Securities of a series issued in global form, the Trustee for Securities of that series, as custodian with respect to the Securities of that series, or any successor entity thereto.

 

“Significant Subsidiary” means any Subsidiary, which, at the time of determination, would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act as such Regulation is in effect on the date of this Indenture.

 

“Stated Maturity” means, with respect to any installment of interest or principal on any series of indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

 

“Subsidiary” of any specified Person means any Person of which more than 50% of the outstanding Voting Stock is owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person.

 

“TIA” or “Trust Indenture Act,” except as otherwise provided in Section 9.03, means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa through 77bbbb), as in effect on the date hereof.

 

“Trust Officer” shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

 

“Trustee” means the Person named in the first introductory paragraph of this Indenture until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter “Trustee” means each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series means the Trustee with respect to Securities of that series.

 

“United States Alien” means any Person who, for United States Federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States Federal income tax purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust.

 

5

 

“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

Section 1.02                             Other Definitions.

 

	
 
    	
Term
    	
 
    	
Defined in Section
    	
 
    
	
 
    	
“Agent Members”
    	
 
    	
Section 2.16
    	
 
    
	
 
    	
“Corporate Trust Office”
    	
 
    	
Section 3.03
    	
 
    
	
 
    	
“Covenant Defeasance”
    	
 
    	
Section 8.03
    	
 
    
	
 
    	
“Defaulted Interest”
    	
 
    	
Section 2.12
    	
 
    
	
 
    	
“Event of Default”
    	
 
    	
Section 6.01
    	
 
    
	
 
    	
“Exchange Rate”
    	
 
    	
Section 2.18
    	
 
    
	
 
    	
“Legal Defeasance”
    	
 
    	
Section 8.02
    	
 
    
	
 
    	
“Legal Holiday”
    	
 
    	
Section 11.08
    	
 
    
	
 
    	
“Patriot Act”
    	
 
    	
Section 11.17
    	
 
    
	
 
    	
“Paying Agent”
    	
 
    	
Section 2.05
    	
 
    
	
 
    	
“protected purchaser”
    	
 
    	
Section 2.09
    	
 
    
	
 
    	
“Registrar”
    	
 
    	
Section 2.05
    	
 
    
	
 
    	
“Special Interest Payment   Date”
    	
 
    	
Section 2.12(a)
    	
 
    
	
 
    	
“Special Record Date”
    	
 
    	
Section 2.12(a)
    	
 
    
	
 
    	
“Surviving Entity”
    	
 
    	
Section 4.01(a)
    	
 
    

 

Section 1.03                             Incorporation by Reference of Trust Indenture Act.  This Indenture is subject to the mandatory provisions of the TIA which are incorporated by reference in and made a part of this Indenture.  The following TIA terms have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities.

 

“indenture security holder” means a Holder of a Security.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means the Trustee.

 

“obligor” on any series of Securities means the Company and any other obligor on such series of Securities.

 

All other TIA terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rules promulgated under the TIA have the meanings assigned to them by such definitions.

 

Section 1.04                             Rules of Construction.  Unless the context otherwise requires:

 

(a)                                 a term has the meaning assigned to it;

 

6

 

(b)                                 an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)                                  “or” is not exclusive;

 

(d)                                 “including” means including without limitation;

 

(e)                                  words in the singular include the plural and words in the plural include the singular;

 

(f)                                   the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the Company dated such date prepared in accordance with GAAP; and

 

(g)                                  provisions apply to successive events and transactions.

 

ARTICLE II.
 THE SECURITIES

 

Section 2.01                             Form, Dating and Terms.  The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.

 

The Securities may be issued in one or more series.  There shall be established in or pursuant to a Board Resolution, and set forth, or determined in the manner provided, in an Officers’ Certificate of the Company or in a Company Order, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series:

 

(a)                                 the title of the Securities of the series (which shall distinguish the Securities of the series from the Securities of all other series);

 

(b)                                 if there is to be a limit, the limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, Section 2.09, Section 2.13, Section 2.16, Section 5.07 or Section 9.05 and except for any Securities that, pursuant to Section 2.04 or Section 2.16, are deemed never to have been authenticated and delivered hereunder); provided, however, that unless otherwise provided in the terms of the series, the authorized aggregate principal amount of such series may be increased before or after the issuance of any Securities of the series by a Board Resolution (or action pursuant to a Board Resolution) to such effect;

 

(c)                                  whether any Securities of the series are to be issuable initially in temporary global form and whether any Securities of the series are to be issuable in permanent global form, as Global Securities or otherwise, and, if so, whether beneficial owners of interests in any such Global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 2.16, and the initial Depositary and Security Custodian, if any, for any Global Security or Securities of such series;

 

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(d)                                 the manner in which any interest payable on a temporary Global Security on any Interest Payment Date will be paid if other than in the manner provided in Section 2.12;

 

(e)                                  the date or dates on which the principal of and premium (if any) on the Securities of the series is payable or the method of determination thereof;

 

(f)                                   the rate or rates, or the method of determination thereof, at which the Securities of the series shall bear interest, if any, whether and under what circumstances Additional Amounts with respect to such Securities shall be payable, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the record date for the interest payable on any Securities on any Interest Payment Date, or if other than provided herein, the Person to whom any interest on Securities of the series shall be payable;

 

(g)                                  the place or places where, subject to the provisions of Section 3.03, the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable;

 

(h)                                 the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, if the Company is to have that option, including the redemption or repurchase price or prices, and the manner in which the Company must exercise any such option, if different from those set forth herein;

 

(i)                                     the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid in whole or in part pursuant to such obligation;

 

(j)                                    if other than denominations of $2,000 and any integral multiple of $1,000 in excess thereof, the denomination in which any Securities of that series shall be issuable;

 

(k)                                 if other than Dollars, the currency or currencies (including composite currencies) or the form, including equity securities, other debt securities (including Securities), warrants or any other securities or property of the Company or any other Person, in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable;

 

(l)                                     if the principal of, premium (if any) or interest on or any Additional Amounts with respect to the Securities of the series are to be payable, at the election of the Company or a Holder thereof, in a currency or currencies (including composite currencies) other than that in which the Securities are stated to be payable, the currency or currencies (including composite currencies) in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to Securities of such series as to which such election is made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made;

 

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(m)                             if the amount of payments of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series may be determined with reference to any commodities, currencies or indices, values, rates or prices or any other index or formula, the manner in which such amounts shall be determined;

 

(n)                                 if other than the entire principal amount thereof, the portion of the principal amount of Securities of the series that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.02;

 

(o)                                 any additional means of satisfaction and discharge of this Indenture and any additional conditions or limitations to discharge with respect to Securities of the series pursuant to Article VIII or Article X or any modifications of or deletions from such conditions or limitations;

 

(p)                                 any deletions or modifications of or additions to the covenants of the Company set forth in Article III pertaining to the Securities of the series;

 

(q)                                 any deletions or modifications of or additions to the Events of Default set forth in Section 6.01 pertaining to the Securities of the series;

 

(r)                                    any deletions or modifications of or additions to the provisions of Section 6.02 through Section 6.11 pertaining to the Securities of the series;

 

(s)                                   any Depositaries, interest rate calculation agents, exchange rate calculation agents or other agents pertaining to the Securities of the series;

 

(t)                                    the terms and conditions, if any, upon which the Securities of the series shall be subordinated in right of payment to any other indebtedness of the Company;

 

(u)                                 any restrictions or other provisions with respect to the transfer or exchange of Securities of the series, which may amend, supplement, modify or supersede those contained in this Article II;

 

(v)                                 if the Securities of the series are to be convertible into or exchangeable for other debt securities (including Securities) or any other securities or property of the Company or any other Person, at the option of the Company or the Holder or upon the occurrence of any condition or event, the terms and conditions for such conversion or exchange;

 

(w)                               if applicable, that the Securities of the series, in whole or any specified part, shall not be defeasible pursuant to Section 8.02 or Section 8.03 or both such Sections, and, if such Securities may be defeased, in whole or in part, pursuant to either or both such Sections, any provisions to permit a pledge of obligations other than Government Securities (or the establishment of other arrangements) to satisfy the requirements of Section 8.04(a) for defeasance of such Securities and, if other than by a Board Resolution of the Company, the manner in which any election by the Company to defease such Securities shall be evidenced;

 

(x)                                 the priority and kind of any lien securing the Securities of the series and a brief identification of the properties subject to such lien;

 

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(y)                                 any trustees, authenticating agents, Paying Agents, Registrars or other agents pertaining to the Securities of the series; and

 

(z)                                  any other terms of the Securities of the series (which terms shall not be prohibited by the provisions of this Indenture).

 

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 2.03) set forth, or determined in the manner provided, in the Officers’ Certificate or Company Order referred to above or in any such indenture supplemental hereto. All Securities of any one series need not be issued at the same time, and a series may be reopened, without the consent of the Holders, for issuances of additional Securities of that series except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 2.03) set forth, or determined in the manner provided, in the Officers’ Certificate or Company Order referred to above or in any such indenture supplemental hereto.

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action, together with such Board Resolution, shall be set forth in an Officers’ Certificate or certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate or Company Order setting forth the terms of the series.

 

Section 2.02                             Denominations.  The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01.  In the absence of any such provisions with respect to the Securities of any series, the Securities of such series denominated in Dollars shall be issuable in denominations of $2,000 and any integral multiple of $1,000 in excess thereof.

 

Section 2.03                             Forms Generally.  The Securities of each series shall be in fully registered form and in substantially such form or forms (including temporary or permanent global form) established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto.  The Securities may have notations, legends or endorsements required by law, securities exchange rules, the Company’s certificate of incorporation, bylaws or other similar governing documents, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  A copy of the Board Resolution establishing the form or forms of Securities of any series shall be delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 2.04 for the authentication and delivery of such Securities.

 

The definitive Securities of each series shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing such Securities, as evidenced by their execution thereof.

 

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The Trustee’s certificate of authentication shall be in substantially the following form:

 

“This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

 

	
 
    	
Wells Fargo Bank, N.A., as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory”
    

 

Section 2.04                             Execution, Authentication, Delivery and Dating.  Two Officers of the Company shall sign the Securities on behalf of the Company by manual or facsimile signature (or other electronic means).

 

If an Officer of the Company whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.

 

A Security shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of an authorized signatory of the Trustee, which signature shall be conclusive evidence that the Security has been authenticated under this Indenture.  Notwithstanding the foregoing, if any Security has been authenticated and delivered hereunder but never issued and sold by the Company, and the Company delivers such Security to the Trustee for cancellation as provided in Section 2.11, together with a written statement (which need not comply with Section 11.05 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, and the Trustee shall authenticate and deliver such Securities for original issue upon a Company Order for the authentication and delivery of such Securities or pursuant to such procedures acceptable to the Trustee as may be specified from time to time by Company Order.  Such order shall specify the amount of the Securities to be authenticated, the date on which the original issue of Securities is to be authenticated, the name or names of the initial Holder or Holders and any other terms of the Securities of such series not otherwise determined.  If provided for in such procedures, such Company Order may authorize (1) authentication and delivery of Securities of such series for original issue from time to time, with certain terms (including, without limitation, the Maturity dates or dates, original issue date or dates and interest rate or rates) that differ from Security to Security and (2) authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent, which instructions shall be promptly confirmed in writing.

 

If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions as permitted by Section 2.01, in authenticating such Securities,

 

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and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall receive (in addition to the Company Order referred to above and the other documents required by Section 11.04) and (subject to Section 7.01) shall be fully protected in conclusively relying upon:

 

(a)                                 an Officers’ Certificate of the Company setting forth the Board Resolution and, if applicable, an appropriate record of any action taken pursuant thereto, as contemplated by the last paragraph of Section 2.01; and

 

(b)                                 an Opinion of Counsel to the effect that:

 

(i)                                     the form of such Securities has been established in conformity with the provisions of this Indenture;

 

(ii)                                  the terms of such Securities have been established in conformity with the provisions of this Indenture; and

 

(iii)                               such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer or other similar laws in effect from time to time affecting the rights of creditors generally, and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

If all the Securities of any series are not to be issued at one time, it shall not be necessary to deliver an Officers’ Certificate and Opinion of Counsel at the time of issuance of each such Security, but such Officers’ Certificate and Opinion of Counsel shall be delivered at or before the time of issuance of the first Security of the series to be issued.

 

The Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to this Indenture would affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner not reasonably acceptable to the Trustee.

 

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities.  Unless limited by the terms of such appointment, any such 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.  An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.

 

Each Security shall be dated the date of its authentication.

 

Section 2.05                             Registrar and Paying Agent.  The Company shall maintain an office or agency for each series of Securities where Securities of such series may be presented for

 

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registration of transfer or for exchange (the “Registrar”) and an office or agency where Securities of such series may be presented for payment (the “Paying Agent”).  The Company shall cause each of the Registrar and the Paying Agent to maintain an office or agency in the United States of America.  The Registrar shall keep a register of the Securities and of their transfer and exchange (the “Securities Register”).  The Company may have one or more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any additional paying agent.

 

The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the name and address of each such agent.  If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07.  The Company or any of its Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.

 

The Company initially appoints the Trustee as Registrar and Paying Agent for the Securities.

 

Section 2.06                             Paying Agent to Hold Money in Trust.  By no later than 11:00 a.m. (New York City time) on the date on which any amount or Additional Amounts, if any, in respect of any Security is due and payable, the Company shall deposit with the Paying Agent a sum sufficient in immediately available funds to pay such amount or Additional Amounts, if any, when due.  The Company shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of the applicable Holders or the Trustee all money held by such Paying Agent for the payment of such amount and Additional Amounts, if any, on the applicable Securities and shall notify the Trustee in writing of any default by the Company in making any such payment.  If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund.  The Company at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent.  Upon complying with this Section 2.06, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money delivered to the Trustee.  Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Securities.

 

Section 2.07                             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.  If the Trustee is not the Registrar with respect to a series of Securities, or to the extent otherwise required under the TIA, the Company shall furnish to the Trustee, in writing at least five Business Days before each interest payment date with respect to such series of Securities 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 of such series.

 

Section 2.08                             Transfer and Exchange.  Except as set forth in Section 2.16 or as may be provided pursuant to Section 2.01, when Securities of any series are presented to the Registrar with the request to register the transfer of those Securities or to exchange those Securities for an

 

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equal principal amount of Securities of the same series of like tenor and of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements and the requirements of this Indenture for those transactions are met; provided, however, that the Securities presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form reasonably satisfactory to the Registrar duly executed by the Holder thereof or by his attorney, duly authorized in writing, on which instruction the Registrar can rely.

 

To permit registrations of transfers and exchanges, the Company shall execute Securities and the Trustee shall authenticate such Securities at the Registrar’s written request and submission of the Securities (other than Global Securities).  No service charge shall be made to a Holder for any registration of transfer or exchange (except as otherwise expressly permitted herein), 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 such transfer tax or similar governmental charge payable on exchanges pursuant to Section 2.13, Section 5.07 or Section 9.05).  The Trustee shall authenticate Securities in accordance with the provisions of Section 2.04.  Notwithstanding any other provisions of this Indenture to the contrary, the Company shall not be required to register the transfer or exchange of (a) any Security selected for redemption in whole or in part pursuant to Article V, except the unredeemed portion of any Security being redeemed in part or (b) any Security during the period beginning 15 days before the mailing of notice of any offer to repurchase Securities of the series required pursuant to the terms thereof or of redemption of Securities of a series to be redeemed and ending at the close of business on the date of mailing.

 

Section 2.09                             Mutilated, Destroyed, Lost or Wrongfully Taken Securities.  If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security with respect to such series if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) satisfies the Company or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Company or Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”), and (c) satisfies any other reasonable requirements of the Trustee.  Such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Security is replaced, and, in the absence of notice to the Company or the Trustee that such Security has been acquired by a protected purchaser, the Company shall execute and, upon a Company Order, the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or wrongfully taken Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.

 

In case any such mutilated, destroyed, lost or wrongfully taken Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security of such series, pay such Security.

 

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Upon the issuance of any new Security under this Section 2.09, 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) in connection therewith.

 

Every new Security issued pursuant to this Section 2.09 in lieu of any mutilated, destroyed, lost or wrongfully taken Security shall constitute an original additional contractual obligation of the Company and any other obligor upon the Securities of such series, whether or not the mutilated, destroyed, lost or wrongfully taken Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities of such series duly issued hereunder.

 

The provisions of this Section 2.09 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 wrongfully taken Securities.

 

Section 2.10                             Outstanding Securities.  Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those paid pursuant to Section 2.09 and those described in this Section 2.10 as not outstanding.  A Security ceases to be outstanding in the event the Company or a Subsidiary of the Company holds the Security; provided, however, that (i) for purposes of determining which Securities are outstanding for consent or voting purposes hereunder, the provisions of Section 11.06 shall apply and (ii) in determining whether the Trustee shall be protected in making a determination 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, or relying upon any such quorum, consent or vote, only Securities which a Trust Officer of the Trustee actually knows to be held by the Company or an Affiliate of the Company shall not be considered outstanding.

 

If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a protected purchaser.

 

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a Redemption Date, repurchase date or maturity date money sufficient to pay all amounts and Additional Amounts, if any, payable on that date with respect to the Securities (or portions thereof) to be redeemed, repurchased or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

 

Section 2.11                             Cancellation.  The Company at any time may deliver Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or cancellation and dispose of such Securities in accordance with its internal policies.  The

 

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Company may not issue new Securities to replace Securities it has paid or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange.

 

Section 2.12                             Payment of Interest; Defaulted Interest.  Unless otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, interest and Additional Amounts, if any, on any Security of such series 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 such Security (or one or more predecessor Securities) is registered at the close of business on the regular record date for such interest at the office or agency of the Company maintained for such purpose pursuant to Section 2.05.

 

Unless otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, any interest and Additional Amounts, if any, on any Security of such series which is payable, but is not paid when the same becomes due and payable and such nonpayment continues for a period of 30 days shall forthwith cease to be payable to the Holder on the regular record date, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate provided for in the Securities therefor (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) shall be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

 

(a)                                 The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date (not less than 30 days after such notice) of the proposed payment (the “Special Interest Payment Date”), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a record date (the “Special Record Date”) for the payment of such Defaulted Interest, which date shall be not more than 15 days and not less than 10 days prior to the Special Interest Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company of such Special Record Date, and in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for in Section 11.02, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

 

(b)                                 The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after

 

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notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

Subject to the foregoing provisions of this Section 2.12, each Security delivered under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest and Additional Amounts, if any, each as accrued and unpaid, and to accrue, which were carried by such other Security.

 

Section 2.13                             Temporary Securities.  Until definitive Securities of any series are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities of such series.  Temporary Securities shall be substantially in the form of definitive Securities, but may have variations that the Company considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities.  Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.

 

Section 2.14                             Persons Deemed Owners.  The Company, the Trustee, any Agent and any authenticating agent may treat the Person in whose name any Security is registered as the owner of that Security for the purpose of receiving payments of principal of, premium (if any) or interest on, or any Additional Amounts with respect to, that Security and for all other purposes.  None of the Company, the Trustee, any Agent or any authenticating agent shall be affected by any notice to the contrary.

 

Section 2.15                             Computation of Interest.  Except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 2.16                             Global Securities; Book-Entry Provisions.  If Securities of a series are issuable in global form as a Global Security, as contemplated by Section 2.01, then, notwithstanding Section 2.01(j) and the provisions of Section 2.02, any such Global Security shall represent those of the outstanding Securities of that series as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding Securities of that series from time to time endorsed thereon and that the aggregate amount of outstanding Securities of that series represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, transfers or redemptions.  Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, of outstanding Securities of that series represented thereby shall be made by the Trustee (i) in such manner and upon instructions given by such Person or Persons as shall be specified in that Security or in a Company Order to be delivered to the Trustee pursuant to Section 2.04 or (ii) otherwise in accordance with written instructions or such other written form of instructions as is customary for the Depositary for that Security, from that Depositary or its nominee on behalf of any Person having a beneficial interest in that Global Security.  Subject to the provisions of Section 2.04 and, if applicable, Section 2.13, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified in that Security or in the applicable Company Order.  With respect to the Securities of any series that are represented by a Global Security, the Company authorizes the execution and delivery by the Trustee of a letter of representations or other similar agreement or instrument in the form customarily provided for by

 

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the Depositary appointed with respect to that Global Security.  Any Global Security may be deposited with the Depositary or its nominee, or may remain in the custody of the Trustee or the Security Custodian therefor pursuant to a FAST Balance Certificate Agreement or similar agreement between the Trustee and the Depositary.  If a Company Order has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 11.05 and need not be accompanied by an Opinion of Counsel.

 

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 or the Security Custodian as its custodian, or under that Global Security, and the Depositary may be treated by the Company, the Trustee or the Security Custodian and any agent of the Company, the Trustee or the Security Custodian as the absolute owner of that Global Security for all purposes whatsoever.  Notwithstanding the foregoing, (i) the registered holder of a Global Security of any series may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder of Securities of that series is entitled to take under this Indenture or the Securities of that series and (ii) nothing herein shall prevent the Company, the Trustee or the Security Custodian or any agent of the Company, the Trustee, or the Security Custodian from giving effect to any written certification, proxy or other authorization furnished by the Depositary or shall impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a beneficial owner of any Security.

 

Notwithstanding Section 2.08, and except as otherwise provided pursuant to Section 2.01, transfers of a Global Security shall be limited to transfers of that Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees.  Interests of beneficial owners in a Global Security may be transferred in accordance with the rules and procedures of the Depositary.  Securities of any series shall be transferred to all beneficial owners of a Global Security of that series in exchange for their beneficial interests in that Global Security if, and only if, either (1) the Depositary notifies the Company that it is unwilling or unable to continue as depositary for such Global Security or the Depositary ceases to be a clearing agency registered under the Exchange Act, at a time when the Depositary is required to be so registered in order to act as depositary, and, in either case, a successor depositary is not appointed by the Company within 90 days of such notice, (2) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of definitive Securities or (3) a Default or Event of Default has occurred and is continuing with respect to the Securities and the Trustee shall have so requested.

