Document:

Exhibit 10.32

 

	

    

 

August 16, 2013

 

CONFIDENTIAL

 

OncoSec Medical Incorporated

9810 Summers Ridge Road, Suite 110

San Diego, CA 92121

Attn: Punit Dhillon

 

Dear Mr. Dhillon:

 

This letter (the “Agreement”) constitutes the agreement between H. C. Wainwright & Co., LLC (“Wainwright” or the “Placement Agent”) and OncoSec Medical Incorporated (the “Company”), that Wainwright shall serve as the lead placement agent for the Company, on a “reasonable best efforts” basis, in connection with the proposed placement (the “Placement”) of registered securities (the “Securities”) of the Company, including shares of the Company’s common stock, par value $.0001 per share (the “Shares” or “Common Stock”) and warrants to purchase shares of Common Stock, pursuant to the Registration Statement (as that term is defined in Section 2(A) below). The terms of such Placement and the Securities shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”) and nothing herein constitutes that Wainwright would have the power or authority to bind the Company or any Purchaser or an obligation for the Company to issue any Securities or complete the Placement. This Agreement and the documents executed and delivered by the Company and the Purchasers in connection with the Placement shall be collectively referred to herein as the “Transaction Documents.” The date of the closing of the Placement shall be referred to herein as the “Closing Date.” The Company expressly acknowledges and agrees that the execution of this Agreement does not constitute a commitment by Wainwright to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the success of Wainwright with respect to securing any other financing on behalf of the Company. Wainwright shall perform all services hereunder in compliance with applicable law, including securities laws relating to the solicitation of purchasers.

 

SECTION 1.                            COMPENSATION AND OTHER FEES.

 

As compensation for the services provided by hereunder, the Company agrees to pay to Wainwright and other participating broker-dealers:

 

 H.C. Wainwright & Co., LLC — 570 Lexington Avenue, New York, New York 10022

212-356-0500 — www.hcwco.com

Member: FINRA, SIPC

 

 

(A)                               The fees set forth below with respect to the Placement:

 

1.              A cash fee payable immediately upon the closing of the Placement and equal to 6% of the aggregate gross proceeds raised in the Placement, excluding any proceeds from the exercise of any warrants sold in the Placement (the “Placement Agent Fee”). The parties hereby acknowledge and agree that the Company may choose to pay an aggregate cash fee equal to up to 40% of the Placement Agent Fee directly to additional broker-dealer(s) who are members of the Financial Industry Regulatory Authority (“FINRA”).

 

For purposes of clarification, the aggregate amount of the cash fee payable in the Placement to all participating broker-dealers shall not exceed 6% of the aggregate gross proceeds raised in the Placement.

 

2. Such number of warrants (the “Wainwright Warrants”) to Wainwright or its designees at the Closing to purchase shares of Common Stock equal to 5% of the aggregate number of Shares sold in the Placement (excluding any shares of Common Stock issuable upon exercise of any warrants issued in the Placement). The Wainwright Warrants shall have the same terms as the warrants (if any) issued to the Purchasers in the Placement except that the exercise price shall be 125% of the public offering price per share and the expiration date shall be five years from the effective date of the registration statement referred to in Section 2(A) below. The Wainwright Warrants shall not have antidilution protections or be transferable for six months from the date of effectiveness or commencement of sales of the public offering, except as permitted by the FINRA Rule 5110(g), and further, the number of shares and terms of the underlying the Wainwright Warrants shall be reduced or modified if necessary to comply with FINRA rules or regulations. The parties hereby acknowledge and agree that the Company may choose to issue warrants, directly to additional broker-dealer(s) who are members of FINRA, to purchase such aggregate number of shares of Common Stock equal to up to 40% of the Wainwright Warrants. For purposes of clarification, the aggregate number of shares of Common Stock underlying the warrants issued to FINRA member firms in this Placement shall not exceed 5% of the aggregate number of Shares sold in the Placement (excluding any shares of Common Stock issuable upon exercise of any warrants issued in the Placement).