 

In connection with any transfer of a portion of the beneficial interests in a Global Security to beneficial owners pursuant to this Section 2.16, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee on receipt of a Company Order for the authentication and delivery of Securities shall authenticate and deliver, one or more Securities of the same series of like tenor and amount.

 

In connection with the transfer of all the beneficial interests in a Global Security of any series to beneficial owners pursuant to this Section 2.16, the Global Security shall be deemed to

 

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be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the Global Security, an equal aggregate principal amount of Securities of that series of authorized denominations.

 

None of the Company, the Trustee, the Paying Agent or the Registrar will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, Securities by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to those Securities, or for any other actions taken or not taken by the Depositary.  None of the Company, the Trustee, the Paying Agent or the Registrar shall be liable for any delay by the related Global Security Holder or the Depositary in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from that Global Security Holder or the Depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Securities to be issued).

 

The provisions of the last sentence of the third paragraph of Section 2.04 shall apply to any Global Security if that Global Security was never issued and sold by the Company and the Company delivers to the Trustee the Global Security together with written instructions (which need not comply with Section 11.05 and need not be accompanied by an Opinion of Counsel) with regard to the cancellation or reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of the third paragraph of Section 2.04.

 

Notwithstanding the provisions of Section 2.03 and Section 2.12, unless otherwise specified as contemplated by Section 2.01 with respect to Securities of any series, payment of principal of and premium (if any) and interest on and any Additional Amounts with respect to any Global Security shall be made to the Person or Persons specified therein.

 

Section 2.17                             CUSIP Numbers, Etc.  The Company in issuing the Securities of any series may use CUSIP, ISIN and Common Code numbers (if then generally in use) and, if so, the Trustee shall use CUSIP, ISIN and Common Code numbers in notices of redemption as a convenience to Holders of Securities of such series; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities of such series or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities of such series, and any such redemption shall not be affected by any defect in or omission of such numbers.  The Company shall promptly notify the Trustee in writing of any change in the CUSIP, ISIN and Common Code numbers.

 

Section 2.18                             Original Issue Discount and Foreign-Currency Denominated Securities.  In determining whether the Holders of the required principal amount of outstanding Securities have concurred in any direction, amendment, supplement, waiver or consent, unless otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, (a) the principal amount of an Original Issue Discount Security of such series shall be the principal amount thereof that would be due and payable as of the date of that determination upon acceleration of the Maturity thereof pursuant to Section 6.02, and (b) the principal amount of a

 

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Security of such series denominated in a foreign currency shall be the Dollar equivalent, as determined by the Company by reference to the noon buying rate in The City of New York for cable transfers for that currency, as that rate is certified for customs purposes by the Federal Reserve Bank of New York (the “Exchange Rate”) on the date of original issuance of that Security, of the principal amount (or, in the case of an Original Issue Discount Security, the Dollar equivalent, as determined by the Company by reference to the Exchange Rate on the date of original issuance of that Security, of the amount determined as provided in (a) above), of that Security.

 

ARTICLE III.
 COVENANTS

 

Section 3.01                             Payment of Securities.  The Company shall promptly pay the principal of, premium, if any, on, and interest and Additional Amounts, if any, on the Securities on the dates and in the manner provided in the Securities and in this Indenture.  Principal, premium, if any, interest and Additional Amounts, if any, shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture immediately available funds sufficient to pay all principal, premium and interest and Additional Amounts, if any, then due and the Trustee or Paying Agent, as the case may be, is not prohibited from paying money to the Holders on that date pursuant to the terms of this Indenture.

 

The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

 

Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments hereunder.

 

Section 3.02                             Reports.  So long as the Securities of any series are outstanding, the Company shall:

 

(a)                                 so long as the Company is subject to the requirements of Section 13 or Section 15(d) of the Exchange Act, within the time periods specified by the Exchange Act, file such annual and quarterly reports and such information, documents and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to such Sections; provided, however, that the Company shall not be so obligated to file such information, documents and reports with the SEC if the SEC does not permit such filings;

 

(b)                                 furnish to the Trustee, within 15 days after the Company files the same 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 from time to time by rules and regulations prescribe) which the Company files with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act; provided, however, that any such information, document or report filed with the SEC pursuant to its Electronic Data Gathering, Analysis and Retrieval (or EDGAR) system or any successor thereto shall be deemed to be filed with the Trustee; provided, however, that the Trustee shall have no responsibility whatsoever to determine whether such

 

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filing has occurred.  Delivery of such 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 their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates); and

 

(c)                                  comply with the other provisions of TIA § 314(a).

 

Section 3.03                             Maintenance of Office or Agency.  The Company will maintain in the United States of America an office or agency for any series of Securities where such Securities may be presented or surrendered for payment, where, if applicable, the Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served.  The principal corporate trust office of the Trustee at the address of the Trustee specified in Section 11.02 hereof (the “Corporate Trust Office”) shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes.  The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

 

The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the United States of America for such purposes.  The Company will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

 

Section 3.04                             Corporate Existence.  Subject to Article IV, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

 

Section 3.05                             Compliance Certificate.  The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers’ Certificate, one of the signatories of which shall be the principal executive officer, the principal financial officer or principal accounting officer of the Company, 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 Default or Event of Default and whether or not the signers know of any Default or Event of Default that occurred during such period.  If they do, the certificate shall describe the Default or Event of Default, its status and what action the Company is taking or proposes to take with respect thereto.  The Company also shall comply with TIA § 314(a)(4).

 

Section 3.06                             Statement by Officers as to Default.  So long as Securities of any series are outstanding, the Company shall deliver to the Trustee, within 30 days after the Company

 

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becomes aware of the occurrence of any Event of Default or Default with respect to that series, an Officers’ Certificate setting forth the details of such Event of Default or Default and the action that the Company is taking or proposes to take in respect thereof.

 

Section 3.07                             Additional Amounts.  If the Securities of a series expressly provide for the payment of Additional Amounts, and only in such circumstance, the Company will pay to the Holder of any Security of that series Additional Amounts as expressly provided therein.  Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or the net proceeds received from the sale or exchange of any Security of any series, that mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section 3.07 to the extent that, in that context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section 3.07, and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where that express mention is not made.

 

Unless otherwise provided pursuant to Section 2.01 with respect to Securities of any series, if the Securities of a series provide for the payment of Additional Amounts, at least ten days prior to the first Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to Maturity, the first day on which a payment of principal and any premium is made), and at least ten days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers’ Certificate, the Company shall furnish the Trustee and the Company’s principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers’ Certificate instructing the Trustee and such Paying Agent or Paying Agents whether that payment of principal of and any premium or interest on the Securities of that series shall be made to Holders of Securities of that series who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series.  If any such withholding shall be required, then that Officers’ Certificate shall specify by country the amount, if any, required to be withheld on those payments to those Holders of Securities, and the Company will pay to that Paying Agent the Additional Amounts required by this Section 3.07.  The Company covenants to indemnify the Trustee and any Paying Agent for and to hold them harmless against any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers’ Certificate furnished pursuant to this Section 3.07.

 

Section 3.08                             Calculation of Original Issue Discount.  If the Securities are issued with original issue discount, the Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on Outstanding Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Code.

 

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ARTICLE IV.
 SUCCESSORS

 

Section 4.01                             Consolidation, Merger or Sale of Assets.  The Company shall not, in a single transaction or through a series of related transactions consolidate with or merge with or into any other Person or sell, assign (excluding any assignment solely as collateral for security purposes under a credit facility but not any outright assignment upon the foreclosure on any such collateral), transfer, lease or otherwise dispose of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person, unless:

 

(a)                                 the Company shall be the successor or continuing Person or, if the Company is not the successor or continuing Person, the resulting, surviving or transferee Person (the “Surviving Entity”) is a corporation organized and existing under the laws of the United States, any State thereof or the District of Columbia that expressly assumes all of the Company’s obligations under the Securities and this Indenture pursuant to a supplement hereto executed and delivered to the Trustee;

 

(b)                                 immediately after giving effect to such transaction or series of related transactions, no Event of Default or Default has occurred and is continuing; and

 

(c)                                  the Company or any such Surviving Entity shall have delivered to the Trustee an Officers’ Certificate and Opinion of Counsel stating that the transaction or series of related transactions and any supplement hereto complies with the terms of this Indenture.

 

If any consolidation or merger or any sale, assignment, conveyance, lease, transfer or other disposition of all or substantially all of its assets occurs in accordance with the terms hereof, the Surviving Entity shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture with the same effect as if such Surviving Entity had been named as the Company.  The Company shall (except in the case of a lease) be discharged from all obligations and covenants under this Indenture and any Securities issued hereunder, and may be liquidated and dissolved.

 

ARTICLE V.
 REDEMPTION OF SECURITIES

 

Section 5.01                             Applicability of Article.  Redemption of Securities at the election of the Company or otherwise, as permitted or required by any provision of this Indenture or any Securities, shall be made in accordance with such provision and (except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series) this Article V.

 

Section 5.02                             Election to Redeem; Notice to Trustee.  In case of any redemption of any series of Securities at the election of the Company, the Company shall, upon not later than the earlier of the date that is 45 days prior to the Redemption Date fixed by the Company or the date on which notice is given to the Holders (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date and of the principal amount of Securities to be redeemed and shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Securities of such series to be redeemed pursuant to Section 5.03.

 

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Section 5.03                             Selection by Trustee of Securities to Be Redeemed.  If fewer than all of the Securities of any series are to be redeemed at any time, the Trustee will, subject to applicable law, select Securities of any series for redemption as follows:

 

(a)                                 if the Securities are Global Securities, in accordance with the standard procedures of DTC or any successor Depositary;

 

(b)                                 if the Securities are not Global Securities then held by DTC or a successor Depositary, on a pro rata basis, by lot or by any other method the Trustee deems fair and appropriate; and

 

(c)                                  if the Securities are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Securities are listed.

 

Section 5.04                             Notice of Redemption.  Notice of redemption shall be given in the manner provided for in Section 11.02 not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, except that redemption notices may be mailed more than 60 days prior to a Redemption Date if such notice is issued in connection with a defeasance of the Securities or a satisfaction and discharge of this Indenture. The Trustee shall give notice of redemption in the Company’s name and at the Company’s expense; provided, however, that the Company shall deliver to the Trustee, at least 45 days prior to the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee), an Officers’ Certificate requesting that the Trustee give such notice at the Company’s expense and setting forth the information to be stated in such notice as provided in the following items.

 

All notices of redemption shall state:

 

(a)                                 the name of the Securities, including series and issue date, interest rate, maturity date and certificate numbers;

 

(b)                                 the Redemption Date;

 

(c)                                  the Redemption Price (or the method of determination thereof) and the amount of accrued interest and Additional Amounts, if any, to the Redemption Date payable as provided in Section 5.06;

 

(d)                                 if less than all outstanding Securities are to be redeemed, the identification of the particular Securities (or portion thereof) to be redeemed, as well as the aggregate principal amount of Securities to be redeemed and the aggregate principal amount of Securities to be outstanding after such partial redemption;

 

(e)                                  in case any Securities are to be redeemed in part only, the notice which relates to such Securities shall state that on and after the Redemption Date, upon surrender of such Securities, the Holder will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed;

 

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(f)                                   that on the Redemption Date, the Redemption Price (and accrued interest, if any, to the Redemption Date payable as provided in Section 5.06) will become due and payable upon each such Security, or the portion thereof, to be redeemed, and, unless the Company defaults in making the redemption payment, that interest and Additional Amounts, if any, on Securities (or the portions thereof) called for redemption will cease to accrue on and after said date;

 

(g)                                  the place or places where such Securities are to be surrendered for payment of the Redemption Price and accrued interest, if any;

 

(h)                                 the name and address of the Paying Agent;

 

(i)                                     that Securities called for redemption (other than a Global Security) must be surrendered to the Paying Agent to collect the Redemption Price;

 

(j)                                    the CUSIP, ISIN or Common Code number, and that no representation is made as to the accuracy or correctness of the CUSIP, ISIN or Common Code number, if any, listed in such notice or printed on the Securities; and

 

(k)                                 the Section of this Indenture and the paragraph of the Securities pursuant to which the Securities are to be redeemed.

 

Section 5.05                             Deposit of Redemption Price.  Not later than 11:00 a.m. New York City time on the Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.06) an amount of money sufficient to pay the Redemption Price of, and accrued interest and Additional Amounts, if any, on, all the Securities which are to be redeemed on that date.

 

Section 5.06                             Securities Payable on Redemption Date.  Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified (together with accrued and unpaid interest and Additional Amounts, if any, to the Redemption Date), and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest and Additional Amounts, if any) such Securities shall cease to bear interest and Additional Amounts, if any.  Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued and unpaid interest and Additional Amounts, if any, to the Redemption Date (subject to the rights of Holders of record on the relevant record date to receive interest and Additional Amounts, if any, due on an interest payment date that is on or prior to the Redemption Date).

 

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest and Additional Amounts, if any, from the Redemption Date at the rate borne by the Securities.

 

Section 5.07                             Securities Redeemed in Part.  Any Security which is to be redeemed only in part (pursuant to the provisions of this Article V) shall be surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 2.05 (with, if the

 

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Company or the Trustee so require, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s 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 at the expense of the Company, a new Security or Securities, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered, provided that, unless otherwise specified for a series of Securities pursuant to Section 2.01, each such new Security will be in a principal amount of $2,000 or any integral multiple of $1,000 in excess thereof.  Unless otherwise specified for a series of Securities pursuant to Section 2.01, no Securities of $2,000 or less may be redeemed in part.

 

ARTICLE VI.
 DEFAULTS AND REMEDIES

 

Section 6.01                             Events of Default.  Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the supplemental indenture, Board Resolution, Officers’ Certificate or Company Order establishing such series of Securities or in the form of Security for such series, an “Event of Default,” wherever used herein with respect to Securities of any series, occurs if:

 

(a)                                 the Company defaults in the payment of any installment of interest on or Additional Amounts, if any, with respect to any Security of that series under this Indenture when due, continued for 30 days;

 

(b)                                 the Company defaults in the payment when due (at Stated Maturity, upon acceleration, redemption, required repurchase or otherwise) of the principal of, or premium, if any, on the Securities of that series;

 

(c)                                  the Company fails to comply with the provisions of Section 4.01 hereof;

 

(d)                                 the Company fails for 90 days after written notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the outstanding Securities of that series issued under this Indenture to comply with any of the other covenants or agreements in this Indenture applicable to the Securities of that series or in the Securities of that series;

 

(e)                                  the Company fails to deposit any sinking fund payment, if any, when due, in respect of any Security of that series; or

 

(f)                                   (i)                                     the Company or any Significant Subsidiary:

 

(1)                                 commences a voluntary case or proceeding under any Bankruptcy Law;

 

(2)                                 consents to the entry of a judgment, decree or order for relief against it in an involuntary case or proceeding under any Bankruptcy Law;

 

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(3)                                 consents to the appointment of a Custodian of it or for any substantial part of its property;

 

(4)                                 makes a general assignment for the benefit of its creditors; or

 

(5)                                 consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it;

 

or takes any comparable action under any foreign laws relating to insolvency; or

 

(ii)                                  a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(1)                                 is for relief against the Company or any Significant Subsidiary;

 

(2)                                 appoints a Custodian of the Company or any Significant Subsidiary; or

 

(3)                                 orders the winding up or liquidation of the Company or any Significant Subsidiary;

 

or any similar relief is granted under any foreign laws and the order, decree or relief remains unstayed and in effect for 90 days.

 

Section 6.02                             Acceleration.  Except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of such series, if any Event of Default with respect to any Securities of such series at the time outstanding (other than those of the type described in Section 6.01(f) with respect to the Company) occurs and is continuing, the Trustee may, and at the direction of the Holders of at least 25% in aggregate principal amount of outstanding Securities of such series shall, declare the principal of all the Securities of that series, together with all accrued and unpaid interest and Additional Amounts, if any, and premium, if any, to be due and payable immediately by notice in writing to the Company specifying the respective Event of Default and that such notice is a notice of acceleration, and the same shall become immediately due and payable.

 

Except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, in the case of an Event of Default with respect to such series specified in Section 6.01(f) hereof with respect to the Company, the principal of all the Securities of that series, together with all accrued and unpaid interest and Additional Amounts, if any, and premium, if any, shall become due and payable immediately without further action or notice by the Trustee or the Holders.  Holders may not enforce this Indenture or the Securities except as provided in this Indenture.

 

Except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, at any time after a declaration of acceleration with respect to the Securities of such series, the Holders of a majority in principal amount of the Securities of that

 

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series then outstanding (by written notice to the Trustee) may, on behalf of the Holders of all the Securities of that series, rescind and cancel such declaration and its consequences if:

 

(a)                                 the rescission would not conflict with any judgment or decree of a court of competent jurisdiction;

 

(b)                                 all existing Events of Default with respect to Securities of that series have been cured or waived except nonpayment of principal of and interest on the Securities of that series that have become due solely by reason of such declaration of acceleration;

 

(c)                                  to the extent the payment of such interest is lawful, interest (at the same rate specified in the Securities of such series) on overdue installments of interest and Additional Amounts, if any, and overdue payments of principal which has become due otherwise than by such declaration of acceleration has been paid;

 

(d)                                 the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its reasonable expenses, disbursements and advances; and

 

(e)                                  in the event of the cure or waiver of an Event of Default, the Trustee has received an Officers’ Certificate that such Event of Default has been cured or waived.

 

Section 6.03                             Other Remedies.  If an Event of Default with respect to any series occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of (or premium, if any) or interest or Additional Amounts, if any, on the Securities of such series or to enforce the performance of any provision of the Securities of such series or this Indenture with respect to such series.

 

The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative.  Every right and remedy given by this Article or by law to the Trustee or any Holder may be exercised from time to time, and as often as deemed expedient, by the Trustee or the Holders, as the case may be.

 

Section 6.04                             Waiver of Past Defaults.  Except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, the Holders of a majority in principal amount of the then outstanding Securities of such series by written notice to the Trustee may, on behalf of the Holders of all the Securities of such series, waive, by their consent (including, without limitation consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities of such series), an existing Default or Event of Default, with respect to such series and its consequences or compliance with any provisions except (i) a Default or Event of Default in the payment of the principal of, or interest, if any, on a Security of such series or (ii) a Default or Event of Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected.  When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right.

 

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Section 6.05                             Control by Majority.  With respect to Securities of any series, the Holders of a majority in principal amount of the outstanding Securities of such series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01 and Section 7.02, that the Trustee determines would involve the Trustee in personal liability.  Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

 

Section 6.06                             Limitation on Suits.  Subject to Section 6.07, a Holder of a Security of any series may not pursue any remedy with respect to this Indenture or the Securities of such series unless:

 

(a)                                 such Holder has previously given to the Trustee written notice stating that an Event of Default is continuing with respect to such series;

 

(b)                                 Holders of at least 25% in aggregate principal amount of the outstanding Securities of such series have requested in writing that the Trustee pursue the remedy;

 

(c)                                  such Holders have offered to the Trustee security or indemnity satisfactory to it against any loss, liability or expense;

 

(d)                                 the Trustee has not complied with such request within 60 days after receipt of the request and the offer of security or indemnity; and

 

(e)                                  the Holders of a majority in principal amount of the outstanding Securities of such series have not given the Trustee a direction that is inconsistent with such request within such 60-day period.

 

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not any such use by a Holder prejudices the rights of any other Holders or obtains preference or priority over such other Holders).

 

Section 6.07                             Rights of Holders to Receive Payment.  Notwithstanding any other provision of this Indenture (including, without limitation, Section 6.06), the right of any Holder to receive payment of principal of, premium (if any) or interest or Additional Amounts, if any, when due on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

Section 6.08                             Collection Suit by Trustee.  If an Event of Default specified in Section 6.01(a) or Section 6.01(b) occurs and is continuing with respect to Securities of any series, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) with respect to such series and the amounts provided for in Section 7.07.

 

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Section 6.09                             Trustee May File Proofs of Claim.  The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its Subsidiaries or its or their respective creditors or properties and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07.  To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 6.10                             Priorities.  If the Trustee collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order:

 

FIRST:  to the Trustee for amounts due under Section 7.07;

 

SECOND:  to Holders for amounts due and unpaid on the Securities in respect of which or for the benefit of which such money has been collected, for principal, premium, if any, and interest and Additional Amounts, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium, if any, and interest and Additional Amounts, if any, respectively; and

 

THIRD:  to the Company or to such other party as a court of competent jurisdiction may direct.

 

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.  At least 15 days before such record date, the Company shall mail to each Holder and the Trustee a notice that states the record date, the payment date and amount to be paid.

 

Section 6.11                             Undertaking for Costs.  In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by the Trustee, a suit by the Company, a

 

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suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in outstanding principal amount of the Securities of any series.

 

ARTICLE VII.
 TRUSTEE

 

Section 7.01                             Duties of Trustee.

 

(a)                                 If an Event of Default has occurred and is continuing, the Trustee shall exercise 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; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security against loss, liability or expense satisfactory to the Trustee in its sole discretion.

 

(b)                                 Except during the continuance of an Event of Default with respect to the Securities of any series:

 

(i)                                     the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(ii)                                  in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, opinions or orders furnished to the Trustee and conforming to the requirements of this Indenture.  However, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether or not they conform on their face to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

 

(c)                                  The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(i)                                     this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

 

(ii)                                  the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(iii)                               the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.

 

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(d)                                 Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

 

(e)                                  The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

 

(f)                                   Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law or any other provision of this Indenture.

 

(g)                                  No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.

 

(h)                                 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 7.01.

 

(i)                                     Unless otherwise specifically provided in this Indenture, any demand, request or direction from the Company shall be sufficient if evidenced by a Company Request or Company Order.

 

(j)                                    The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction.

 

Section 7.02                             Rights of Trustee.  Subject to Section 7.01:

 

(a)                                 The Trustee may conclusively rely on any document (whether in its original, facsimile form or in PDF format) 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.

 

(b)                                 Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate and/or an Opinion of Counsel.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate and/or Opinion of Counsel.

 

(c)                                  The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)                                 The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

 

(e)                                  The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall

 

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be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in reliance thereon.

 

(f)                                   The Trustee is not required to make any inquiry or investigation into facts or matters stated in any 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 determines to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company personally or by agent, in which case the Company shall be responsible for the reasonable expenses of such investigation.

 

(g)                                  The Trustee is not required to take notice and shall not be deemed to have notice of any Default or Event of Default hereunder with respect to any series of Securities, unless a Trust Officer of the Trustee has actual knowledge thereof or has received notice in writing of such Default or Event of Default from the Company or the Holders of at least 25% in aggregate principal amount of the Securities of such series then outstanding and such notice references the Securities and this Indenture, and in the absence of any such notice, the Trustee may conclusively assume that no such Default or Event of Default exists.

 

(h)                                 The Trustee is not required to give any bond or surety with respect to the performance of its duties or the exercise of its powers under this Indenture.

 

(i)                                     In the event the Trustee receives inconsistent or conflicting requests and indemnity from two or more groups of Holders of Securities, each representing less than the aggregate principal amount of Securities outstanding required to take any action thereunder, the Trustee, in its sole discretion may determine what action, if any, shall be taken.

 

(j)                                    The Trustee’s immunities and protections from liability and its right to indemnification in connection with the performance of its duties under this Indenture shall extend to the Trustee’s officers, directors, agents, attorneys and employees and to the Trustee in each of its capacities hereunder.  Such immunities and protections and right to indemnification, together with the Trustee’s right to compensation, shall survive the Trustee’s resignation or removal, the discharge of this Indenture and final payments of the Securities.

 

(k)                                 The permissive right of the Trustee to take actions permitted by this Indenture shall not be construed as an obligation or duty to do so.

 

(l)                                     The Trustee shall have no duty to inquire as to the performance of the Company’s covenants herein.

 

(m)                             Any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution.

 

(n)                                 In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

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(o)                                 The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

 

Section 7.03                             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 its Affiliates with the same rights it would have if it were not Trustee.  Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights.  However, the Trustee must comply with Section 7.10 and Section 7.11.

 

Section 7.04                             Trustee’s Disclaimer.  The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.

 

Section 7.05                             Notice of Defaults.  If a Default or Event of Default with respect to the Securities of any series occurs and is continuing and if a Trust Officer has actual knowledge thereof, the Trustee shall mail to each Holder of a Security of such series notice of the Default or Event of Default within 90 days after obtaining such knowledge, unless the Default or Event of Default was already cured or waived.  Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest or Additional Amounts, if any, on any Security of any series, the Trustee may withhold the notice if it in good faith determines that withholding the notice is in the interests of Holders of such series.

 

Section 7.06                             Reports by Trustee to Holders.  Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture and for so long as the Securities of any series remain outstanding, the Trustee shall mail to each Holder of Securities of such series a brief report dated as of such reporting date that complies with TIA § 313(a).  The Trustee also shall comply with TIA § 313(b).  The Trustee shall also transmit by mail all reports required by TIA § 313(c).

 

A copy of each report at the time of its mailing to Holders of Securities of any series shall be filed with the SEC and each stock exchange (if any) on which the Securities of such series are listed.  The Company agrees to notify promptly the Trustee in writing whenever the Securities of any series become listed on any stock exchange and of any delisting thereof.

 

Section 7.07                             Compensation and Indemnity.  The Company shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the Company and the Trustee shall from time to time agree in writing.  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee promptly upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, costs of preparing and reviewing reports, certificates and other documents, costs of preparation and mailing of notices to Holders, in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel,

 

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accountants and experts.  The Company shall indemnify, defend, protect and hold the Trustee harmless from and against any and all losses, liabilities, damages, claims, penalties, fines or expenses (including reasonable attorneys’ and agents’ fees and expenses) (for purposes of this Section 7.07, “losses”) suffered or incurred by it arising out of or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture (including this Section 7.07) and of defending itself against any claims (whether asserted by any Holder, the Company or otherwise), except to the extent such losses may be attributable to its negligence or willful misconduct as determined by a court of competent jurisdiction.  The Trustee shall notify the Company promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder.  The Company shall defend the claim and the Trustee shall provide reasonable cooperation at the Company’s expense in the defense.  The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel; provided that the Company shall not be required to pay such fees and expenses if it assumes the Trustee’s defense, and, in the reasonable judgment of outside counsel to the Trustee, (i) there is no conflict of interest between the Company and the Trustee in connection with such defense and (ii) there are legal defenses available to the Trustee that are different from or are in addition to those available to the Company or if the parties commonly represented do not agree as to the action (or inaction) of counsel.  The Company shall not be under any obligation to pay for any written settlement without its consent, which consent shall not be unreasonably delayed, conditioned or withheld.  The Company need not indemnify any losses incurred by the Trustee through the Trustee’s own willful misconduct or negligence as determined by a court of competent jurisdiction.

 

To secure the Company’s payment obligations in this Section 7.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of, interest and Additional Amounts, if any, on particular Securities.

 

The Company’s payment and indemnification obligations pursuant to this Section 7.07 shall survive the discharge of this Indenture, the resignation or removal of the Trustee and payment in full of the Securities.  When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(f) with respect to the Company, the expenses are intended to constitute expenses of administration under any Bankruptcy Law.

 

Section 7.08                             Replacement of Trustee.  No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article VII shall become effective until the acceptance of appointment by the successor Trustee.  The Trustee may resign at any time with respect to the Securities of one or more series by so notifying the Company.  The Holders of a majority in principal amount of the then outstanding Securities of any series may remove the Trustee with respect to the Securities of such series by so notifying the Trustee and may appoint a successor Trustee.  The Company shall remove the Trustee if:

 

(a)                                 the Trustee fails to comply with Section 7.10;

 

(b)                                 the Trustee is adjudged bankrupt or insolvent;

 

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(c)           a receiver or other public officer takes charge of the Trustee or its property; or

 

(d)           the Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed by the Company or by the Holders of a majority in principal amount of the then outstanding Securities of any series and such Holders of such series do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of the Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee with respect to such series.

 

If a successor Trustee with respect to Securities of any series does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of at least 10% in principal amount of the then outstanding Securities of such series may petition, at the Company’s expense, any court of competent jurisdiction for the appointment of a successor Trustee with respect to Securities of such series.

 

If the Trustee with respect to the Securities of a series fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b), any Holder who has been a bona fide Holder of a Security of such series for at least six months may petition, at the Company’s expense, any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to such series.

 

In case of the appointment of a successor Trustee with respect to all Securities, each such 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, without any further act, deed or conveyance, shall have all the rights, power and duties of the retiring Trustee under this Indenture.  The successor Trustee shall mail a notice of its succession to Holders.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.

 

In case of the appointment of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more (but not all) series shall execute and deliver an indenture supplemental hereto in which each successor Trustee shall accept such appointment and that (1) shall confer to each successor Trustee all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall confirm that all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee.  Nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, and each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee.  Upon the execution and delivery of such supplemental indenture, the resignation or removal of

 

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the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall have all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.  On request of the Company or any successor Trustee, such retiring Trustee shall transfer to such successor Trustee all property held by such retiring Trustee as Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.  Such retiring Trustees shall, however, have the right to deduct its unpaid fees and expenses, including, without limitation, reasonable attorneys’ fees and expenses.

 

Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

 

So long as no Event of Default, or no event which is, or after notice or lapse of time, or both, would become, an Event of Default, shall have occurred and be continuing, and except with respect to a Trustee appointed by the act of the Holders of a majority in principal amount of then outstanding Securities of any series, if the Company shall have delivered to the Trustee (1) a Board Resolution appointing a successor Trustee, effective as of a date specified therein (which date shall be no sooner than 45 days after the date of such delivery, unless a shorter period shall be acceptable to the Trustee), and (2) an instrument of acceptance of such appointment, effective as of such date, by such successor Trustee, then the Trustee shall be deemed removed, the successor Trustee shall be deemed to have been appointed by the Company and such appointment shall be deemed to have been accepted as contemplated, all as of such date, and all other provisions of this Section 7.08 shall be applicable to such removal, appointment and acceptance except to the extent inconsistent with this subsection.

 

Section 7.09          Successor Trustee by Merger.  If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.  The predecessor Trustee shall have no liability for any action or inaction by any successor Trustee.

 

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture, any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture.

 

Section 7.10          Eligibility; Disqualification.  The Trustee shall at all times satisfy the requirements of TIA § 310(a).  The Trustee shall have a combined capital and surplus of at least $50.0 million as set forth in its most recent published annual report of condition.  The Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities or

 

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certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

 

Section 7.11          Preferential Collection of Claims Against Company.  The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

 

ARTICLE VIII.
 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01          Option to Effect Legal Defeasance or Covenant Defeasance.  Unless otherwise designated in Section 2.01(w), the Securities of any series shall be subject to defeasance or covenant defeasance pursuant to Section 8.02 or Section 8.03, in accordance with any applicable requirements provided pursuant to Section 2.01 and upon compliance with the conditions set forth in this Article VIII.  The Company may, at its option and at any time, elect to have either Section 8.02 or Section 8.03 hereof be applied to all outstanding Securities of any series so subject to defeasance or covenant defeasance.  Any such election shall be evidenced by a Board Resolution of the Company or in another manner specified as contemplated by Section 2.01 for such Securities.

 

Section 8.02          Legal Defeasance and Discharge.  Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02 with respect to Securities of any series, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its Obligations with respect to all outstanding Securities of such series on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding Securities with respect to such series, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (a) through (e) below, and to have satisfied all its other obligations under the Securities with respect to such series and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:  (a) the rights of Holders of outstanding Securities with respect to such series to receive, solely from the trust fund described in Section 8.04 and Section 8.05 hereof, and as more fully set forth in such Sections, payments in respect of the principal of, premium, if any, and interest and Additional Amounts, if any, on such Securities when such payments are due, (b) the Company’s obligations with respect to such Securities under Article II and Section 3.01 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s obligations in connection therewith, (d) the optional redemption provisions, if any, with respect to such Securities, and (e) this Article VIII.  If the Company exercises under Section 8.01 hereof the option applicable to this Section 8.02, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, payment of the Securities with respect to such series may not be accelerated because of an Event of Default.  Subject to compliance with this Article VIII, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

 

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Section 8.03          Covenant Defeasance.  Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 with respect to Securities of any series, the Company shall, with respect to such series of Securities, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Section 3.02, Section 3.04, and Section 4.01, and any other covenants specified pursuant to Section 2.01 with respect to the outstanding Securities of such series, on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Securities of such series shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders of such series (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder.  For this purpose, Covenant Defeasance means that, with respect to the outstanding Securities of such series, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby.  If the Company exercises under Section 8.01 hereof the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, payment of the Securities of such series may not be accelerated because of an Event of Default specified in clause (d) of Section 6.01 with respect to the covenants described above.

 

Section 8.04          Conditions to Legal or Covenant Defeasance.  The following shall be the conditions to the application of either Section 8.02 or Section 8.03 hereof to the outstanding Securities of any series.

 

In order to exercise Legal Defeasance or Covenant Defeasance with respect to the Securities of any series:

 

(a)           the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Securities of such series, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, and interest and Additional Amounts, if any, and premium, if any, on the outstanding Securities of such series on the stated date for payment or on the applicable Redemption Date, as the case may be, and the Company must specify whether the Securities of such series are being defeased to such stated date for payment or to a particular Redemption Date;

 

(b)           in the case of Legal Defeasance, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:  (a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or (b) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel will confirm that, the Holders of the outstanding Securities of such series will not recognize income, gain or

 

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loss for federal income tax purposes as a result of such Legal Defeasance and shall be subject to federal income tax in the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(c)           in the case of Covenant Defeasance, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that Holders of the outstanding Securities of such series shall not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and shall be subject to federal income tax in the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(d)           no Default or Event of Default has occurred and is continuing with respect to the Securities of such series on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);

 

(e)           such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company is a party or by which the Company is bound;

 

(f)            the Company must deliver to the Trustee an Officers’ Certificate stating that such deposit was not made by the Company with the intent of preferring the Holders of Securities of such series over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

 

(g)           the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

Section 8.05          Deposited Cash and Government Securities to be Held in Trust; Other Miscellaneous Provisions.  Subject to Section 8.06 hereof, all cash and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee), (collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Securities of such series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities of such series and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of Securities of such series of all sums due and to become due thereon in respect of principal, premium, if any, interest and Additional Amounts, if any, but such cash and securities need not be segregated from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof 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 the outstanding Securities of such series.

 

Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any cash or non-callable

 

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Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized independent registered public accounting firm expressed in a written certification thereof delivered to the Trustee (which may be the certification delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06          Repayment to Company.  Any cash or non-callable Government Securities deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, on, or interest or Additional Amounts, if any, on, any Security of any series and remaining unclaimed for two years after such principal, premium, if any, or interest or Additional Amounts, if any, has become due and payable shall be paid to the Company on its request (unless an abandoned property law designates another Person) or (if then held by the Company) shall be discharged from such trust; and such Holder shall thereafter, as an unsecured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such cash and securities, and all liability of the Company as Trustee thereof, shall thereupon cease.

 

Section 8.07          Reinstatement.  If the Trustee or Paying Agent is unable to apply any cash or non-callable Government Securities in accordance with Section 8.02, Section 8.03 or Section 8.05 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.04 hereof until such time as the Trustee or Paying Agent is permitted to apply all such cash and securities in accordance with Section 8.02, Section 8.03 or Section 8.05 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, on, or interest or Additional Amounts, if any, on, any Security of such series following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such series to receive such payment from the cash and securities held by the Trustee or Paying Agent.

 

ARTICLE IX.
 AMENDMENTS

 

Section 9.01          Without Consent of Holders.  Except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, the Company and the Trustee may amend or supplement this Indenture or the Securities without notice to or consent of any Holder:

 

(a)           to cure any ambiguity, omission, defect or inconsistency that does not adversely affect Holders of Securities of the relevant series in any material respect;

 

(b)           to provide for the assumption of the Company’s obligations to Holders of Securities of any series in the case of a merger or consolidation or disposition of all or substantially all of the Company’s properties or assets, in each case that is permitted under this Indenture;

 

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(c)           to provide for any Guarantees of Securities of any series; to provide for any security for Securities of any series or for any such Guarantees; or to modify or release any such Guarantees or security in compliance with the terms of this Indenture and the supplemental indenture or other instrument that provided for such Guarantees or security;

 

(d)           to comply with requirements of the SEC in order to maintain the qualification of this Indenture under the Trust Indenture Act;

 

(e)           to add covenants for the benefit of the Holders to the Securities of any series or to surrender any rights the Company has under this Indenture;

 

(f)            to add any additional Events of Default with respect to all or any series of the Securities (and, if any such Event of Default is applicable to less than all series of Securities, specifying the series to which such Event of Default is applicable);

 

(g)           to add circumstances under which the Company will pay additional interest on the Securities of the relevant series;

 

(h)           to make any change that would provide any additional rights or benefits to the Holders of Securities of any series or that does not adversely affect the rights under this Indenture of any such Holder in any material respect;

 

(i)            to conform the text of this Indenture or any Securities to the description thereof in any prospectus or prospectus supplement of the Company with respect to the offer and sale of Securities of any series, to the extent that such provision is inconsistent with a provision of this Indenture or the Securities;

 

(j)            to provide for the issuance of and establish the form or terms of Securities of any series as permitted by Section 2.01;

 

(k)           to provide for uncertificated Securities in addition to or in place of certificated Securities;

 

(l)            to comply with the rules of any applicable Depositary;

 

(m)          to change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become effective only when there is no outstanding Security of any series created prior to the execution of such amendment or supplemental indenture that is adversely affected in any material respect by such change in or elimination of such provision;

 

(n)           to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Section 8.01; provided, however, that any such action shall not adversely affect the interest of the Holders of Securities of such series or any other series of Securities in any material respect; or

 

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(o)           to evidence and provide for the acceptance under this Indenture of a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture necessary to provide for or facilitate the administration of the trusts under this Indenture.

 

After an amendment under this Indenture becomes effective, the Company is required to mail to the Holders of each Security affected thereby a notice briefly describing such amendment.  However, the failure to give such notice to all the Holders of each Security affected thereof, or any defect therein, will not impair or affect the validity of the amendment or supplemental indenture under this Section 9.01.

 

Section 9.02          With Consent of Holders.  Except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture with the consent (including consents obtained in connection with a purchase of, or a tender offer or exchange offer for, Securities) of the Holders of a majority in principal amount of the then outstanding Securities of each series affected by such amendment or supplement (acting as separate classes).

 

Upon the request of the Company, accompanied by a Board Resolution, and upon the filing with the Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.05, the Trustee shall, subject to Section 9.06, join with the Company in the execution of such amendment or supplemental indenture.

 

Except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, the Holders of a majority in principal amount of the then outstanding Securities of one or more series or of all series affected by such waiver (acting as separate classes) may waive compliance in a particular instance by the Company with any provision of this Indenture with respect to Securities of such series (including waivers obtained in connection with a purchase of, or a tender offer or exchange offer for, Securities of such series).

 

However, except as otherwise provided as contemplated by Section 2.01 with respect to the Securities of any series, without the consent of each Holder of Securities of such series affected, an amendment, supplement or waiver may not (with respect to any Securities of such series held by a non-consenting Holder):

 

(a)           make any change in the percentage of principal amount of Securities of that series whose Holders must consent to an amendment, supplement or waiver or to make any change in this provision for modification;

 

(b)           reduce any rate of interest or change the time for payment of interest on the Securities of that series;

 

(c)           reduce the principal amount of the Securities of that series or change their Stated Maturity;

 

(d)           make payments on the Securities of that series payable in currency other than as originally stated in the Securities of that series;

 

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(e)           reduce the amount payable, including any premium payable upon, the optional or mandatory redemption or repurchase of any Security of that series or change the time (other than amendments related to notice provisions) at which any Security of that series may be redeemed or required to be repurchased;

 

(f)            change the provisions relating to the waiver of past Defaults or impair the Holder’s right to institute suit for the enforcement of any payment on the Securities of that series (other than as permitted in clause (g) below); or

 

(g)           waive a continuing Default or Event of Default regarding any principal or interest payment on the Securities of that series (except a rescission of acceleration of the Securities by Holders of at least a majority in aggregate principal amount of the then outstanding Securities of that series and a waiver of the payment default that resulted from such acceleration).

 

It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance of the proposed amendment.

 

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of any other series.

 

A consent to any amendment or waiver under this Indenture by any Holder of the Securities given in connection with a tender of such Holder’s Securities will not be rendered invalid by such tender.  After an amendment under this Section 9.02 becomes effective, the Company shall mail to Holders of each Security affected thereby a notice briefly describing such amendment.  The failure to give such notice to all Holders of each Security affected thereby, or any defect therein, shall not impair or affect the validity of an amendment, supplemental indenture or waiver under this Section 9.02.

 

Section 9.03          Compliance with Trust Indenture Act.  Every amendment or supplement to this Indenture or the Securities shall comply with the Trust Indenture Act of 1939 as then in effect.

 

Section 9.04          Revocation and Effect of Consents and Waivers.  A consent to an amendment or a waiver by a Holder of a Security shall be in writing and bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security.  However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective.  After an amendment or waiver becomes effective with respect to a series of Securities, it shall bind every Holder of Securities of such series.

 

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For purposes of this Indenture, the written consent of the Holder of a Global Security shall be deemed to include any consent delivered by an Agent Member by electronic means in accordance with the Automated Tender Offer Procedures system or other customary procedures of, and pursuant to authorization by, DTC.

 

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture.  The Trustee may, but shall not be obligated to, fix a record date for the purpose of determining the Holders of Securities of any series entitled to join in the giving, making or taking of (i) any notice pursuant to Section 6.01(d) of any Default, (ii) any declaration of acceleration pursuant to Section 6.02, (iii) any request to institute proceedings pursuant to Section 6.06(b), or (iv) any direction referred to in Section 6.05, in each case with respect to such series.  If a record date is so fixed, then notwithstanding the second preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date.  No such consent shall become valid or effective more than 180 days after such record date.

 

Section 9.05          Notation on or Exchange of Securities.  If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee.  The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder.  Alternatively, 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 to issue a new Security shall not affect the validity of such amendment.

 

Section 9.06          Trustee To Sign Amendments.  The Trustee shall sign any amendment authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may but need not sign it.  In signing such amendment the Trustee shall receive indemnity satisfactory to it and shall receive, and (subject to Section 7.01 and Section 7.02) shall be fully protected in conclusively relying upon an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Indenture, that such amendment is the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to customary exceptions.

 

ARTICLE X.
 SATISFACTION AND DISCHARGE

 

Section 10.01       Satisfaction and Discharge.  This Indenture will be discharged and will cease to be of further effect as to all Securities of any series issued hereunder (except as to surviving rights of registration of transfer or exchange of such Securities and as otherwise specified hereunder), when:

 

(a)           either:

 

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(i)            all Securities of such series that have been authenticated, except lost, stolen or destroyed Securities that have been replaced or paid and Securities of such series for whose payment money has been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or

 

(ii)           all Securities of such series that have not been delivered to the Trustee for cancellation have become due and payable or will become due and payable within one year by reason of the mailing of a notice of redemption or otherwise and the Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of Securities of such series, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants (in the case of non-callable Government Securities), to pay and discharge the entire indebtedness on such Securities not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest and Additional Amounts, if any, to the date of maturity or redemption;

 

(b)           no Default or Event of Default with respect to such series has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

 

(c)           the Company has paid or caused to be paid all sums payable by it hereunder with respect to such series and pursuant to Section 7.07;

 

(d)           the Company has delivered irrevocable instructions to the Trustee hereunder to apply the deposited money toward the payment of such Securities at fixed maturity or the Redemption Date, as the case may be; and

 

(e)           the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, which state that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture with respect to such series have been satisfied.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 10.01 hereof 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 the outstanding Securities of such series.