 

(B)                               The Company also agrees to pay to Wainwright a non-accountable expense allowance in an amount equal to 1% of the aggregate gross proceeds raised in the Placement (provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement). Such expense allowance shall be payable immediately upon (but only in the event of) the closing of the Placement.

 

SECTION 2.                            REGISTRATION STATEMENT.

 

The Company represents and warrants to, and agrees with, the Placement Agent that:

 

(A)                               The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 under the Securities Act of 1933, as amended (the “Securities Act”), file number 333-189516. The Company will use best efforts to cause the registration statement to become effective pursuant to Rule 430A, and will file with the Commission pursuant to Rules 430A and 424(b) under the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder, a final prospectus included in such registration statement relating to the placement of the Securities and the plan of distribution thereof and will advise the Placement Agent of all further information (financial and other) with respect to the Company required to be set forth therein. Such registration statement, including the exhibits thereto, as amended as of its

 

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effective date and as of the Closing, is hereinafter called the “Registration Statement”; such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base Prospectus”; and the amended or supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rules 430A and 424(b) (including the Base Prospectus as so amended or supplemented) is hereinafter called the “Prospectus Supplement.” Any reference in this Agreement to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-1 which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All references in this Agreement to financial statements and schedules and other information that is “contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is or is deemed to be incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus Supplement, as the case may be.

 

(B)                              The Registration Statement (and any further documents to be filed with the Commission) will contain all exhibits and schedules as required by the Securities Act. The Registration Statement, at the time it becomes effective, will comply in all material respects with the Securities Act and the Exchange Act and the applicable Rules and Regulations and will not and, as amended or supplemented, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Base Prospectus, and the Prospectus Supplement, each as of its respective date, will comply in all material respects with the Securities Act and the Exchange Act and the applicable Rules and Regulations. Each of the Base Prospectus and the Prospectus Supplement, as amended or supplemented, will not contain as of the respective dates thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty as to written information contained in the Registration Statement, the Base Prospectus and the Prospectus Supplement, including any amendments or supplements thereto, furnished in writing directly to the Company by Wainwright expressly for use therein. The Incorporated Documents, if any, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus Supplement), in light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated by reference in the Base Prospectus or Prospectus Supplement, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to be described in the Base Prospectus, or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, that will not have been described or filed as required.

 

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(C)                              The Company will not, without the prior consent of the Placement Agent or except as required by law, prepare, use or refer to, any free writing prospectus.

 

(D)                              The Company will as promptly as practicable deliver, to the Placement Agent complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Base Prospectus, and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the Placement Agent reasonably requests. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Shares other than the Base Prospectus, the Prospectus Supplement, the Registration Statement, copies of the documents incorporated by reference therein and any other materials permitted by the Securities Act.

 

(E)                               The Company shall cooperate with the Placement Agent in making the filing required by FINRA Rule 5110, including the payment of the filing fee required by FINRA thereunder; and shall cooperate in making all Blue Sky filings in such reasonable number of states as requested by the Placement Agent, and the Company shall directly pay all filing fees required in connection therewith and the reasonable fees of the Placement Agent’s Blue Sky counsel.

 

SECTION 3.                           REPRESENTATIONS AND WARRANTIES. Except as set forth under the corresponding section of the Disclosure Schedules, which shall be deemed a part hereof, the Company hereby makes the representations and warranties set forth below to the Placement Agent.

 

(A)                              Organization and Qualification. OncoSec Medical Therapeutics Incorporated (the “Subsidiary”) is the sole direct or indirect subsidiary of the Company. The Company owns, directly or indirectly, all of the capital stock or other equity interests of such Subsidiary free and clear of any “Liens” (which for purposes of this Agreement shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction), and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. Each of the Company and the Subsidiary is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor the Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiary is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no “Proceeding” (which for purposes of this Agreement shall mean any action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened) has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(B)                              Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and

 

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delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been or will be duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection therewith other than in connection with the “Required Approvals” (as defined in subsection 3(D) below). Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

(C)                              No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company, the issuance and sale of the Securities and the consummation by the Company of the other transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(D)                              Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other “Person” (defined as an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind, including, without limitation, any Trading Market) in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than such filings as are required to be made under applicable Federal and state securities laws (collectively, the “Required Approvals”).