 

Notwithstanding the satisfaction and discharge of this Indenture with respect to Securities of any series, the obligations of the Company to the Trustee under Section 7.07 and, if money shall have been deposited with the Trustee pursuant to Section 10.01(a)(ii) with respect to such Securities, the obligations of the Company of such series under Section 3.03 and the obligations

 

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of the Trustee under Section 10.02 with respect to such Securities shall survive such satisfaction and discharge.

 

Section 10.02       Application of Trust Money.  All money deposited with the Trustee pursuant to Section 10.01 with respect to Securities of any series shall be held in trust and applied by it, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.  All moneys deposited with the Trustee pursuant to Section 10.01 (and held by it or any Paying Agent) for the payment of Securities subsequently converted shall be returned to the Company upon Company Request, to the extent originally deposited by the Company.  The Company may direct by a Company Order the investment of any money deposited with the Trustee pursuant to Section 10.01, without distinction between principal and income, in (1) United States Treasury Securities with a maturity of one year, or less or (2) a money market fund that invests solely in short term United States Treasury Securities, and from time to time the Company may direct the reinvestment of all or a portion of such money in other securities or funds meeting the criteria specified in preceding clauses (1) or (2) of this sentence.

 

ARTICLE XI.
 MISCELLANEOUS

 

Section 11.01       Trust Indenture Act Controls.  If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the provision required by the TIA shall control.  If any provision of this Indenture modifies or excludes any provision of the TIA which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or excluded, as the case may be.

 

Section 11.02       Notices.  Any notice or communication shall be in writing (including facsimile and electronic transmission in PDF format) and delivered in person, by facsimile (or other electronic means), by overnight air courier guaranteeing next Business Day delivery or mailed by first-class mail addressed as follows:

 

if to the Company:

 

901 S. Central Expressway

Richardson, Texas  75080
 Attn:               General Counsel

Fax:                972-498-9615

 

if to the Trustee:

 

Wells Fargo Bank, N.A.

750 N. Saint Paul Place, Suite 1750
 Dallas, Texas  75201

Attn:               Corporate, Municipal and Escrow Services

Fax:                214-756-7401

 

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All notices and communications made, given, furnished or filed with or to the Trustee or the Company shall be deemed to have been duly made, given furnished or filed:  (i) at the time delivered by hand, if personally delivered; (ii) when receipt is acknowledged, if sent by facsimile (or other electronic means); (iii) the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next Business Day delivery; and (iv) five calendar days after being deposited in the mail, postage prepaid, if mailed.

 

The Company or the Trustee by notice to the others may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication mailed to a registered Holder shall be mailed to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.  The Registrar shall provide the Company with address information with respect to the Holders as promptly as practicable following the Company’s request therefor.  Any notice or communication shall also be mailed to any Person described in TIA § 313(c), to the extent required by the TIA.

 

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.  If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

 

Section 11.03       Communication by Holders with other Holders.  Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Securities.  The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

 

Section 11.04       Certificate and Opinion as to Conditions Precedent.  Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:

 

(a)           an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(b)           an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

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 as to such matters in one or several documents.

 

Any certificate or opinion of an Officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such Officer knows, or in the exercise of reasonable care should know, that the certificate or

 

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opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous.  Any such certificate or Opinion of Counsel may be based, and may state that it is so based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Officer or Officers of the Company stating that the information with respect to such factual matters known to the Company, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Section 11.05       Statements Required in Certificate or Opinion.  Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (except for the Certificate specified in Section 3.05) shall include:

 

(a)           a statement that the individual making such certificate or opinion has read such covenant or condition;

 

(b)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(c)           a statement that, in the opinion of 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

 

(d)           a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

 

Section 11.06       When Securities Disregarded.  In determining whether the Holders of the required principal amount of Securities of any series have concurred in any direction, waiver or consent, Securities owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which a Trust Officer of the Trustee actually knows are so owned shall be so disregarded.  Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.

 

Section 11.07       Rules by Trustee, Paying Agent and Registrar.  The Trustee may make reasonable rules for action by, or a meeting of, Holders.  The Registrar and the Paying Agent may make reasonable rules for their functions.

 

Section 11.08       Legal Holidays.  A “Legal Holiday” is a Saturday, a Sunday or other day on which commercial banking institutions are authorized or required to be closed in New York, New York.  If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.  If a regular record date is a Legal Holiday, the record date shall not be affected.

 

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Section 11.09       Governing Law; Waiver of Jury Trial.  THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THERETO (OTHER THAN N.Y. GENERAL OBLIGATIONS LAW § 5-1401).  EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

Section 11.10       No Recourse Against Others.  No director, manager, officer, employee, incorporator, member, partner, stockholder or other owner of Capital Stock of the Company, as such, will have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation.  Each Holder of Securities by accepting a Security waives and releases all such liability.  The waiver and release are part of the consideration for issuance of the Securities.

 

Section 11.11       Successors.  All agreements of the Company in this Indenture and the Securities shall bind its successors.  All agreements of the Trustee in this Indenture shall bind its successors.

 

Section 11.12       Multiple Originals.  The parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Indenture.  The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 11.13       Severability.  In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 11.14       No Adverse Interpretation of Other Agreements.  This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or any Subsidiary or any other Person.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 11.15       Table of Contents; Headings.  The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

 

Section 11.16       Force Majeure.  In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural

 

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catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

Section 11.17       USA PATRIOT ACT.  The parties hereto acknowledge that in accordance with Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001 (the “Patriot Act”), the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the Patriot Act.

 

[Remainder of Page Intentionally Left Blank; Signature Pages to Follow.]

 

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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

 

	
 
    	
FOSSIL GROUP, INC.,
    
	
 
    	
as Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, N.A.,
    
	
 
    	
as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to

Senior IndentureExhibit 10.1

 

STEADYMED LTD.

 

AMENDED AND RESTATED 2009 STOCK INCENTIVE PLAN

 

Approved by the Board of Directors of the Company on February 20, 2015

Approved by the shareholders of the Company on March 1, 2015

 

1.                                      PURPOSE OF THE PLAN AND EFFECTIVE DATES

 

1.1          The purpose of this Amended and Restated SteadyMed Ltd. 2009 Stock Incentive Plan (the “Plan”), is to assist SteadyMed Ltd., an Israeli company (the “Company”), or any Affiliate of the Company, which now exists or hereafter is organized or acquired by the Company, in attracting, motiving, retaining and rewarding employees, directors, officers, consultants, advisors, and any other person or entity whose services are considered valuable (collectively, the “Service Providers”) to continue as Service Providers, to increase their efforts on behalf of the Company or an Affiliate and to promote the success of the Company’s business, by providing such Service Providers with opportunities to acquire a proprietary interest in the Company by the issuance of Ordinary Shares of the Company, and by the grant of options to purchase Shares and awards of Restricted Shares (“Restricted Shares”), Restricted Share Units (“RSUs”) and other Share-based Awards pursuant to the Plan, subject to such rulings from the Israeli Income Tax Authorities (the “ITA”) as may be determined to be necessary or appropriate under Applicable Law. All capitalized terms used herein shall have the meanings assigned to them in Section 4 below, unless otherwise indicated.

 

1.2          The Plan was originally adopted by the Board of Directors of the Company on June 18, 2009, and the Plan as Amended and Restated was approved by the Board on February 20, 2015 in anticipation of the Company’s initial public offering. The amended and restated Plan shall take effect upon the date of its adoption by the Board and, with respect to Grantees who are not Israeli Grantees, the date of approval of the Plan by the Company’s shareholders in accordance with Company’s Articles of Association (the “Restatement Effective Date”).

 

1.3          The Plan contemplates the issuance of Awards by the Company, both as a private company and as a publicly traded company.

 

2.                                      TYPES OF AWARDS

 

The Plan is intended to enable the Company to issue Awards under varying tax regimes. The types of Awards that may be issued under the Plan include:

 

2.1          Awards subject to the provisions of Section 102 of the Ordinance, and all regulations and interpretations adopted thereunder, including the Income Tax Rules (Tax Benefits in Stock Issuance to Employees) 5763-2003 (the “Rules”) or such other rules published by the ITA (such Awards, “102 Awards”). 102 Awards may deemed Capital Gain Awards, Ordinary Income Awards or 102 Non-Trustee Options. The 102 Awards are subject to the approval, if required, of the ITA and receipt by the Company of all approvals thereof;

 

2.2          Awards subject to Section 3(9) of the Ordinance (“3(9) Awards”);

 

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2.3          Incentive Stock Options (“ISOs”) within the meaning of Section 422 of the Code, or the corresponding provision of any subsequently enacted United States federal tax statute, as amended from time to time, to be granted to Employees who are deemed to be residents of the U.S. for purposes of taxation;

 

2.4          Nonqualified Stock Options to be granted to Service Providers who are deemed to be residents of the U.S. for purposes of taxation; and

 

2.5          Other share-based Awards.

 

In addition to the issuance of Awards under the relevant tax regimes in the State of Israel and the United States of America, the Plan contemplates issuances to Grantees in other jurisdictions with respect to which the Committee is empowered to make the requisite adjustments in the Plan (including, without limitation, the adoption of sub-plans) and set forth the relevant conditions in the Company’s agreement with the Grantee in order to comply with the requirements of the tax regimes in any such jurisdictions.

 

3.             ELECTION OF THE ADMINISTRATOR.

 

With respect to Grantees resident in or subject to the tax regime of the State of Israel, the Administrator may elect from time to time the tax treatment which shall apply the Awards granted to such Grantees which shall be either Capital Gain Awards, 102 Ordinary Income Awards, as permitted by Applicable Law and shall notify all relevant authorities of such election (the “Election”). The Administrator shall be entitled to change such Election from and after the date 12 months from the end of the year in which the first grant was made in accordance with the previous Election or such other date as may be allowed by Applicable Law. For so long as an Election is in effect, all Trustee Stock Awards shall be issued as either 102 Capital Gain or as 102 Ordinary Income Awards in accordance with the Election then in effect.

 

4.                                      DEFINITIONS.

 

4.1 For purposes of this Plan, the following capitalized terms shall have the following meanings:

 

“Administrator” means the Committee appointed by the Board to administer the Plan, or the Board of the Company.

 

“Affiliate” has the meaning assigned thereto in Rule 405 of Regulation C under the Securities Act. For the purpose of Options granted pursuant to 102 Awards, “Affiliate” shall also mean an “employing company” within the meaning of Section 102(a) of the Ordinance.

 

“Applicable Law” means any applicable law, rule, regulation, statute, pronouncement, policy, interpretation, judgment, order or decree of any federal, provincial, state or local governmental, regulatory or adjudicative authority or agency, of any jurisdiction, and the rules and regulations of any stock exchange or trading system on which the Shares are then traded or listed.

 

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“Award” means any Restricted Share, Option or any other Share-based award, granted to a Grantee under the Plan and any Share issued pursuant to the exercise thereof.

 

“Award Agreement” shall mean the written agreement between the Company and a Grantee evidencing the terms and conditions of an individual Award grant, as further specified in this Plan.

 

“Board” means the Board of Directors of the Company.

 

“Cause” means (i) any action by a Grantee involving willful malfeasance or a willful breach of such a Grantee’s fiduciary duties in connection with such Grantee’s employment or engagement with the Company or with any Subsidiary; (ii) the conviction of a Grantee in a court of law of, or a guilty plea by the Grantee to, a felony or a fraud or any other similar act; (iii) any refusal to carry out a reasonable directive of the chief executive officer, the Board or the Grantee’s direct supervisor, which involves the business of the Company or its Subsidiaries and was capable of being lawfully performed; (iv) embezzlement of funds of the Company or its Subsidiaries; or (v) an act of moral turpitude, or any similar act, to the extent that such act causes or may cause injury to the reputation of the Company and/or to any of the Company’s Subsidiaries, all as determined by the Board; (vi) any other act or omission which, in the reasonable opinion of the Board, could adversely affect the financial results or prospects of the Company and/or any of the Company’s Subsidiaries or harm the business reputation of the Company and/or any of the Company’s Subsidiaries; (vii) any other circumstance deemed by Applicable Law to constitute termination for cause, including circumstances relieving an employer from the duty to pay severance pay to the Grantee; (viii) termination of a Grantee’s employment for cause in accordance with provisions of his or her employment agreement or engagement agreement, if any, with the Company or with the relevant Subsidiary or (ix) any breach of the Grantee’s fiduciary duties or duties of care of the Company; including without limitation disclosure of confidential information of the Company.

 

“Code” means the United States Internal Revenue Code of 1986, as amended.

 

“Committee” means a committee established by the Board to administer the Plan.

 

“Companies Law” means the Israel Companies Law-1999 and the regulations promulgated thereunder, all as amended from time to time.

 

“Consultant” means any person, other than an Employee, who is engaged by the Company and/or an Affiliate to render consulting, advisory or other services to the Company and/or an Affiliate.

 

“Controlling Party” has the meaning set forth in Section 32(9) of the Ordinance, either as of the date of an Award or as a result thereof.

 

“Disability” means (i) the inability of a Grantee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as determined by a medical doctor satisfactory to the Committee or

 

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(ii) if applicable, a “permanent and total disability” as defined in Section 22(e)(3) of the Code or Section 409A(a)(2)(c)(i) of the Code, as amended from time to time.

 

“Employee” means a person who is employed by the Company or any of its Affiliates, including, for the purpose of Section 102, an individual who is serving as an “office holder” (“Nose Misra” — as defined under the Companies Law), but excluding any Controlling Party. A person employed by the Company or any Affiliate shall not cease to be an Employee for the purposes of the Plan in the case of (i) any leave of absence approved by the Company or any Subsidiary or, (ii) transfers between locations of the Company or, (iii) transfer of employment between the Company, any Affiliate and/or any successor.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exercise Date” means the on which a Grantee exercises all or a portion of an Award.

 

“Exercise Period” means the period, commencing on the date of grant of an Option, during which an Option shall be exercisable, subject to any vesting provisions thereof and the termination provisions hereof.

 

“Exercise Price” means the exercise price for each Share covered by an Option.

 

“Fair Market Value” means, as of a particular date, the fair market value of one Ordinary Share as determined by the Administrator in its discretion, and in a manner consistent with Code Sections 409A and 422, or with the Ordinance, as applicable.

 

“Grantee” means a person who receives a grant of an Award under the Plan.

 

“Non-Employee” means a Consultant, adviser, Service Provider, Controlling Party or any other person, who is not an Employee under Applicable Law.

 

“Nonqualified Stock Option” means any Option granted to a Service Provider who is deemed to be a resident of the U.S. for purposes of taxation, which Option is not designated as, or does not meet the conditions for, an Incentive Stock Option.

 

“Options” means all options to purchase Shares granted as 102 Awards, 3(9) Awards, Incentive Stock Options and Non-Qualified Stock Options.

 

“Ordinance” means the Israeli Income Tax Ordinance (New Version) 1961, and the regulations promulgated thereunder, all as amended from time to time.

 

“Ordinary Shares” means the ordinary shares of the Company, nominal value NIS0.01 each.

 

“Parent” means any company (other than the Company), which now exists or is hereafter organized, (i) in an unbroken chain of companies ending with the Company if, at the time of granting an Award, each of the companies (other than the Company) owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain, or (ii) if applicable, as defined in Section 424(e) of the Code.

 

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“Retirement” means a Grantee’s retirement pursuant to applicable law or in accordance with the terms of any tax-qualified retirement plan maintained by the Company or any of its affiliates in which the Grantee participates.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended.

 

“Shares” means Ordinary Shares, par value NIS 0.01 of the Company, or shares of such other class of shares of the Company as shall be designated by the Board in respect of the relevant Award.

 

“Subsidiary” means any company (other than the Company), which now exists or is hereafter organized or acquired by the Company, (i) in an unbroken chain of companies beginning with the Company if, at the time of granting an Award, each of the companies other than the last company in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain, or (ii) if applicable, as defined in Section 424(f) of the Code.

 

“Ten Percent Shareholder” means a Grantee who, at the time an ISO is granted, owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or any Parent or Subsidiary.

 

“Trustee” means the trustee appointed by the Administrator, as the case may be, to hold certain Options and/or Shares (and, in relation with 102 Awards, approved by the Israeli tax authorities), if so appointed.

 

4.2 Other Defined Terms. The following terms shall have the meanings ascribed to them in the Sections set forth below:

 

	
Term
    	
 
    	
Section
    	
 
    
	
102 Awards
    	
 
    	
2.1   and 6.3
    	
 
    
	
102 Capital Gains Track Options
    	
 
    	
9.1
    	
 
    
	
102 Non-Trustee Options
    	
 
    	
6.3
    	
 
    
	
102 Ordinary Income Track Options
    	
 
    	
9.1
    	
 
    
	
102 Trustee Options
    	
 
    	
9.1
    	
 
    
	
3(9) Awards
    	
 
    	
2.2
    	
 
    
	
Company
    	
 
    	
1
    	
 
    
	
Disqualifying Disposition
    	
 
    	
11.7
    	
 
    
	
Election
    	
 
    	
3
    	
 
    
	
Eligible 102 Grantees
    	
 
    	
7.2
    	
 
    
	
ISOs
    	
 
    	
2.3
    	
 
    
	
ISO Shares
    	
 
    	
11.4
    	
 
    
	
ITA
    	
 
    	
1
    	
 
    
	
Market Stand-Off
    	
 
    	
19.1
    	
 
    
	
Merger/Sale
    	
 
    	
16.2
    	
 
    
	
Option Agreement
    	
 
    	
8.1
    	
 
    
	
Plan
    	
 
    	
1
    	
 
    
	
Required Holding Period
    	
 
    	
9.3
    	
 
    

 

5

 

	
Term
    	
 
    	
Section
    	
 
    
	
Restatement Effective Date
    	
 
    	
1.2
    	
 
    
	
Restricted Period
    	
 
    	
13.3
    	
 
    
	
Restricted Share Agreement
    	
 
    	
13
    	
 
    
	
Restricted Shares 
    	
 
    	
1
    	
 
    
	
RSUs
    	
 
    	
14
    	
 
    
	
RSU Agreement
    	
 
    	
14.1
    	
 
    
	
Rules
    	
 
    	
2.1
    	
 
    
	
Service Provider(s)
    	
 
    	
1
    	
 
    
	
Successor Corporation
    	
 
    	
16.2.1
    	
 
    
	
Vesting Schedule
    	
 
    	
8.4
    	
 
    
	
Withholding Obligations
    	
 
    	
20.3
    	
 
    

 

5.                                      AUTHORIZED SHARES.

 

5.1          Shares Subject to the Plan. Immediately prior to the Restatement Effective Date, there were 113,884 Shares reserved and available for the issuance of Awards under the Plan. In addition, the reserved pool under the Plan will be automatically increased annually January 1st, 2019 through (and including) January 1, 2026 by a number of Shares equal to the lower of (i) such an amount of Ordinary Shares reflecting an amount of four percent (4%) of the total of Shares outstanding on December 31 of the preceding year, subject to adjustment due to certain changes as provided under the Plan, which shall be ratified by the Board, or (ii) a number of Shares determined by the Board, if so determined by the Board prior to the January 1 on which the increase would otherwise occur. The class of Shares shall be designated by the Board (or the Committee) with respect to each Award and the notice of grant shall reflect such designation.

 

5.2          Source of Shares. Shares issuable under the Plan will be Shares of authorized but unissued or reacquired Ordinary Shares, including on and after the date the Company’s Shares become listed on a national exchange, Shares repurchased by the Company on the open market or otherwise.

 

5.3          Other Share Limits.

 

5.3.1       ISO Limit. A maximum of 341,652 Shares may be issued under the Plan pursuant to the exercise of ISOs.

 

5.3.2       Code Section 162(m) Limits. At such time as the Company becomes subject to the limits of Section 162(m) of the Code, the following limits shall apply:

 

(i)            A maximum of 100,000 Shares subject to Options and other Awards whose value is determined by reference to an increase over an exercise or strike price of at least 100% of the Fair Market Value on the date the Share-based Award is granted may be granted to any one Grantee in any one calendar year.

 

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(ii)           A maximum of 100,000 Shares that are performance-based full value awards (such as Restricted Shares or RSUs) may be granted to any one Grantee during any one calendar year (whether the grant, vesting or exercise is contingent upon the attainment of performance goals during the performance period).

 

5.4          Expiration. Any Share underlying an Award granted hereunder that has expired or was cancelled or terminated or forfeited for any reason without having been exercised shall be automatically, and without any further action on the part of the Company or any Grantee, returned to the “pool” of reserved Shares hereunder and shall again be available for grant for the purposes of the Plan (unless the Plan shall have been terminated) or unless the Committee or the Board determines otherwise.

 

5.5          Increase or Decrease in Reserved Shares; Termination of the Plan. Notwithstanding the other provisions of this Section 5, the Board may, subject to any other approvals required under any Applicable Law, increase or decrease the number of Shares to be reserved under the Plan, provided that the number of Shares so reserved shall not be lower than the total obligations of the Company with respect to Grantees hereunder. Such Shares may, in whole or in part, be authorized but unissued Shares, or Shares that shall have been or may be reacquired by the Company (to the extent permitted pursuant to the Companies Law) or by a trustee appointed by the Board under the relevant provisions of the Ordinance, the Companies Law or any equivalent provision. Any Shares that are not subject to outstanding Awards at the termination of the Plan shall cease to be reserved for the purpose of the Plan, but until termination of the Plan, the Company shall at all times reserve a sufficient number of Shares to meet the requirements of the Plan.

 

6.                                      ADMINISTRATION.

 

6.1          Procedure. The Plan shall be administered by the Administrator. In the event that an action necessary for the administration of the Plan is required under law to be taken by the Board, then such action shall be so taken by the Board. In any such event, all references herein to the Committee shall be construed as referenced to the Board.

 

6.2          Powers of the Administrator. Subject to the terms and conditions of the Plan, and subject to the approval of any relevant authorities and Applicable Law, the Administrator shall have the authority, in its discretion:

 

(i)            to select the Service Providers to whom Awards may from time to time be granted hereunder, and to grant said Service Providers the Awards;

 

(ii)           to determine, from time to time, the type of Awards to be granted to Service Providers;

 

(iii)         to approve forms of the Award Agreements (which need not be identical) for use under the Plan;

 

(iv)          to prescribe the terms and conditions (which need not be identical) of Awards granted under the Plan to such persons, including, without limitation, the Vesting Schedule and Exercise Price;

 

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(v)           to exercise such powers and to perform such acts as are deemed necessary or expedient to promote the best interests of the Company with respect to the Plan, including but not limited to prescribing amending and rescinding any provisions or rules related to the Plan;

 

(vi)          to amend any outstanding Award and to accelerate the vesting or extend the exercisability of any Award and to waive conditions or restrictions on any Award it shall deem appropriate, to the extent consistent with Applicable Law; however, the authority granted hereunder to change or modify existing terms of an Award shall not adversely affect the Grantee thereof, and with respect to an Israeli Grantee, such modification of terms may require the approval of the ITA prior to such having effect.

 

(vii)        to allow Grantees to satisfy withholding tax obligations by electing to have the Company, if permitted under Applicable Law, withhold from the Award Shares to be issued upon exercise of an Award that number of Award Shares having a value equal to the relevant withholding tax obligation. The value of the Award Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined or as determined under Applicable Law. All elections by Grantees to have Award Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable and after consultation with the Company’s counsel, and with respect to Israeli Grantees, such withholding may require obtaining an approval from the ITA; and

 

(viii)       to construe and interpret the terms of the Plan, the Award Agreements and Awards.

 

6.3          Notice of Grants; Authorization of Shares. Grants of Awards shall be made pursuant to written notice to Grantees setting forth the terms of the Award. Such notice shall designate the type of Award as one of the following: (i) a 102 Award granted to a Trustee (either as a 102 Award (capital gain track) with Trustee or a 102 Award (ordinary income track) with Trustee), (ii) a 102 Award without a Trustee (“102 Non-Trustee Option” and collectively with subsection (i) above, “102 Awards”), (iii) a 3(9) Award, (iv) an ISO, (v) a Nonqualified Stock Option, or (vi) any other type of Award.

 

6.4          Effect of Administrator’s Decision. All decisions, determination and interpretations of the Administrator, Committee or Board shall be final and binding on all Grantees of any Awards under the Plan, unless otherwise determined by the Board. No member of the Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award granted hereunder.

 

7.                                     ELIGIBILITY.

 

7.1          Awards may be granted to Service Providers of the Company or any Affiliate thereof, taking into account the qualification under each tax regime pursuant to which such Awards are granted. A person who has been granted an Award hereunder may be granted additional Awards, if the Committee so determines, subject to the limitations herein. Awards shall be granted at the sole discretion of the Committee.

 

7.2          Subject to Applicable Law, 102 Awards may not be granted to a Controlling Party and may only be granted to Employees, including officers and directors, of the Company or any

 

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Affiliate thereof, who are Israeli residents (“Eligible 102 Grantees”). Awards to Eligible 102 Grantees in Israel shall be 102 Awards. Eligible 102 Grantees may receive only 102 Awards, which may either be grants to a Trustee or grants as 102 Non-Trustee Option. Unless otherwise permitted by the Ordinance and the Rules, no 102 Awards to a Trustee may be granted until the expiration of thirty (30) days after the requisite filings under the Ordinance and the Rules have been appropriately made with the ITA.

 

7.3          Subject to Applicable Law, Non-Employees who are Israeli residents and are not Eligible 102 Grantees may only be granted 3(9) Awards under the Plan.

 

8.                                      TERMS AND CONDITIONS OF OPTIONS.

 

8.1          General. Each Option granted pursuant to the Plan shall be evidenced by a written agreement between the Company and the Grantee or a written notice delivered by the Company and accepted by the Grantee (the “Option Agreement”), in such form and containing such terms and conditions as the Committee shall from time to time approve, which Option Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Option Agreement or other terms of the Plan.

 

8.2          Type of Option; Number of Shares. Each Option Agreement shall specifically state the type of Option granted thereunder and whether it constitutes an Incentive Stock Option, Nonqualified Stock Option, 102 Option Award and the relevant track, 3(9) Option Award, or otherwise, and each Option Agreement shall state the number of Shares covered by the Option.

 

8.3          Exercise Price. Each Option Agreement shall state the Exercise Price.

 

8.3.1       In the case of an Incentive Stock Option, the Exercise Price shall not be less than 100% of the Fair Market Value of the Shares covered by the Option on the date of grant or such other price as may be required pursuant to the Code. For an Incentive Stock Option granted to any Ten Percent Shareholder, the Exercise Price shall be no less than 110% of the Fair Market Value of the Shares covered by the Option on the date of grant.

 

8.3.2       The Exercise Price of a Nonqualified Stock Option shall not be less than 100% of the Fair Market Value of the Shares on the date of grant unless the Committee specifically indicates that the Option will have a lower Exercise Price and the Option complies with Section 409A of the Code.

 

8.3.3       With respect to other Grantees who are non-U.S. Grantees and non-Israeli Grantees, in the case of any other Option, the per share Exercise Price shall be equal to the Fair Market Value of the Shares on the date of grant, or such other price as shall be determined by the Committee, provided, however, that in no event shall the Exercise Price of an Option be less than the par value of the shares for which such Option is exercisable.

 

8.3.4       With respect to Israeli Grantees, the exercise price shall be determined by the Committee

 

8.3.5       Subject to Section 3 and to the foregoing, the Committee may reduce the Exercise Price of any outstanding Option, provided however that with respect to Israeli Grantees,

 

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such reduction of the Exercise Price of any outstanding Option may require obtaining an approval from the ITA. The Exercise Price shall also be subject to adjustment as provided in Section 16 hereof with respect to changes in capitalization of the Company. This Section shall not apply to an Option granted pursuant to assumption of, or substitution for, another option in a manner that complies with Code Section 424(a), whether or not the Option is an Incentive Stock Option.

 

8.4          Vesting of Options. Each Award Agreement shall provide the schedule according to which such Awards shall vest and become exercisable (the “Vesting Schedule”). The Vesting Schedule for the Awards will be determined by the Administrator, provided that (to the extent permitted under Applicable Law) the Administrator, in its absolute discretion, shall have the authority to accelerate the vesting of all or a portion of any outstanding Award at such time and under such circumstances as it, in its sole discretion, deems appropriate. It is clarified that the Vesting Schedule may contain vesting according to performance goals or attainment of certain milestones or any other qualification as determined by the Administrator. Unless the Board of Directors or the Committee provides otherwise, vesting of Options granted hereunder shall be suspended during any unpaid leave of absence, other than in the case of any (a) leave of absence which was pre-approved by the Company for purposes of continuing the vesting of Options, or (b) transfers between locations of the Company or between the Company, any Affiliate, or any respective successor thereof.

 

8.5          Term. Each Award Agreement shall provide the date on which the Award shall lapse and no longer be exercisable. Subject to the Vesting Schedule, and unless a different term is provided in the Award Agreement, Awards may be exercised into Award Shares during ten years from the Date of Grant, subject to earlier termination as otherwise provided in this Section 8.

 

8.5.1       Except as provided herein, an Option may not be exercised unless the Grantee is then in the employ of or maintaining a director, officer, consultant, advisor or supplier relationship with the Company or a Subsidiary or Affiliate thereof or, in the case of an Incentive Stock Option, a company or a parent or subsidiary company of such company issuing or assuming the Option in a transaction to which Section 424(a) of the Code applies, and unless the Grantee has remained continuously so employed or in the director, officer, supplier, consultant, or advisor relationship since the date of grant of the Option. In the event that the employment or director, officer or consultant, advisor or supplier relationship of a Grantee shall terminate (other than by reason of death, Disability or Retirement), all Options of such Grantee that are vested and exercisable at the time of such termination may, unless earlier terminated in accordance with their terms, be exercised within up to three (3) months after the date of such termination (or such different period as the Committee shall prescribe); provided, however, that if the Company (or the Subsidiary or Affiliate, when applicable) shall terminate the Grantee’s employment or service for Cause (as defined below) or if, whether or not the Grantee’s employment is terminated by either party, circumstances arise or are discovered with respect to the Grantee that would have constituted Cause for termination of his or her employment or service, all Options theretofore granted to such Grantee (whether vested or not) shall, to the extent not theretofore exercised, terminate on the date of such termination (or on which such circumstances arise or are discovered, as the case may be) unless otherwise determined by the Committee.

 

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8.5.2       In the case of a Grantee whose principal employer is a Subsidiary or Affiliate, the Grantee’s employment shall also be deemed terminated for purposes of this Section 8 as of the date on which such principal employer ceases to be a Subsidiary or Affiliate. Notwithstanding anything to the contrary, the Committee, in its absolute discretion, may, on such terms and conditions as it may determine appropriate, extend the periods for which the Options held by any individual may continue to vest and be exercisable; provided, that such Options may lose their status as Incentive Stock Options under applicable law and be deemed Nonqualified Stock Options as a result of the modification of the Option to extend the exercise period and/or in the event that the Option is exercised beyond the later of: (i) three months after the date of termination of the employment relationship; or (ii) the applicable period applicable with respect to a termination of the employment relationship because of the death, Disability or Retirement of Grantee.

 

8.6          Death, Disability or Retirement of Grantee. If a Grantee shall die while employed by, or performing service for, the Company or a Subsidiary, or within the three-month period after the date of termination of such Grantee’s employment or service (or within such different period as may be provided in an Award Agreement), or if the Grantee’s employment or service shall terminate by reason of Disability, all Options theretofore granted to such Grantee that are exercisable at the time of Death or Disability, may (unless earlier terminated in accordance with their terms), be exercised by the Grantee or by the Grantee’s estate or by a person who acquired the right to exercise such Options by bequest or inheritance or otherwise by result of death or Disability of the Grantee, at any time within one (1) year after the death or Disability of the Grantee (or such different period as the Committee shall prescribe). In the event that an Option granted hereunder shall be exercised by the legal representatives of a deceased or former Grantee, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof to the satisfaction of the Administrator at its discretion, of the right of such legal representative to exercise such Option. In the event that the employment or service of a Grantee shall terminate on account of such Grantee’s Retirement, all Options of such Grantee that are exercisable at the time of such Retirement may, unless earlier terminated in accordance with their terms, be exercised at any time within the three (3) month period after the date of such Retirement (or such different period as the Committee shall prescribe).

 

8.7          Manner of Exercise. An Option may be exercised, as to any or all Shares as to which the Option has become vested and exercisable, by written notice delivered in person or by mail to the Secretary of the Company or to such other person as determined by the Committee, specifying the number of Shares with respect to which the Option is being exercised, accompanied by payment of the Exercise Price for such Shares in the manner specified in the following sentence. The Exercise Price shall be paid in full with respect to each Share, at the time of exercise, and as permitted under the applicable Option Agreement, either in (i) cash, (ii) if the Company’s shares are publicly traded, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company or the Trustee, or (iii) in such other manner as the Committee shall determine, which may include procedures for cashless exercise. Notwithstanding the abovementioned, with respect to Israeli Grantees, the exercise price shall be paid in cash, unless permitted otherwise by the Committee. In any event, the Company may 

 

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require the payment of any tax liabilities in connection with the exercise of the Option, including any amounts to be withheld by the Company, in cash, and to set other terms and condition with respect to the exercise of the Options or the issuance of Shares on account thereof, at it deems necessary to comply with any such tax liability.

 

8.8          Israeli Index Base for 102 Awards. Each 102 Award will be subject to the Israeli index base of the Value of Benefit, as defined in Section 102(a) of the Ordinance, as determined by the Committee in its discretion, pursuant to the Rules, from time to time. In the event that the Company effects a public offering of its shares in any stock exchange outside of Israel, the Committee may amend retroactively the Israeli index base, pursuant to the Rules, without the Grantee’s consent.

 

8.9          Securities Law Restrictions. Except as otherwise provided in the applicable Option Agreement or other agreement between the Service Provider and the Company, if the exercise of an Option following the termination of the Service Provider’s employment or service (other than for Cause) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of a period of three months after the termination of the Service Provider’s employment or service during which the exercise of the Option would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option as set forth in the Option Agreement. In addition, unless otherwise provided in a Participant’s Option Agreement, if the sale of any Shares received upon exercise of an Option following the termination of the Service Provider’s employment or service (other than for Cause) would violate the Company’s insider trading policy, then the Option shall terminate on the earlier of (i) the expiration of a period equal to the applicable post-termination exercise period after the termination of the Service Provider’s employment or service during which the exercise of the Option would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option as set forth in the applicable Option Agreement.

 

9.                                      102 OPTION AWARDS.

 

9.1          Options granted pursuant to this Section are intended to be granted pursuant to Section 102 of the Ordinance pursuant to either (a) Section 102(b)(2) (or Section 102(b)(3) in the event that the Company effects an initial public offering of its shares) thereof as capital gains track options (“102 Capital Gains Track Options”), or (b) Section 102(b)(1) thereof as ordinary income track options (“102 Ordinary Income Track Options”, and together with 102 Capital Gains Track Options, “102 Trustee Options”). 102 Trustee Options shall be granted subject to the following special terms and conditions contained in this Section 9, the general terms and conditions specified in Section 8 hereof and other provisions of the Plan, except for any provisions of the Plan applying to Options under different tax laws or regulations.

 

9.2          Each 102 Trustee Option will be deemed granted on the date of the resolution of the Committee with respect to such grant, unless determined otherwise by the Committee.

 

9.3          Each 102 Trustee Option, each Share issued pursuant to the exercise of any 102 Trustee Option, and any rights granted thereunder, including bonus shares, shall be allotted and issued to and registered in the name of the Trustee and shall be held in trust for the benefit of the

 

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Grantee for a period of not less than the requisite period prescribed by the Ordinance and the Rules or such longer period as set by the Committee (the “Required Holding Period”). In the event that the requirements under Section 102 to qualify an Option as a 102 Trustee Option are not met, then the Option may be treated as a 102 Non-Trustee Option, all in accordance with the provisions of Section 102 and the Rules. After termination of the Required Holding Period, the Trustee may release such 102 Trustee Option and any such Shares, provided that (i) the Grantee has paid any applicable taxes due pursuant to the Ordinance and presented appropriate documentation requested by the Trustee, at its sole discretion or (ii) the Trustee and/or the Company and/or its Affiliate withholds any applicable taxes due pursuant to the Ordinance arising from the 102 Trustee Options and/or any Shares allotted or issued upon exercise of such 102 Trustee Options. The Trustee shall not release any 102 Trustee Options or Shares issued upon exercise thereof prior to the payment in full of the Grantee’s tax liabilities arising from such 102 Trustee Options and/or Shares or the withholding referred to in (ii) above. It is clarified that the Company may suspend any registration of Shares to be issued under the name of the Grantee at the Company’s shareholder register upon exercise of an Option, until the satisfaction in full of all tax liabilities of the Grantee or the Company in connection therewith.

 

9.4          Each 102 Trustee Option shall be subject to the relevant terms of the Ordinance and the Rules, which shall be deemed an integral part of the 102 Trustee Option and shall prevail over any term contained in the Plan or Option Agreement that is not consistent therewith. Any provision of the Ordinance, the Rules and any approvals by the Income Tax Commissioner not expressly specified in the Plan or Option Agreement that, as determined by the Committee, are necessary to receive or maintain any tax benefit pursuant to Section 102 shall be binding on the Grantee. The Grantee granted a 102 Trustee Option shall comply with the Ordinance and the terms and conditions of the Trust Agreement entered into between the Company and the Trustee. The Grantee agrees to execute any and all documents that the Company and/or its Affiliates and/or the Trustee may reasonably determine to be necessary in order to comply with the Ordinance and the Rules.

 

9.5          During the Required Holding Period, the Grantee shall not release from trust or sell, assign, transfer or give as collateral, the Shares issuable upon the exercise of a 102 Trustee Option and/or any securities issued or distributed with respect thereto, until the expiration of the Required Holding Period. Notwithstanding the above, if any such sale or release occurs during the Required Holding Period it will result in adverse tax consequences to the Grantee under Section 102 of the Ordinance and the Rules, which shall apply to and shall be borne solely by such Grantee. Subject to the foregoing, the Trustee may, pursuant to a written request from the Grantee, release and transfer such Shares to a designated third party, provided that both of the following conditions have been fulfilled prior to such release or transfer: (i) payment has been made to the ITA of all taxes required to be paid upon the release and transfer of the Shares, and confirmation of such payment has been received by the Trustee and (ii) the Trustee has received written confirmation from the Company that all requirements for such release and transfer have been fulfilled according to the terms of the Company’s corporate documents, the Plan, the Option Agreement and any Applicable Law.

 

9.6          If a 102 Trustee Option is exercised during the Required Holding Period, the Shares issued upon such exercise shall be issued in the name of the Trustee for the benefit of the Grantee. If such 102 Trustee Option is exercised after the expiration of the Required Holding 

 

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Period, the Shares issued upon such exercise shall, at the election of the Grantee, either (i) be issued in the name of the Trustee, or (ii) be issued to the Grantee, provided that the Grantee first complies with all applicable provisions of the Plan and all taxes with respect thereto shall have been fully paid to the ITA.

 

9.7          The foregoing provisions of this Section relating to 102 Trustee Options shall not apply with respect to 102 Non-Trustee Options, which shall, however, be subject to the relevant provisions of Section 102 and the Rules.

 

9.8          If requested by the Trustee, the Grantee will sign an undertaking to release the Trustee from any liability with respect to any action or decision duly taken and executed in good faith by the Trustee in relation to the Plan, or any 102 Trustee Option or Share granted to such Grantee thereunder.

 

10.                               3(9) OPTION AWARD.

 

10.1        Options intended to constitute 3(9) Option Awards shall be granted subject to the general terms and conditions specified in this Section 10 hereof and other provisions of the Plan, except for any provisions of the Plan applying to Options under different tax laws or regulations.

 

10.2        To the extent required by the Ordinance or the ITA or otherwise deemed by the Committee prudent or advisable, the 3(9) Option Awards granted pursuant to the Plan shall be issued to a Trustee nominated by the Committee in accordance with the provisions of the Ordinance. In such event, the Trustee shall hold such Options in trust, until exercised by the Grantee, pursuant to the Company’s instructions from time to time as set forth in a trust agreement, which will be entered into between the Company and the Trustee. If determined by the Board of Directors or the Committee, and subject to such trust agreement the Trustee shall be responsible for withholding any taxes to which a Grantee may become liable upon the exercise of Options.

 

11.                               INCENTIVE STOCK OPTIONS.

 

Incentive Stock Options shall be granted subject to the following special terms and conditions, the general terms and conditions specified in Section 11 hereof and other provisions of the Plan, except for any provisions of the Plan applying to Options under different tax laws or regulations:

 

11.1        Eligibility for Awards. Incentive Stock Options may be granted only to Employees of the Company, or to Employees of a Parent or Subsidiary corporation thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code).

 

11.2        Value of Shares. The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which all ISOs granted under the Plan and all other option plans of any Parent or Subsidiary corporation become exercisable for the first time by each Grantee during any calendar year shall not exceed USD $100,000 with respect to such Grantee. To the extent that the aggregate Fair Market Value of Shares with respect to which the ISOs are exercisable for the first time by any Grantee during any calendar years exceeds USD $100,000, such Options shall be treated as Nonqualified Stock Options. The 

 

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foregoing shall be applied by taking Options into account in the order in which they were granted, with the Fair Market Value of any Share to be determined at the time of the grant of the Option. Any portion of an ISO exceeding the USD $100,000 limitation will be treated as a Nonqualified Stock Option.

 

11.3        Ten Percent Shareholder. In the case of an ISO granted to a Ten Percent Shareholder, (i) the Exercise Price shall not be less than 110% of the Fair Market Value of the Shares on the date of grant of such ISO, and (ii) the Exercise Period shall not exceed five years from the date of grant of such ISO.

 

11.4        Approval. The status of any ISO Shares shall be subject to approval of the Plan by the Company’s shareholders, such approval to be provided 12 months before or after the date of adoption of the restated Plan by the Board of Directors.

 

11.5        Exercise Following Termination. Notwithstanding anything else in the Plan to the contrary, ISOs that are not exercised within three months following termination of Grantee’s employment in the Company or its Parent or Subsidiary corporations, or within one year in case of termination of Grantee’s employment in the Company or its Parent or Subsidiary corporations due to a Disability (within the meaning of section 22(e)(3) of the Code), shall be deemed to be Nonqualified Stock Options.

 

11.6        Sale of ISO Shares; Notice to Company of Disqualifying Disposition. If a Grantee disposes of Shares received pursuant to the exercise of an ISO (“ISO Shares”) within two years from the date of grant, or within one year after the transfer of such ISO Shares to him, the Incentive Stock Options shall be deemed to be Nonqualified Stock Options. Each Grantee who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Grantee makes a Disqualifying Disposition of any ISO Shares. A “Disqualifying Disposition” is any disposition (including any sale) of such ISO Shares before the later of (i) two years after the date the Grantee was granted the Incentive Stock Option, or (ii) one year after the date the Grantee acquired Shares by exercising the Incentive Stock Option. If the Grantee dies before such ISO Shares are sold, these holding period requirements do not apply and no disposition of the ISO Shares will be deemed a Disqualifying Disposition.

 

12.                               NONQUALIFIED STOCK OPTIONS.

 

Nonqualified Stock Options shall be subject to the general terms and conditions specified in this Section 12 hereof and other provisions of the Plan, except for any provisions of the Plan applying to Options under different tax laws or regulations. Nonqualified Stock Options may not be granted to Service Providers who are providing services only to a “parent” of the Company, as such term is defined in Rule 405 of Regulation C under the Securities Act, unless the Shares underlying such Awards are treated as “service recipient stock” under Section 409A of the Code because the Awards are granted pursuant to a corporate transaction (such as a spin off transaction) or unless such Awards comply with the distribution requirements of Section 409A of the Code.

 

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13.          RESTRICTED SHARES.