 

(E)                               Issuance of the Securities; Registration. Upon receipt of the Securities, the Purchasers will have good and marketable title to such Securities and, following conversion of the Securities in accordance with the applicable Transaction Documents, the Shares underlying the Securities will be freely tradable on the OTC Bulletin Board (the “Trading Market”). As of the Closing Date:

 

(i)                                                      The Securities will be duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents;

(ii)                                                   The Company shall have reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to the Transaction Documents;

(iii)                                                The issuance by the Company of the Securities shall have been registered under the Securities Act and all of the Securities shall be freely transferable and tradable by the

 

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Purchasers without restriction (other than any restrictions arising solely from an act or omission of a Purchaser).

(iv)                                               The Securities shall be issued pursuant to an effective registration statement and the issuance of the Securities has been registered by the Company under the Securities Act. Prior to the Closing, the Registration Statement will be effective and available for the issuance of the Securities thereunder and the Company has not received any notice that the Commission does not intend to declare the registration statement effective.

(v)                                                  The “Plan of Distribution” section under the Registration Statement shall permit the issuance and sale of the Securities hereunder.

 

(F)                                Capitalization. The capitalization of the Company shall be set forth in the Registration Statement. Except as set forth in the SEC Reports, the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plan and pursuant to the conversion or exercise of securities exercisable, exchangeable or convertible into Common Stock (“Common Stock Equivalents”). Other than pursuant to that certain Securities Purchase Agreement dated June 21, 2011, by and among the Company and the investor signatories thereto, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except pursuant to the Company’s 2011 Stock Incentive Plan, as set forth in the SEC Reports or as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

(G)                              SEC Reports; Financial Statements. The Company has complied in all material respects with requirements to file all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. Other than the Company’s Form 10-Q for the quarter ended October 31, 2010, filed with the Securities and Exchange Commission on December 20, 2010, which contained an incorrect disclosure within Item 4, Controls and Procedures, as of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material

 

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fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(H)                             Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or “Affiliate” (defined as any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act), except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3(H), no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed 1 Trading Day prior to the date that this representation is made.

 

(I)                                  Litigation. There is no action, suit, inquiry, notice of violation, Proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company, and neither the Company or any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. No executive officer, to the knowledge of the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement

 

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or any restrictive covenant, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(J)                                  Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company which could reasonably be expected to result in a Material Adverse Effect.

 

(K)                             Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each case as could not have a Material Adverse Effect.

 

(L)                               Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

(M)                           Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance.

 

(N)                              Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other similar intellectual property rights necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a notice (written or otherwise) that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any third party. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights of others. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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(O)                               Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate subscription amount under the Transaction Documents.  To the best knowledge of the Company, such insurance contracts and policies are accurate and complete.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

(P)                                 Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(Q)                               Sarbanes-Oxley.  The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the date hereof and will be in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it on the Closing Date.

 

(R)                               Certain Fees.  Except as otherwise provided in this Agreement, no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

(S)                                 Trading Market Rules.  The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

 

(T)                                Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.

 

(U)                               Registration Rights.  No Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company, other than the obligations pursuant to that certain Registration Rights Agreement between the Company and certain investors dated June 24, 2011.

 

(V)                               Listing and Maintenance Requirements.  The Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is

 

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contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

 

(W)                            Application of Takeover Protections.  The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

 

(X)                               Solvency.  Based on the financial condition of the Company as of the Closing Date after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.  The SEC Reports set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(Y)                           Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a material tax deficiency which has been asserted or threatened against the Company or any Subsidiary.