 

Subject to the approval of the ITA with respect to the grant of Restricted Shares to Israeli Grantees, and other approvals from the ITA as the Administrator may determine to be necessary or appropriate under Applicable Law, the Committee may award Restricted Shares to any eligible Grantee, including under Section 102 of the Ordinance. Each Award of Restricted Shares under the Plan shall be evidenced by a written agreement between the Company and the Grantee (the “Restricted Share Agreement”), in such form as the Committee shall from time to time approve. The Restricted Share Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Agreement:

 

13.1        Number of Shares and Purchase Price. Each Restricted Share Agreement shall state the number of Shares covered by an Award. Each Restricted Share Agreement may state an amount of purchase price to be paid by the Grantee, if any, in consideration for the issuance of the Restricted Shares and the terms of payment thereof, which may include, payment by issuance of promissory notes or other evidence of indebtedness on such terms and conditions as determined by the Committee.

 

13.2        Vesting. Each Restricted Share Agreement shall provide the vesting schedule for the Restricted Shares as determined by the Committee, provided that (to the extent permitted under Applicable Law) the Committee shall have the authority to determine the vesting schedule and accelerate the vesting of any outstanding Restricted Share at such time and under such circumstances as it, in its sole discretion, deems appropriate.

 

13.3        Restrictions. Restricted Shares may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, until such restricted shares shall have vested (the period from the date of the Award until the date of vesting being referred to herein as the “Restricted Period”). The Committee may also impose such additional or alternative restrictions and conditions on the Restricted Shares, as it deems appropriate, including the satisfaction of performance criteria. Such performance criteria may include, but are not limited to, sales, earnings before interest and taxes, return on investment, earnings per share, any combination of the foregoing or rate of growth of any of the foregoing, as determined by the Committee. Certificates for shares issued pursuant to Restricted Share Awards shall bear an appropriate legend referring to such restrictions, and any attempt to dispose of any such shares in contravention of such restrictions shall be null and void and without effect. Such certificates may, if so determined by the Committee, be held in escrow by an escrow agent appointed by the Committee, or, if a Restricted Share Award is made pursuant to Section 102, by the Trustee. In determining the Restricted Period of an Award the Committee may provide that the foregoing restrictions shall lapse with respect to specified percentages of the awarded Restricted Shares on successive anniversaries of the date of such Award. To the extent required by the Ordinance or the ITA, the Restricted Shares issued pursuant to Section 102 of the Ordinance shall be issued to the Trustee in accordance with the provisions of the Ordinance and the Restricted Shares shall be held for the benefit of the Grantee for such period as may be required by the Ordinance.

 

13.4        Adjustment of Performance Goals. The Committee may adjust performance goals to take into account changes in law and accounting and tax rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the inclusion or the exclusion of the impact of extraordinary or unusual items, events or circumstances. The

 

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Committee also may adjust the performance goals by reducing the amount to be received by any Grantee pursuant to an Award if and to the extent that the Committee deems it appropriate.

 

13.5        Forfeiture. Subject to such exceptions as may be determined by the Committee, if the Grantee’s continuous employment with the Company or any Subsidiary or Affiliate shall terminate for any reason prior to the expiration of the Restricted Period of an Award or prior to the payment in full of the purchase price of any Restricted Shares with respect to which the Restricted Period has expired, any Shares remaining subject to vesting or with respect to which the purchase price has not been paid in full, shall thereupon be forfeited and shall be deemed “Dormant Shares” (as defined in the Companies Law), subject to all Applicable Laws. Upon forfeiture of Restricted Shares, the Grantee shall have no further rights with respect to such Restricted Shares.

 

13.6        Ownership. During the Restricted Period the Grantee shall possess applicable incidents of ownership of such Restricted Shares, including the right to vote and receive dividends with respect to such Shares. All distributions, if any, received by a Grantee with respect to Restricted Shares as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original Award.

 

13.7        Dividends. Distribution of dividends by the Company with respect to Restricted Shares shall be made according to Applicable Law and/or ITA instructions. All dividends shall be held by the Trustee until the lapse of the Restricted Period. It is clarified that the Trustee shall be entitled to offset any tax liability of the Grantee with respect to the Restricted Shares out of any dividend held so held in trust.

 

14.                               RESTRICTED SHARE UNITS.

 

Subject to the approval of the ITA with respect to the grant of Restricted Share Units to Israeli Grantees, and other approvals from the ITA as the Administrator may determine to be necessary or appropriate under Applicable Law, the Committee may award Restricted Share Units (“RSUs”) to any eligible Grantee, including under Section 102 of the Ordinance, as follows:

 

14.1        An RSU is an Award covering a number of Shares that is settled by issuance of those Shares. Each grant of RSUs shall be evidenced by a written agreement between the Company and the Grantee (the “RSU Agreement”), in such form as the Committee shall from time to time approve, which need not be identical for all Grantees. Other than the par value of the Shares, no payment of cash shall be required as consideration for RSUs. RSUs may be granted in consideration of a reduction in the recipient’s other compensation.

 

14.2        Each RSU Agreement shall specify its term and any conditions on the time or times for vesting and settlement, and provide for expiration prior to the end of its term in the event of termination of employment or service providing to the Company, and may provide for earlier settlement in the event of the Grantee’s death, Disability or other events

 

14.3        The Committee may impose additional or alternative restrictions and conditions on the RSUs, as it deems appropriate, including the satisfaction of performance criteria. Such performance criteria may include, but are not limited to, sales, earnings before interest and taxes,

 

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return on investment, earnings per share, any combination of the foregoing or rate of growth of any of the foregoing, as determined by the Committee. The Committee may adjust performance goals to take into account changes in law and accounting and tax rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the inclusion or the exclusion of the impact of extraordinary or unusual items, events or circumstances. The Committee also may adjust the performance goals by reducing the amount to be received by any Grantee pursuant to an Award if and to the extent that the Committee deems it appropriate.

 

14.4        Settlement of vested RSUs shall be made in the form of Shares. Distribution to a Grantee of Shares upon settlement of vested RSUs can be deferred to a date after settlement as determined by the Committee. The number of deferred Shares may be increased by an interest factor or by dividend equivalents. Until the grant of RSUs is settled, the number of such RSUs shall be subject to adjustment pursuant hereto, and no voting or dividend rights as a shareholder shall exist prior to the actual issuance of Shares in the name of the Grantee.

 

14.5        Notwithstanding anything to the contrary set forth herein, any RSUs granted under the Plan that are not exempt from the requirements of Section 409A of the Code shall contain such restrictions or other provisions so that such RSUs will comply with the requirements of Section 409A of the Code.

 

15.                               OTHER SHARE OR SHARE-BASED AWARDS.

 

The Committee may grant other Awards under the Plan pursuant to which Shares (which may, but need not, be Restricted Shares pursuant to Section 13 hereof), cash (in settlement of Share-based Awards) or a combination thereof, are or may in the future be acquired or received, or Awards denominated in stock units, including units valued on the basis of measures other than market value. The Committee may also grant stock appreciation rights without the grant of an accompanying option, which rights shall permit the Grantees to receive, at the time of any exercise of such rights, cash equal to the amount by which the Fair Market Value of all Shares in respect to which the right was granted exceeds the exercise price thereof. The Committee may grant to Grantees (including Employees) the opportunity to purchase Shares of the Company in connection with any public offerings of the Company’s securities, which may be deemed to be an Award under the terms of the Plan. Such other Share-based Awards may be granted alone, in addition to, or in tandem with any Award of any type granted under the Plan and must be consistent with the purposes of the Plan.

 

16.                               ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

 

16.1        General. In the event of a subdivision of the outstanding share capital of the Company, any payment of a stock dividend (distribution of bonus shares), a recapitalization, a reorganization (which may include a combination or exchange of shares), a consolidation, a stock split, a reverse stock split, a spin-off or other corporate divestiture or division, a reclassification or other similar occurrence, the Committee shall make such adjustments as determined by the Committee to be appropriate in order to adjust (i) the number of Shares available for grants of Awards, (ii) the number of Shares covered by outstanding Awards, and (iii) the exercise price per share covered by any Award; provided, however, that any fractional shares resulting from such adjustment shall be rounded down to the nearest whole share and that

 

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the Company shall have no obligation to make any cash or other payment with respect to such fractional shares.

 

16.2        Merger and Sale of Company. In the event of (i) a sale of all or substantially all of the assets of the Company; or (ii) a sale (including an exchange) of all or substantially all of the shares of the Company, or an acquisition by a shareholder of the Company or by an Affiliate of such shareholder, of all the shares of the Company held by other shareholders or by other shareholders who are not Affiliated with such acquiring party; (iii) a merger, consolidation, amalgamation or like transaction of the Company with or into another corporation; (iv) a scheme or arrangement for the purpose of effecting such sale, merger or amalgamation; or (v) such other transaction or set of circumstances that is determined by the Committee, in its discretion, to be a transaction having a similar effect (all such transactions being herein referred to as a “Merger/Sale”), then, without the Grantee’s consent and action and without any prior notice requirement:

 

16.2.1     Unless otherwise determined by the Committee in its sole and absolute discretion, any Award then outstanding shall be assumed or an equivalent Award shall be substituted by such successor corporation of the Merger/Sale or any Parent or Affiliate thereof as determined by the Board in its discretion (the “Successor Corporation”), under substantially the same terms as the Award. For the purposes of this Section, an Award shall be considered assumed if, following a Merger/Sale, the Award confers on the holder thereof the right to purchase or receive, for each Share underlying an Award immediately prior to the Merger/Sale, either (i) the consideration (whether stock, cash, or other securities or property) distributed to or received by holders of Shares in the Merger/Sale for each Share held on the effective date of the Merger/Sale (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares), which may be subject to vesting and other terms as determined by the Committee in its discretion, or (ii) regardless of the consideration received by the holders of Shares in the Merger/Sale, solely shares (or their equivalent) of the Successor Corporation at a value to be determined by the Committee in its discretion, which may be subject to vesting and other terms as determined by the Committee in its discretion.  The foregoing shall not limit the Committee’s authority to determine, in its sole discretion, that in lieu of such assumption or substitution of Awards for Awards of the Successor Corporation, such Award will be substituted for any other type of asset or property, including under this Section.

 

16.2.2     In the event that the Awards are not assumed or substituted by an equivalent Award, then the Committee may (but shall not be obligated to), in lieu of such assumption or substitution of the Award and in its sole discretion, (i) provide for the Grantee to have the right to exercise the Award, or otherwise for the acceleration of vesting of such Award, as to all or part of the Shares, including Shares covered by the Award which would not otherwise be exercisable or vested, under such terms and conditions as the Committee shall determine, including the cancellation of all unexercised Awards upon closing of the Merger/Sale; and/or (ii) provide for the cancellation of each outstanding Award at the closing of such Merger/Sale, and payment to the Grantee of an amount in cash as determined by the Board to be fair in the circumstances (with full authority to determine the method for making such determination, which may be the Black-Scholes model or any other method, and which determination shall be conclusive and binding on all parties, and which may be zero if the value of the Shares is 

 

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determined to be less than the Exercise Price), and subject to such terms and conditions as determined by the Board. Payments under this provision may be delayed to the same extent that payment of consideration to the holders of the Company’s Shares in connection with the Merger/Sale is delayed as a result of escrows, earn outs, holdbacks or any other contingencies.

 

16.2.3     Notwithstanding the foregoing, in the event of a Merger/Sale, the Committee may determine, in its sole discretion, that upon completion of such Merger/Sale, the terms of any Award be otherwise amended, modified or terminated, as the Board shall deem in good faith to be appropriate and fair under the circumstances; and in the event that the Award is an Option Award, that such Option Award shall confer the right to purchase or receive any other security or asset, or any combination thereof, or that its terms be otherwise amended, modified or terminated, as the Board shall deem in good faith to be appropriate, provided that such modification or termination are fair under the circumstances. Neither the authorities and powers of the Committee under this Section, nor the exercise or implementation thereof, shall be deemed to constitute a change or an amendment of the rights of such holder under the Plan or be restricted or limited in any way by any adverse tax consequences that may result from any tax ruling or other approval or determination of any relevant tax authority.

 

16.2.4     The Committee need not take the same action with respect to all Awards or with respect to all Service Providers. The Committee may take different actions with respect to the vested and unvested portions of an Award.

 

16.3        Reservation of Rights. Except as expressly provided in this Section 16, the Grantee of an Award hereunder shall have no rights by reason of any subdivision or consolidation of shares of any class or the payment of any stock dividend (bonus shares), any other increase or decrease in the number of shares of any class or by reason of any dissolution, liquidation, Merger/Sale, or consolidation, divestiture or spin-off of assets or shares of another company. Any issue by the Company of shares of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number, type or price of shares subject to an Award. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structures or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or part of its business or assets or engage in any similar transactions.

 

17.                               NON-TRANSFERABILITY OF AWARDS; SURVIVING BENEFICIARY.

 

17.1        All Awards granted under the Plan shall not be transferable otherwise than by will or by the laws of descent and distribution, unless otherwise determined by the Board or under the Plan, provided that with respect to Shares issued upon exercise of Options, the restrictions on transfer shall be the restrictions referred to in Section 16 (Conditions upon Issuance of Shares) hereof. Awards may be exercised or otherwise realized, during the lifetime of the Grantee, only by the Grantee or by his guardian or legal representative, to the extent provided for herein. Any transfer of an Award not permitted hereunder (including transfers pursuant to any decree of divorce, dissolution or separate maintenance, any property settlement, any separation agreement or any other agreement with a spouse) and any grant of any interest in any Award to, or creation in any way of any interest in any Award by, any party other than the Grantee shall be null and

 

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void and shall not confer upon any party or person, other than the Grantee, any rights. A Grantee may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Grantee, the executor or administrator of the Grantee’s estate shall be deemed to be the Grantee’s beneficiary. Notwithstanding the foregoing, upon the request of the Grantee and subject to Applicable Law the Committee, at its sole discretion, may permit the Grantee to transfer the Award to a family trust.

 

17.2        As long as the Shares are held by the Trustee in favor of the Grantee, all rights possessed by the Grantee over the Shares are personal, and may not be transferred, assigned, pledged or mortgaged, other than by will or laws of descent and distribution.

 

18.                               INABILITY TO OBTAIN AUTHORITY

 

18.1        Legal Compliance. Shares shall not be issued pursuant to the exercise or settlement of an Award, unless the exercise or settlement of such Award and the issuance and delivery of such Shares shall comply with Applicable Laws as determined by counsel to the Company. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, and the inability to issue Shares hereunder due to non-compliance with any Company policies with respect to the sale of Shares, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority or compliance shall not have been obtained or achieved. Shares issued pursuant to an Award shall be subject to the Articles of Association of the Company and any other governing documents of the Company, including all policies, manuals and internal regulations adopted by the Company from time to time, as may be amended from time to time, including any provisions included therein concerning restrictions or limitations on transferability of Shares or grant of any rights with respect thereto and any provisions concerning restrictions on the use of inside information and other provisions deemed by the Company to be appropriate in order to ensure compliance with Applicable Laws, statutes and regulations.

 

18.2        Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, and make other representations as may be required under applicable securities laws if, in the opinion of counsel for the Company, such representations are required, all in form and content specified by the Company.

 

19.                               MARKET STAND-OFF

 

19.1        In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act or equivalent law in another jurisdiction, the Grantee shall not directly or indirectly, without the prior written consent of the Company or its underwriters, (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares acquired under the Plan, or (ii) enter into any swap or other arrangement that 

 

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transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares acquired under the Plan, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares acquired under the Plan or such other securities, in cash or otherwise. Such restriction (the “Market Stand-Off”) shall be in effect for such period of time following the effective date of the registration statement relating to such offering as may be requested by the Company or such underwriters, provided, however, that in any event, such period shall not exceed 90 days following the effective date of such registration statement.

 

19.2        In the event of a subdivision of the outstanding share capital of the Company, the declaration and payment of a stock dividend (distribution of bonus shares), the declaration and payment of an extraordinary dividend payable in a form other than stock, a recapitalization, a reorganization (which may include a combination or exchange of shares or a similar transaction affecting the Company’s outstanding securities without receipt of consideration), a consolidation, a stock split, a spin-off or other corporate divestiture or division, a reclassification or other similar occurrence, an adjustment in conversion ratio, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off.

 

19.3        In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Shares acquired under the Plan until the end of the applicable stand-off period.

 

19.4        The underwriters in connection with a registration statement so filed are intended to be third party beneficiaries of this Section 19 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

20.                              TAX CONSEQUENCES.

 

20.1        If the Committee shall so require, as a condition of exercise of an Award, the release of Shares by the Trustee or the expiration of the Restricted Period, a Grantee shall agree that, no later than the date of such occurrence, he will pay to the Company or make arrangements satisfactory to the Committee and the Trustee (if applicable) regarding payment of any applicable taxes of any kind required by Applicable Law to be withheld or paid.

 

20.2        Each Option Agreement, Restricted Share Agreement, and Restricted Share Unit Agreement and each other agreement in connection with an Award under the Plan shall contain the following agreement and acknowledgment of the Grantee:

 

ALL TAX CONSEQUENCES UNDER ANY APPLICABLE LAW WHICH MAY ARISE FROM THE GRANT OF ANY AWARDS OR THE EXERCISE THEREOF, THE SALE OR DISPOSITION OF ANY SHARES GRANTED HEREUNDER OR ISSUED UPON EXERCISE OF ANY AWARD OR FROM ANY OTHER ACTION OF THE GRANTEE IN CONNECTION WITH THE FOREGOING SHALL BE BORNE AND PAID SOLELY BY THE GRANTEE, AND THE GRANTEE SHALL INDEMNIFY THE COMPANY, ITS SUBSIDIARIES AND AFFILIATES AND THE TRUSTEE, AND SHALL HOLD THEM HARMLESS AGAINST AND FROM ANY

 

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LIABILITY FOR ANY SUCH TAX OR PENALTY, INTEREST OR INDEXATION THEREON. EACH GRANTEE AGREES TO, AND UNDERTAKES TO COMPLY WITH, ANY RULING, SETTLEMENT, CLOSING AGREEMENT OR OTHER SIMILAR AGREEMENT OR ARRANGEMENT WITH ANY TAX AUTHORITY IN CONNECTION WITH THE FOREGOING WHICH IS APPROVED BY THE COMPANY.

 

THE GRANTEE IS ADVISED TO CONSULT WITH A TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING OR EXERCISING AWARDS HEREUNDER. THE COMPANY DOES NOT ASSUME ANY RESPONSIBILITY TO ADVISE THE GRANTEE ON SUCH MATTERS, WHICH SHALL REMAIN SOLELY THE RESPONSIBILITY OF THE GRANTEE.

 

20.3        The Company or any Subsidiary or Affiliate may take such action as it may deem necessary or appropriate, in its discretion, for the purpose of or in connection with withholding of any taxes which the Company or any Subsidiary or Affiliate is required by any Applicable Law to withhold in connection with any Awards (collectively, “Withholding Obligations”). Such actions may include (i) requiring Grantees to remit to the Company in cash an amount sufficient to satisfy such Withholding Obligations; (ii) subject to Applicable Law, allowing the Grantees to provide Shares to the Company, in an amount that at such time, reflects a value that the Committee determines to be sufficient to satisfy such Withholding Obligations; (iii) withholding Shares otherwise issuable upon the exercise of an Award at a value which is determined by the Committee to be sufficient to satisfy such Withholding Obligations; or (iv) any combination of the foregoing. The Company shall not be obligated to allow the exercise of any Award by or on behalf of a Grantee until all tax consequences arising from the exercise of such Award are resolved in a manner acceptable to the Company.

 

20.4        Each Grantee shall notify the Company in writing promptly and in any event within ten days after the date on which such Grantee first obtains knowledge of any tax bureau inquiry, audit, assertion, determination, investigation, or question relating in any manner to the Awards granted or received hereunder or Shares issued thereunder and shall continuously inform the Company of any developments, proceedings, discussions and negotiations relating to such matter, and shall allow the Company and its representatives to participate in any proceedings and discussions concerning such matters. Upon request, a Grantee shall provide to the Company any information or document relating to any matter described in the preceding sentence, which the Company, in its discretion, requires.

 

20.5        With respect to 102 Non-Trustee Options, if the Grantee ceases to be employed by the Company or any Affiliate, the Grantee shall extend to the Company and/or its Affiliate with whom the Grantee is employed a security or guarantee for the payment of taxes due at the time of sale of Shares, all in accordance with the provisions of Section 102 of the Ordinance and the Rules.

 

21.                               RIGHTS AS A SHAREHOLDER; VOTING AND DIVIDENDS.

 

21.1        Proxy Voting Before Listing. Until immediately after the listing for trading on a stock exchange or market or trading system of the Company’s (or the Successor Corporation’s)

 

23

 

Shares, the right to vote any Shares acquired under the Plan pursuant to an Award shall, unless otherwise determined by the Committee, be given by the Grantee or the Trustee (if so requested from the Trustee and agreed by the Trustee), as the case may be, pursuant to an irrevocable proxy, to the person or persons designated by the Board. All Awards granted hereunder shall be conditioned upon the execution of such irrevocable proxy. So long as any such Shares are held by a Trustee (and unless a proxy was given by the Trustee as aforesaid), such Shares shall be voted by the Trustee, and unless the Trustee is directed otherwise by the Board, such Shares shall be voted in the same proportion as the result of the shareholder vote at the shareholders meeting or written consent in respect of which the Shares held by the Trustee are being voted. Any irrevocable proxy granted pursuant hereto shall be of no force or effect immediately after the immediately after the listing for trading on a stock exchange or market or trading system of the Company’s (or the Successor Corporation’s) Shares.

 

21.2        Proxy Voting After Listing. Immediately after the listing for trading on a stock exchange or market or trading system of the Company’s (or the Successor Corporation’s) Shares, the Grantee shall have the right to vote any Shares acquired under the Plan pursuant to an Award. In the case of 102 Option Awards or 3(9) Option Awards (if such Share Options are being held by a Trustee), the Trustee shall have no rights as a shareholder of the Company with respect to the Shares covered by such Award until the Trustee becomes the record holder for such Shares for the Grantee’s benefit, and the Grantee shall have no rights as a shareholder of the Company with respect to the Shares covered by the Award until the date of the release of such Shares from the Trustee to the Grantee and the transfer of record ownership of such Shares to the Grantee. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date on which the Grantee or Trustee (as applicable) becomes the record holder of the Shares covered by an Award, except as provided in Section 21 hereof.

 

21.3        Dividends. With respect to all Awards issued in the form of Shares hereunder or upon the exercise of Awards hereunder, the Grantee shall be entitled to receive dividends distributed with respect to such Shares, subject to the provisions of the Company’s Articles of Association, as amended from time to time, and subject to any Applicable Law.

 

22.                               NO REPRESENTATION BY COMPANY.

 

By granting the Awards, the Company is not, and shall not be deemed as, making any representation or warranties to the Grantee regarding the Company, its business affairs, its prospects or the future value of its Shares.

 

23.                               NO OBLIGATION TO CONTINUE RELATIONSHIP WITH ANY SERVICE PROVIDER.

 

Nothing in the Plan or in any Award granted or agreement entered into pursuant hereto shall confer upon any Grantee or Service Provider the right to continue in the employ of, or be in a consultant, advisor, director, officer or supplier relationship with, the Company or any Subsidiary or Affiliate or to be entitled to any remuneration or benefits not set forth in the Plan or such agreement or to interfere with or limit in any way the right of the Company or any such Subsidiary or Affiliate to terminate such Grantee’s employment or service. Awards granted under the Plan shall not be affected by any change in duties or position of a Grantee as long as

 

24

 

such Grantee continues to be employed by, or be in a consultant, advisor, director, officer or supplier relationship with, the Company or any Subsidiary or Affiliate.

 

24.                               TERM OF THE PLAN.

 

Awards may be granted pursuant to the Plan from time to time within a period of ten years from the Restatement Effective Date of this Plan. From and after the tenth anniversary of the Restatement Effective Date, no grants of Awards may be made and the Plan shall continue to be in full force and effect solely with respect to such Awards that remain outstanding. The Plan shall terminate at such time after the tenth anniversary of this Restatement Effective Date that no Awards remain outstanding.

 

25.                               TERM OF AWARD

 

Anything herein to the contrary notwithstanding, if any Award, or any part thereof, has not been exercised and the Shares covered thereby not paid for within the term of the Award as determined by the Committee, which in any event shall not exceed ten years after the date on which the Award was granted, as set forth in the Notice of Grant in the Grantee’s Award, such Award, or such part thereof, and the right to acquire such Shares shall terminate, and all interests and rights of the Grantee in and to the same shall expire. In the case of Shares held by a Trustee, the Grantee shall elect whether to release such Shares from trust or sell the Shares and upon such release or sale such trust shall expire.

 

26.                               AMENDMENT AND TERMINATION OF THE PLAN.

 

The Board at any time and from time to time may suspend, terminate, modify or amend the Plan, whether retroactively or prospectively; provided, however, that, unless otherwise determined by the Board, an amendment which requires shareholder approval in order for the Plan to continue to comply with any Applicable Law shall not be effective unless approved by the requisite vote of shareholders, and provided further that except as provided herein, no suspension, termination, modification or amendment of the Plan may adversely affect any Award previously granted, without the written consent of Grantees holding a majority in interest of the Awards so affected, and in the event that such consent is obtained, all Awards so affected and the holders thereof shall be bound by and be deemed amended as set forth in, such consent.

 

27.                               RULES PARTICULAR TO SPECIFIC COUNTRIES

 

27.1        Awards in Other Jurisdictions. Notwithstanding anything herein to the contrary, the terms and conditions of the Plan may be amended with respect to a particular country by means of an appendix to the Plan, and to the extent that the terms and conditions set forth in any appendix conflict with any provisions of the Plan, the provisions of the appendix shall govern. Terms and conditions set forth in the Appendix shall apply only to Awards granted to a Grantee under the jurisdiction of the specific country that is the subject of the appendix and shall not apply to Awards issued to a Grantee not under the jurisdiction of such country. The adoption of any such appendix shall be subject to the approval of the Board of Directors or the Committee, and if required in connection with the application of certain tax treatment, pursuant to applicable stock exchange rules or regulations or otherwise, then also the approval of the shareholders of the Company at the required majority.

 

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27.2        Code Section 409A. To the extent applicable, the Plan and any agreement hereunder shall be interpreted to avoid application of tax under Section 409A of the Code. Notwithstanding any provision of the Plan to the contrary, in the event that, following the Restatement Effective Date, the Board determines that any Award may be subject to Section 409A of the Code, the Board may adopt such amendments to the Plan and such agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award or (b) comply with the requirements of Section 409A of the Code.

 

27.3        Awards to U.S. Non-Exempt Employees. If an Award is granted to an Employee who is a non-exempt employee for purposes of the U.S. Fair Labor Standards Act of 1938, as amended (“FLSA”) or comparable state law, the Award will not be first exercisable for or vested in any Shares until at least six months following the date of grant of the Award, other than under such circumstances as to which, under Applicable Law, earlier exercise or vesting will not give rise to an obligation on the part of the Company or any Affiliate to pay overtime wages to such Employee. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Award will be exempt from his or her regular rate of pay.

 

28.                               GOVERNING LAW; JURISDICTION.

 

The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Israel, except with respect to matters that are subject to tax laws, regulations and rules in any specific jurisdiction, which shall be governed by the respective laws, regulations and rules of such jurisdiction. Certain definitions, which refer to laws other than the laws of such jurisdiction, shall be construed in accordance with such other laws. The courts of competent jurisdiction located in Tel-Aviv-Jaffa, Israel shall have exclusive jurisdiction over any dispute arising out of or in connection with the Plan and any Award granted hereunder, other than disputes involving U.S. citizens. The courts of competent jurisdiction located in Contra Costa County, California, U.S.A., shall have exclusive jurisdiction over any dispute involving a U.S. citizen and arising out of or in connection with the Plan and any Award granted hereunder. By signing any agreement relating to an Award hereunder each Grantee irrevocably submits to such exclusive jurisdiction as applicable.

 

29.                               NON-EXCLUSIVITY OF THE PLAN.

 

Neither the adoption of the Plan by the Board nor the submission of the Plan to shareholders of the Company for approval (to the extent required under Applicable Law) shall be construed as creating any limitations on the power or authority of the Board to adopt such other or additional incentive or other compensation arrangements of whatever nature as the Board may deem necessary or desirable or preclude or limit the continuation of any other plan, practice or arrangement for the payment of compensation or fringe benefits to employees generally, or to any class or group of employees, which the Company or any Subsidiary now has lawfully put into effect, including any retirement, pension, savings and stock purchase plan, insurance, death and disability benefits and executive short-term or long-term incentive plans.

 

26

 

30.                               MISCELLANEOUS.

 

30.1        Additional Terms. Each Award awarded under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.

 

30.2        Currency. Except as otherwise determined by the Administrator, all monetary values with respect to Awards granted pursuant to this Plan, including without limitation the Fair Market Value and the Exercise Price of each Option, shall be stated in United States Dollars. In the event that the exercise price is in fact to be paid in New Israeli Shekels, then the conversion rate to be applied shall be the last known representative rate of exchange of the US Dollar to the New Israeli Shekel on the date of payment as announced by the Bank of Israel. Provided, however, that the amount of any tax liability shall be determined in accordance with applicable law and regulations.

 

30.3        Construction. To the extent any provision herein conflicts with the conditions of any relevant tax law or regulation which are relied upon for tax relief in respect of a particular Award to a Grantee, the provisions of such law or regulation shall prevail over those of the Plan and the Committee is empowered hereunder to interpret and enforce the said prevailing provisions.

 

30.4        Severability. If any provision of the Plan or any Option Agreement, Restricted Share Agreement, Restricted Share Unit Agreement or any other agreement entered into in connection with an Award shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction. In addition, if any particular provision contained in the Plan or any Option Agreement, Restricted Share Agreement, Restricted Share Unit Agreement or any other agreement entered into in connection with an Award shall for any reason be held to be excessively broad as to duration, geographic scope, activity or subject, it shall be construed by limiting and reducing such provision as to such characteristic so that the provision is enforceable to fullest extent compatible with Applicable Law as it shall then appear.

 

30.5        Captions and Titles. The use of captions and titles in the Plan or any Option Agreement, Restricted Share Agreement, Restricted Share Unit Agreement or any other agreement entered into in connection with an Award is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or such agreement.

 

27

 

STEADYMED LTD.

 

(THE “COMPANY”)

 

OPTION GRANT DEED

 

Dated          

 

On June 18th, 2009, the Company duly adopted and the Company’s board of directors (the “Board”) approved the Company’s 2009 Stock Option Plan, in the form attached hereto as Exhibit A (the “Plan”). In addition, on               the Board resolved to grant to               , I.D. no.               (the “Optionee”) Options to purchase Shares of the Company, and the Optionee has agreed to such grant and the Optionee acknowledges that by signing this Option Grant deed (the “Deed”) all Options and Shares are subject to all the terms and conditions as set forth in the Plan and as provided herein. Capital terms not otherwise defined herein shall have the meaning ascribed to them in the Plan;

 

1.              The Company hereby grants to the Optionee the number of Options as set forth below; each Option shall be exercisable into one Share upon payment of the Purchase Price and subject to the terms and conditions as set forth in the Plan and as provided herein.

 

2.              Subject to the provisions of the Plan, Options shall vest and become exercisable according to the Vesting Dates set forth herein and provided that the Optionee is an Employee of or providing services to the Company and/or its Affiliates on the applicable Vesting Date.

 

3.              In order for the Company to issue Shares upon the exercise of any of the Options, the Optionee hereby agrees to sign any and all documents as may be required by the Company and/or by the Trustee, pursuant to the provisions of any applicable law and/or Company’s Articles of Association.

 

4.              The Company shall not be obligated to issue any Shares upon the exercise of an Option if such issuance, in the opinion of the Company, might constitute a violation by the Company of any provision of law. In addition, the Optionee will not be entitled to receive from the Company and/or the Trustee any Shares allocated or issued upon the exercise of Options prior to the full payments of the Optionee’s tax liabilities arising from Options which were granted to him and/or Shares issued upon the exercise of Options.

 

5.              All Options and Shares shall be subject to the limitations set forth in the Plan and in the Company’s Articles of Association and any shareholders’ agreement to which the holders of ordinary shares of the Company are bound.

 

6.              The Optionee has consulted with a tax expert with respect to the tax consequences of receiving and/or exercising the Options or disposing of the Options and/or Shares. With respect to Approved 102 Options (if applicable), the Optionee hereby acknowledges that he is familiar with the provisions of Section 102 and the regulations and rules promulgated thereunder, and accepts the provisions of the trust agreement signed by the Company and the Trustee, attached as Exhibit B hereto, and agrees to be bound by its terms.

 

7.              Pursuant to Section 17 of the Plan and, when applicable, subject to the provisions of Section 102, until the consummation of an IPO, any Shares acquired upon the exercise of Options shall be voted by an irrevocable proxy, attached as Exhibit C hereto.

 

8.              The Optionee is familiar with the Company, its activity and its financial and commercial forecast, and the Optionee knows that there is no certainty that the exercise of the Options will be financially worthwhile. The Optionee hereby undertakes not to have any claim against the Company or any of its directors, employees, shareholders or advisors if it emerges, at the time of exercising the Options, that the Optionee’s investment in the Company’s Shares was not worthwhile, for any reason whatsoever.

 

9.              The Optionee knows that his rights regarding the Options and the Shares are subject for all intents and purposes to the instructions of the Company’s documents of incorporation and to the agreements of the shareholders in the Company.

 

10.       The Optionee knows that in addition to the allocations set forth above, the Company has allocated and/or is entitled to allocate Options and Shares to other employees and other people, and the Optionee shall have no claim regarding such allocations, their quantity, the relationship among them and between them and the other shareholders in the Company, exercising of the options or any matter related to or stemming from them.

 

 

11.       The Optionee acknowledges that neither the Plan nor the grant of Option or Shares thereunder shall impose any obligation on the Company to continue the engagement of the Optionee, and nothing in the Plan or in any Option or Shares granted pursuant thereto shall confer upon any Optionee any right to continue being engaged by the Company, or restrict the right of the Company to terminate such engagement at any time.

 

12.       The Optionee shall regard the information in this Deed and its exhibits attached hereto as confidential information and the Optionee shall not reveal its contents to anyone except when required by law or for the purpose of gaining legal or tax advice.

 

13.       Subject to the provisions of the Plan, to which this Deed is subject, this Deed together with all exhibits hereto, constitute the entire agreement by and between the Optionee and the Company with respect to Options granted hereunder, and supersedes all prior agreements, understandings and arrangements, oral or written, between the Optionee and the Company with respect to the subject matter hereof. Any interpretation of this Option Agreement will be made in accordance with the Plan but in the event there is any contradiction between the provisions of this Deed and the Plan, the provisions of this Deed will prevail.

 

14.       Terms of the Option

 

	
Name of the   Optionee:                       
    	
 
    	
 
    	
 
    	
 
    
	
Date of   Grant:                     
    	
 
    	
 
    	
 
    	
 
    
	
Designation:
    	
 
    	
·
    	
 
    	
[] Approved 102 Options:
    
	
 
    	
 
    	
·
    	
 
    	
[]Capital   Gain Option (CGO);or
    
	
 
    	
 
    	
·
    	
 
    	
[] Ordinary Income Option; or
    
	
 
    	
 
    	
·
    	
 
    	
[] Unapproved 102 Option
    
	
 
    	
 
    	
·
    	
 
    	
[] 3(i) Option
    

 

	
14.1
    	
 
    	
Number of Options granted:
    	
 
    	
 
    
	
14.2
    	
 
    	
Purchase Price:
    	
 
    	
NIS      
    
	
14.3
    	
 
    	
Vesting Dates:
    	
 
    	
 
    

 

	
Number of Options
    	
 
    	
Vesting Date
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

10.4                 Expiration Date:    , 20      (seven

years as of date of grant pursuant to section 8.6

of the Plan)

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
[Name of Optionee]
    	
 
    	
 
    	
SteadyMed Ltd.
    
	
Date: 
    	
 
    	
 
    	
 
    	
By:
    	
 
    
						

 

Enclosed:

	
Exhibit A:
    	
 
    	
Option Plan
    
	
Exhibit B:
    	
 
    	
Trust Agreement
    
	
Exhibit C:
    	
 
    	
Proxy
    

 

2

 

Exhibit A

 

OPTION PLAN

 

 

Exhibit B

 

TRUST AGREEMENT

 

 

MANAGEMENT & TRUST AGREEMENT

 

Executed in Tel Aviv on the 1st day of January, 2010

 

BETWEEN

 

Steadymed Ltd.

Of 22a Raul Wallenberg, Tel-Aviv 69719, Israel

Tel No. +972-3-6449556

Fax No. +972-3-6449558

(the “Company”)

 

On one part;

 

AND

 

ESOP Management & Trust Services Ltd.

Of Aviv Tower, 7 Jabotinsky St. Ramat Gan, 52520, Israel

Tel. No. 972-3-5757088

Fax No. 972-3-5757044

(the “ESOP”).

 

On the second part;

 

RECITALS

 

WHEREAS                         the Company has adopted a share option plan, known as “SteadyMed Ltd. 2009 Stock Option Plan” (hereinafter referred to as the “Plan”), for the allotment of (1) Options to purchase Shares; and (2) shares; (hereinafter: the “Options” and the “Shares”, Options and Shares shall be jointly referred as: “Awards”), to employees and services providers of the Company (the “Awardee(s)”);

 

Copy of the Plan is attached hereto as Exhibit “A”.

 

WHEREAS                         the Company wishes to allot Awards to Israeli Awardees pursuant to the provisions of the new and amended Section 102 of the Israeli Income Tax Ordinance [New Version], 1961 (respectively: the “Tax Ordinance” and “ Section 102”), pursuant to the Income Tax Rules (Tax Relief upon the Allotment of Shares to Employees), 2003 (hereinafter: the “Rules”), and pursuant to the Plans and this Agreement;

 

WHEREAS                         the Company wishes to allot the Awards in: (a) the track referred to as the “Capital Gains Track”, according to Section 102(b)(2) (hereinafter: “Approved 102 Awards”); (b) the track referred to as the “non trustee”, according to Section 102(C) (hereinafter: “Unapproved 102 Awards”); (c) accordance with section 3(9) to the Ordinance (hereinafter; “3(9) Options”) and (d) to non Israelis Awardees (hereinafter: “Non Israelis Awards”);

 

 

WHEREAS                         the Company wishes to appoint ESOP as the trustee for the Approved 102 Awards;

 

WHEREAS                         ESOP has agreed to act as a trustee to the Plan pursuant to the Tax Ordinance, the Rules, the Plan and this Agreement;

 

WHEREAS                         the Approved 102 Awards shall be issued in the name of ESOP, so that ESOP shall hold the Approved 102 Awards in trust at least until the end of the holding period according to the terms and conditions set forth in section 102, the Rules, the Plan and this Agreement (hereinafter the “End of the Holding Period”);

 

WHEREAS                         the Company wishes to hire ESOP’s services with respect to the Unapproved 102 Awards, the 3(9) Options and the Non Israelis Options;

 

WHEREAS                         ESOP shall hold the Unapproved 102 Awards, the 3(9) Options and the Non Israelis Options according to the Plan and this Agreement. ESOP shall make sure that the applicable taxes shall be collected from the Awardees.

 

WHEREAS                         the applications set forth in the Rules shall be submitted to the Israeli Assessing Officer, by virtue of his power under Section 102, to approve the Plan and ESOP as the trustee;

 

WHEREAS                         the Company has undertaken to refrain from allotting the Approved 102 Awards on behalf of Awardees, unless it receives beforehand the confirmation of each Awardee that the Awardee — (1) undertakes all the provisions set forth in Section 102 (including provisions regarding the Capital Gains Track) or set forth in the Rules, the Plan and this Agreement, and (2) undertakes, according to Section 102 and the Rules, not to release the Shares from trust or sell the Shares before the End of the Holding Period, unless he pays all taxes which may arise in connection with such release or sale and complies with the provisions regarding incompliance with the Holding Period, in Section 102(b)(4) of the Ordinance and the Rules (hereinafter the “102 Awardee’s Confirmation”);

 

WHEREAS                         the Company has declared to ESOP that the Approved and Unapproved 102 Awards may be granted under the Plan to employees including an individual who is serving as a director or an office holder, but excluding an individual who is a “Controlling Shareholder”, (as defined in section 32(9) to the Ordinance, whether on the allotment day or as a consequence of the allotment), unless the Company shall receive prior to such an allotment, an approval from the Income Tax Commissioner (hereinafter the “Employees”);

 

WHEREAS                         the Company has declared before ESOP that 3(9) Options may be granted under the plan only to entities and individuals that are not Employees.

 

THEREFORE IT IS HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS:

 

1.                                      Recitals and Exhibits.

 

The Recitals to this Agreement and the Exhibits attached hereto, the Tax Ordinance and the Rules form an integral part of this Agreement.

 

2

 

2.                                      Deposit of the Awards

 

2.1                       The Approved 102 Awards under the Plan shall be issued in the name of ESOP and will be registered, in the name of ESOP in the books of the Company.

 

The Award Agreements regarding the Approved 102 Awards shall be delivered to the ESOP.

 

2.2                       The Approved 102 Awards shall be delivered to ESOP immediately upon the grant together with the signed 102 Awardee’s Confirmation in favor of whom the Approved 102 Awards have been allotted.

 

2.3                       The Unapproved 102 Awards, the 3(9) Options and the Non Israelis Options shall be delivered to ESOP immediately upon the grant.

 

2.4                       Upon the Awards allotment, the Company shall deliver to ESOP a list detailing:

 

2.4.1                                                  The full name, I.D. No., employee number with the Company, Fax number, home address and Email address of each Awardee;

 

2.4.2                                                  The number of Awards granted to each Awardee;

 

2.4.3                                                  The number of Shares to be exercised by each Award;

 

2.4.4                                                  The grant date of the Awards;

 

2.4.5                                                  The dates when each Award may be exercised (“vesting dates”), if applicable;

 

2.4.6                                                  The exercise price of each Award, if applicable;

 

2.4.7                                                  The expiry date or dates of the Awards (the “expiry date”);

 

2.4.8                                                  The tax provision under which the Awards had been allotted (e.g. Approved 102 Awards, Unapproved 102 Awards, 3(9) Options and Non Israeli Options);

 

2.4.9                                                  Other terms, conditions and restrictions as the Board of Directors shall determine.

 

(The “Company’s Acknowledgment”).

 

2.5                       Following the Awards allotment, the Company shall deliver to ESOP the signed Awards Agreement.

 

2.6                       ESOP shall be under no obligation to examine and/or has no responsibility whatsoever in respect of information delivered to it by the Company, and it may act upon this information, pursuant to the terms of this Agreement.

 

2.7                       The Company shall notify ESOP in writing of any change in the information provided to ESOP in the Company’s Acknowledgment as soon as reasonably practicable.

 

2.8                       ESOP shall maintain a register, based on the Company’s Acknowledgment as updated from time to time (the “Register”). ESOP shall update this Register according to the number of Options exercised by each Awardee and the number of Shares released on behalf of each Awardee.

 

Nothing in the aforesaid shall detract from the obligation of the Company to

 

3

 

maintain a registration of the Awards allotment.

 

2.9                       ESOP shall provide the Company with access to a web-based data-base, in order to view the current status of the Awards and Shares.

 

2.10                The Shares shall be released to the Awardees in accordance with the provisions of the Tax Ordinance, the Rules, the Plan and the procedure setout hereunder.

 

3.                                      The End of the Holding Period

 

3.1                       According to Section 102 and the Rules, ESOP hereby undertakes to hold the Approved 102 Awards until the End of the Holding Period.

 

Without prejudice to the aforesaid, ESOP shall continue to hold the Approved 102 Awards after the End of the Holding Period until the Shares release at the request of the Awardee, subject to this Agreement and the Plan.

 

3.2                       At any time after the End of the Holding Period and the vesting period determined in the Company’s Acknowledgment, the Awardee shall be entitled to instruct ESOP, to release the shares resulting from the Approved 102 Awards, deposited with ESOP. ESOP will comply with the instruction of the Awardee on condition that ESOP has received prior to such release, an approval from the Assessing Officer according to which all required taxes according to Section 102 and the Rules have been paid by the Awardee.

 

3.3                       Until all taxes have been paid in accordance with the Rules, the Approved 102 Awards may not be sold, transferred, assigned, pledged, encumbered, or otherwise willfully hypothecated or disposed of, and no power of attorney or deed of transfer, whether for immediate or future use may be validly given. Notwithstanding the foregoing, the Approved 102 Awards may be validly transferred in a transfer made by virtue of laws of succession or by operation of law provided that the transferee thereof shall be subject to the provisions of Section 102 and the Rules as would have been applicable to the Awardee were he or she to have survived.

 

Furthermore, in the event that the Approved 102 Awards are transferred by virtue of laws of succession or by operation of law, the provisions of this Agreement shall apply to the heirs or transferees of the Awardee.

 

3.4                       With respect to Unapproved 102 Awards and shares and 3(9) Options and shares, the shares will not be released until receipt of confirmation from the Assessing Officer that all required taxes have been paid by the Awardee. Such awards may not be sold, transferred, assigned, pledged, encumbered, or otherwise willfully hypothecated or disposed of, and no power of attorney or deed of transfer, whether for immediate or future use may be validly given with respect to them, other than in connection with a transfer pursuant to.

 

4.                                      The Right to Exercise Awards

 

4.1                       The vesting periods in which the Awards, which require exercise, may be exercised shall be as set forth in the Company’s Acknowledgment as updated from time to time by the Company.

 

4.2                       During the lifetime of the Awardee, the Awards may be exercised only by the Awardee or by his guardian or legal representative. In the event of the

 

4

 

Awardee’s death, ESOP shall act according to the Plan, subject to any law and other instruction given by any applicable authority.

 

4.3                       ESOP shall have no obligation to verify the right of each Awardee to exercise his Awards, and it shall act only according to the Register, and/or according to the Company’s approval given on an Application as described hereunder.

 

5.                                      The Exercise of the Awards

 

5.1                       An Awardee who is entitled, subject to Section 9 below and the Company’s Acknowledgement, and wishes to exercise his Options, in whole or in part, shall give his written instruction to ESOP, via the Company, in the form of Exhibit “B” (“the Exercise Application”).

 

5.2                       The Company shall, by its signature on the Exercise Application, confirm to ESOP as follows:

 

5.2.1                     The accuracy of the details set out on the Exercise Application; and

 

5.2.2                     The particular Awardee’s right to exercise the Awards stated in the Application, in accordance with the terms of the Plan; and

 

5.2.3                     Full payment of the exercise price of the Awards, as stated in the Exercise Application, by the Awardee directly to the Company.

 

5.2.4                     With respect to the 3(9) Options — A confirmation from the Company that all tax liabilities and any other compulsory payments arising in connection with the exercise of the Options were paid, or will be paid, by the Awardee.

 

5.3                       ESOP shall not execute an Exercise Application which has not been signed by the Company and/or which does not contain all the particulars set forth in Section 5.2 above.

 

Such an Exercise Application shall be returned to the Company unexecuted.

 

5.4                       The Company shall issue the Shares resulting from the exercise of the Awards, directly (a) in the name of ESOP for the benefit of the Awardee in case of Approved 102 Awards; or (b) in the name of the Awardee, to be held by ESOP on behalf of the Awardee in case of Unapproved 102 Awards, 3(9) Options and Non Israelis Options;

 

5.5                       ESOP shall hold the Share certificate in its safe.

 

5.6                       In the event that the Company grants Awardees rights to purchase additional shares or if bonus shares are issued to Awardees, in connection with the Awards originally allocated to the Awardee (the “Additional Shares”), all such Additional Shares shall be allocated and/or issued to ESOP for the benefit of Awardees, and shall be held by ESOP as appropriate. Such Additional Shares shall be treated in the same manner as the Awards pursuant to which the Additional Shares have been issued. The provisions of this Agreement shall also apply to the Additional Shares.

 

5.7                       Any dividend in cash which the Company distributes in respect of the Shares shall be delivered to ESOP, as appropriate. ESOP will pay the cash dividend to the Awardee after deduction of the tax due.

 

5.8                       In the event of merger, stock split, re-capitalization, consolidation, or other similar transactions, the Company shall notify ESOP of the changes

 

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thereupon by delivering a Company’s Acknowledgment containing the relevant updated information and all the necessary documents. In the event that a tax liability shall occur as a result of the above transactions, the Company shall provide ESOP with evidence that the tax thereof, has been paid.

 

The provisions of this Agreement shall also apply on the increased or decreased number of Awards resulting from the transactions thereof.

 

ESOP will act in this matter only according to the Company’s notification, subject to any applicable law and/or Tax authorities’ approval.

 

5.9                       ESOP shall not be required to take any action with respect to the Awards other than in accordance with the terms of this Agreement, save and insofar as any action is required in order to fulfill any obligation on the part of ESOP towards the tax authorities in accordance with the terms of this Agreement.

 

ESOP shall not be required to represent the Awardees as shareholders in the Company or to participate in any meetings of the Company or to carry out any other action in connection with the Company as a result of ESOP holding any Shares. Without derogating from the above, ESOP shall grant appropriate powers of attorney for the purpose of participation in meetings of the shareholders of the Company in the name and in place of ESOP, should ESOP be so requested in writing by the Awardees, or by the person appointed by the Awardee as the “Proxy Holder” in the proxy executed by the Awardee.

 

ESOP shall not be liable to exercise any authority or other right vested in shareholders in the Company other than as expressly stated in this Agreement.

 

6.                                      Release of Shares from ESOP into the Awardees’ name

 

6.1                       An Awardee who wishes to release his Shares, which are deposited with ESOP and to have the Shares transferred into his own name, subject to any applicable law and regulations, the provisions of this Agreement and the provisions of the Plan, shall give his written instruction accordingly, in the form of Exhibit “C” (hereinafter: the “Release Application”).

 

6.2                       The Company shall, by its signature on the Release Application, confirm to ESOP the particular Awardee’s entitlement to release the Shares in accordance with the terms of the Plan.

 

6.3                       ESOP shall not execute instructions which were not signed by the Company and/or which do not contain all particulars and such instructions will be returned to the Company without being executed.

 

6.4                       An Awardee shall deliver to ESOP, together with the Release Application, the assessing officer’s approval regarding the payment of the tax due by the Awardee in connection with the release of the Shares thereof according to the Ordinance and the Rules.

 

6.5                       In the event of a failure to deliver to ESOP, in advance, the assessing officer’s approval, then ESOP shall not be responsible for any damage that may be caused as a result of its failure to release any securities.

 

6.6                       Upon receipt of the duly completed application form and after receiving the

 

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assessing officer’s approval (whichever shall be the later), ESOP shall release the Shares and transfer it directly to the Awardee, according to the details provided in the Awardee’s Release Application.

 

7.                                      Release of the Shares from ESOP by sale

 

If the Shares shall be registered for trade in any Stock Exchange Market, the parties to this agreement may, by mutual consent, sign an addendum to this Agreement, which shall determine the procedure of the selling of Shares through ESOP.

 

8.                                      ESOP — Awardee Relations

 

8.1.                    The Company shall notify the Awardees of the appointment of ESOP and of its duties.

 

8.2.                    The Company and ESOP shall appoint a contact person from time to time, through whom all communication between ESOP and the Awardees and/or the Company will take place.

 

9.                                      Termination of employment

 

9.1                       The Company shall notify ESOP of any termination of an Awardee’s employment with the Company, for whatever reason (including, God forbid, the Awardee’s death or disability), and shall notify ESOP the status of the Awardee’s Awards according to the terms of the Plan.

 

9.2                       ESOP is under no obligation to examine the rights of the Awardee, whose employment has been terminated, and ESOP shall act in this matter only according to the Company’s notification / instructions.

 

10.                               Lapse of Awards

 

The Awards shall expire on the date specified in the Company’s Acknowledgment, pursuant to the Plan.

 

In the event that an Award lapses for whatever reason, in accordance with the provisions of the Plan, the Company shall immediately notify ESOP of the lapse and ESOP shall note accordingly on its registration and forthwith return the said Award to the Company.

 

11.                               Reports — Approved 102 Awards

 

11.1                ESOP shall report to the tax authorities no later than March 31st of each year (or other date as shall be required by the tax authorities), as long as any Approved 102 Awards remain in the possession of ESOP, in the form required by Section 8 of the Rules.

 

11.2                ESOP and the Company shall report to the tax authorities, within 90 days (or other date as shall be required by the tax authorities) from each allotment of Approved 102 Award, in the form required by Section 5 to the Rules.

 

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11.3                The Company shall produce to ESOP reporting, any document or approval reasonably required by ESOP in its discretion, for the purpose of complying with its obligations hereunder.

 

11.4                With respect to Unapproved 102 Awards and 3(9) Options, ESOP will maintain a database based solely upon information received by the Company, but will not verify the accuracy or completeness of such information. ESOP will not be responsible for the veracity of reports to the tax authorities and/or the database made upon reliance of such information and/or any tax deductions made in respect to Unapproved 102 Awards and 3(9) Options.

 

12.                               Authorities and Responsibilities of ESOP; Indemnification

 

12.1.             ESOP shall not be liable for any action or omission on its part in connection with this Agreement or the implementation thereof, except when such action or omission by ESOP is because of ESOP’s intentional misconduct, gross negligence or a breach of this agreement, ESOP shall not be liable for any action taken at the request of the Company, notwithstanding that such act is not in compliance with this Agreement.

 

12.2.             The Company hereby undertakes to indemnify ESOP in respect of any damage, expense or loss of any kind that ESOP may incur as a result of or in consequence of performance of its duties under this Agreement (including reasonable lawyers’ fees and other experts’ fees), provided that ESOP is not liable for such damage due to its intentional misconduct, gross negligence, or breach of this Agreement, and provided, further, that ESOP acted in a reasonable manner and in accordance with the provisions of the Plan and of the Company’s Acknowledgement (to the extent that the provisions of the Plan and of the Company’s Acknowledgement do not contradict the provisions of the law and of this Agreement).

 

12.3                ESOP shall not be obligated to take any action of whatever kind with the Awards and/or in connection thereto unless they are expressly required to do so and subject to the provisions of this Agreement.

 

12.4                ESOP shall not be obligated to take any action, which imposes financial liability on them, unless the Company and/or the Awardee, as the case may be, guarantee them to their full satisfaction such financial liability.

 

12.5                ESOP shall not be responsible for any act and/or omission arising from information, guidance or instruction which they were given by the Company and/or by the Awardees in the event that they acted or omitted to act in reliance on such information, guidance or instruction, in good faith and without knowledge that such information, guidance or instruction was inaccurate. The Company shall indemnify ESOP in respect of any loss, damage or expense, which it incurs due to such information, guidance and/or instruction. For the avoidance of any doubt, except as explicitly set forth herein, ESOP will not act upon instructions received from any Awardee.

 

12.6                Likewise, the Company shall indemnify ESOP in respect of any loss or expense they shall suffer in respect of any demand or claim on the part of the Awardees (or any person on their behalf) regarding tax issues as mentioned in this Agreement, including a claim that the Awardees are entitled to an exemption from income tax provided that ESOP are not liable for such

 

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damage due to their intentional misconduct, gross negligence, or breach of this Agreement.

 

13.                               Fees

 

13.1.             The Company shall pay to ESOP for the service provided by it under this Agreement, an annual fee, at the beginning of each trust year, within thirty (30) days of its receipt of ESOP’s statement for its fees, as follows:

 

Per Employees under Section 102 -

 

For up to 5 Optionees — 4,000 NIS + VAT per year.

 

For any additional 1 Optionees— additional 250 NIS + VAT per year.

 

Per Non - Employees —180 NIS + VAT per optionee per year.

 

13.2                In the event that the company shall not pay the annual fee within thirty (30) days after receipt of ESOP’s statement, the annual fee shall bear a lawful interest for delay.

 

13.3                In the event that ESOP is required to carry out special transactions which are not within the services to be performed by ESOP under this Agreement, ESOP shall notify the Company in advance and an additional professional fees shall be paid to ESOP for these services.

 

13.4                In the event that the parties according to Section 7 will sign an addendum to this Agreement hereof, the Parties will agree upon additional Fees and/or commissions.

 

13.5                All payments denominated in this Section in United States Dollars shall be paid in New Israeli Shekels at the Representative Rate of exchange for the United States Dollar published by the Bank of Israel known on the date of issuance of ESOP’s statement.

 

13.6                Value Added Tax, if due, shall be added to all of the fees and commissions payable under this Section.

 

14.                               Duration of Service

 

The services created under this Agreement shall remain in effect until the later of (i) as long as Awards are held by ESOP; and (ii) until such time as ESOP have fulfilled all of the duties and obligations imposed upon them under the terms of this Agreement.

 

15.                               Replacement of ESOP

 

15.1                ESOP shall be entitled to resign from their positions at such time as they see fit by giving sixty (30) days prior written notice the Company, subject to the approval of the tax authorities (hereinafter: “Date of resignation”), if such an approval is required, which the Company shall make all reasonable efforts to obtain.

 

ESOP shall refund pro-rata the proportionate amount of the fees concerning the period between the date of resignation and the end of the current year.

 

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15.2                The Company shall be entitled to remove ESOP from it’s positions, subject to the approval of the tax authorities (which the Company shall make all reasonable efforts to obtain if such an approval is required), at such time as it sees fit upon giving thirty (30) days’ prior written notice to ESOP.

 

From the second year of the trust, ESOP shall refund pro-rata the proportionate amount of the fees concerning the period between the date of resignation and the end of the current year.

 

ESOP shall cooperate with the Company in the execution of the removal and the appointment of a new service provider, and shall take any reasonable required action to consummate such a removal and appointment, provided however that ESOP shall bear no expenses in connection with said removal and appointment.

 

15.3.             Upon resignation or removal of ESOP, as aforesaid, ESOP shall deliver to the new service provider the Awards and/or the Shares in its possession in order that the new service provider may hold the same for the Awardees. Likewise, ESOP shall deliver to the new service provider all information in its possession in connection with the Trust and services provided under this Agreement and shall fully cooperate to ensure the orderly and seamless transfer of all responsibilities to the new trustee.

 

15.4                In any event of resignation or removal of ESOP, as aforesaid, ESOP shall be obligated to fulfill its obligations under this Agreement, until the removal or resignation becomes effective, all as set forth above.

 

16.          Miscellaneous

 

16.1                The Company shall notify ESOP in writing, of any change in the terms and conditions of the Plan (“Change Notice”). Notwithstanding the above, any change that may influence the rights and/or obligations of ESOP shall be subject to its prior written consent (“Consent Notice”). Any change in the Plan, that may influence the rights and/or obligations of ESOP shall be in effect between the parties only upon the delivery of a Consent Notice by ESOP to the Company.

 

16.2                All the expenses incurred in connection with the implementation of this Agreement including stamp duty, if applicable, shall apply to Company and be borne by it if such are according to the law.

 

16.3                The headings of the articles are only for the convenience of the parties and they may not be used howsoever as basis for construing the articles.

 

16.4                The plural form includes also the singular and vice versa. References made in masculine form include also the feminine and vice versa.

 

16.5                This Agreement shall be governed by the laws of the State of Israel without giving effect to the principles of conflict of laws. The exclusive jurisdiction in any matter arising in connection with this Agreement shall be vested in the competent courts of Tel Aviv-Jaffa.

 

16.6                The addresses of the parties, for the purposes of this Agreement, are as specified in the introduction to this Agreement, and any notice given by one

 

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party to the other shall be deemed delivered (a) within 7 (seven) days of the date of posting (if by registered mail) and/or (b) upon receipt thereof (if by facsimile or personal delivery).

 

For the purposes of this Agreement, and unless the orders otherwise, the address of the Awardees shall be deemed to be the address of the Company and any notice served upon the Company on behalf of the Awardees shall be deemed to have been served upon the Awardees personally.

 

16.7                Each document which includes details concerning the Awards and which is so sent by post shall be sent to the Contact Person and shall be addressed to him “Personal, For Addressee Only”.

 

The Company hereby informs that the Contact Person for the purpose of this Agreement is Yossi Aldar — CEO.

 

16.8                Each document which includes details concerning the Awards and which is sent through the facsimile shall be sent to the Contact Person, following coordination by telephone only.

 

16.9                ESOP shall be entitled reasonably to rely, without further inspection, on any document or notice of the Company and/or any Awardee delivered to ESOP by Mail and/or by facsimile and/or by personal delivery, whether original or a copy thereof, which prima facie seems to be duly signed and executed, respectively by the Company and/or the Awardee.

 

Should ESOP act in reliance of such document or notice in good faith and in accordance with his obligations in this Agreement, they shall be exempted from any liability, even if said document or notice is later found to be not in order.

 

16.10         In the event of any contradiction between any provision of this Agreement and the provisions of the Plan, in any matter relating to the dealings between ESOP, the Company and the Awardees, the provisions of this Agreement shall prevail.

 

16.11         In the event that the Board of Directors of the Company implements additional plans for the allotment of Awards - under Section 102 or under section 3(9) - to the employees and/or non-employees and service providers of the Company, the terms of this Agreement shall apply also to the allotments pursuant to the Plan or to the new plans, as relevant, with the necessary modifications in light of the Plan or such new plans.

 

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IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day and year first above written.

 

 

	
 
    	
Steadymed Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Yossi Aldar
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Yossi Aldar
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
CEO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ESOP Management & Trust Services, Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ ESOP Management & Trust Services, Ltd.
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Odelia Pollak; Sarit Foox
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
CEO; VP
    

 

12

 

EXHIBIT “A”

 

The Plan

 

13

 

EXHIBIT “B”

 

Exercise Application

 

To: ESOP Management and Trust Services Ltd.

 

I, the Undersigned Option Holder, hereby state as follows:

 

I am the owner of            Options to purchase            Shares of Steadymed Ltd. (the “Company”), (respectively: the “Options” and the “Shares”).

 

The Options are held by ESOP Management and Trust Services LTD., in accordance with the provisions of Section 102/Section 3(9) of the Israeli Tax Ordinance, the Agreement and “SteadyMed Ltd. 2009 Stock Option Plan”, under which the Options were allotted (“the Plan”).

 

I wish to exercise my Options as follows:

 

                 number of Options to be exercised for a total of                   Shares.

 

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Awardee’s   Name
    	
 
    	
Signature
    	
 
    	
Date
    	
 
    	
Awardee’s I.D.
    	
 
    

 

Company’s Acknowledgment

 

We hereby confirm to you as follows:

 

The above-named Option Holder,                                           (full name), is entitled to exercise the Options, as specified above, in accordance with the terms of the Plan.

 

The exercise price due by the Option Holder was paid to us directly by the Option Holder.

 

With respect to options under Section 102 - Please find the Share Certificate which represents the shares resulting from the exercise described above.

 

With respect to options under Section 3(9) —all tax liabilities and any other compulsory payments arising in connection with the exercise of the Options were paid, or will be paid, by the Awardee. Further more, the Share Certificate which represents the shares resulting from the exercise was delivered to the Awardee directly.

 

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
Print Name and Title
    	
 
    	
Date
    	
 
    

 

14

 

EXHIBIT “C”

 

Release Application

 

To: ESOP Management and Trust Services Ltd.

 

I am the owner of            Ordinary Shares of Steadymed Ltd. (the “Company” and the “Shares”).

 

These Shares are held by ESOP Management and Trust Services LTD. in accordance with the provisions of Section 102 of the Israeli Tax Ordinance, the Agreement and “SteadyMed Ltd. 2009 Stock Option Plan”, under which the Options were allotted (“the Plan”).

 

I hereby request you to release            Shares and to deliver it to:

 

My address:                                                       

 

Enclosed please find the Assessing Officer approval regarding the payment of the tax due by me in connection with the release.

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Awardee’s   Name
    	
 
    	
Signature
    	
 
    	
Date
    	
 
    	
Awardee’s I.D.
    	
 
    

 

Company’s Acknowledgment

 

We hereby confirm to you that the above-named Awardee is entitled to release the Shares, as specified above, in accordance with the terms of the Plan.

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
Print Name and Title
    	
 
    	
Date
    	
 
    

 

15

 

Exhibit C

 

PROXY

 

The undersigned, as record holder of securities of SteadyMed Ltd. hereby irrevocably appoints and requests ESOP Management and Trust Services Ltd., for as long as they hold the Shares (defined below) in trust under the Plan (defined below), to appoint the Company’s Chairman of the Board of Directors and in its absence to the Company’s CEO, as my proxy to attend all shareholders’ meetings and to vote, execute consents, and otherwise represent me with respect to exercised shares (i.e. options exercised into shares pursuant to the SteadyMed Ltd. 2009 Stock Option Plan) (the “Shares”) in the same manner and with the same effect as if the undersigned were personally present at any such meeting or voting such securities or personally acting on any matters submitted to shareholders for approval or consent.

 

This proxy is made pursuant the SteadyMed Ltd. 2009 Stock Option Plan, dated June 18th, 2009 (the “Plan”).

 

The Shares shall be voted by the proxy holder in the same proportion as the votes of the other shareholders of the Company.

 

This proxy is irrevocable as it may affect rights of third parties.

 

The irrevocable proxy will remain in full force and effect until the consummation of an initial public offering of the company’s shares to the public pursuant to a prospectus under applicable securities laws, upon which it will terminate automatically.

 

This proxy shall be signed exactly as the Optionee’s name appears on his Option Grant Deed. Joint Optionees must each sign this proxy. If signed by an attorney in fact, the Power of Attorney must be attached.

 

I acknowledge and agree that if the Shares are held by a trustee, then such trustee shall be entitled to grant the Attorney-in-Fact a Proxy in substantially the form of this Proxy with respect to the Shares.

 

 

	
 
    	
 
    	
 
    
	
[Record Holder of   Securities]
    	
 
    	
Date

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