 

(Z)                                Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to

 

10

 

disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is  in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

(AA)                      Accountants.  The Company’s accountants are named in the Prospectus Supplement.  To the knowledge of the Company, such accountants, who the Company expects will express their opinion with respect to the financial statements to be included in the Company’s next Annual Report on Form 10-K, are a registered public accounting firm as required by the Securities Act.

 

(BB)                      Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities (other than for the Placement Agent’s placement of the Securities), or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company.

 

(CC)                      Approvals.  The issuance and listing on the Trading Market of the Shares requires no further approvals, including but not limited to, the approval of shareholders.

 

(DD)                     FINRA Affiliations.  There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or greater stockholder of the Company, except as set forth in the Base Prospectus.

 

SECTION 4.                            ENGAGEMENT TERM.  Wainwright’ engagement hereunder will terminated upon the closing of the Placement (the “Term”).  The engagement may be terminated by Wainwright at any time upon 10 days’ written notice, or by the Company at any time before the end of the Term upon 10 days’ written notice.  Notwithstanding anything to the contrary contained herein, the provisions in this Agreement concerning indemnification and contribution will survive any expiration or termination of this Agreement.  Upon any termination of this Agreement, the Company’s obligation to pay Wainwright any fees actually earned on closing of the Placement and otherwise payable under Section 1(A), shall survive any expiration or termination of this Agreement, as permitted by FINRA Rule 5110(f)(2)(d).  Upon any termination of this Agreement, the Company’s obligation to reimburse Wainwright for out of pocket accountable expenses actually incurred by Wainwright and reimbursable upon closing of the Placement pursuant to Section 1(B), if any are otherwise due under Section 1(B) hereof, will survive any expiration or termination of this Agreement, as permitted by FINRA Rule 5110(f)(2)(d).

 

If the Placement is not consummated, Wainwright shall be entitled to Placement Agent Fee and Wainwright Warrants, calculated in the manner provided herein, with respect to any public or private offering of equity or equity-linked securities of the Company of any kind (“Tail Financing”) to the extent that such financing or capital is provided to the Company by investors whom Wainwright had introduced to the Company and are set forth on a written list provided by Wainwright to the Company by the Closing Date or within five (5) days of the earlier termination of this agreement (the “Investors”), if such Tail Financing is consummated at any time during the Term or within 6 months following the expiration or termination of this Agreement (the “Tail Period”).

 

SECTION 5.                            WAINWRIGHT INFORMATION.  The Company agrees that any information or advice rendered by Wainwright in connection with this engagement is for the confidential use of the Company only in their evaluation of the Placement and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information in any manner without Wainwright’ prior written consent.

 

11

 

SECTION 6.                            NO FIDUCIARY RELATIONSHIP.  This Agreement does not create, and shall not be construed as creating rights enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof.  The Company acknowledges and agrees that Wainwright is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of Wainwright hereunder, all of which are hereby expressly waived.

 

SECTION 7.                            CLOSING.   The obligations of the Placement Agent and the Purchasers, and the closing of the sale of the Securities hereunder are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company and its Subsidiaries contained herein, to the accuracy of the statements of the Company and its Subsidiaries made in any certificates pursuant to the provisions hereof, to the performance by the Company and its Subsidiaries of their obligations hereunder, and to each of the following additional terms and conditions:

 

(A)                               No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the Commission, and any request for additional information on the part of the Commission (to be included in the Registration Statement, the Base Prospectus or the Prospectus Supplement or otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agent.

 

(B)                              The Placement Agent shall not have discovered and disclosed to the Company on or prior to the Closing Date that the Registration Statement, the Base Prospectus or the Prospectus Supplement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Placement Agent, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading.

 

(C)                              All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of this Agreement, the Securities, the Registration Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Placement Agent, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

 

(D)                              The Placement Agent shall have received from outside counsel to the Company such counsel’s written opinion, addressed to the Placement Agent and the Purchasers dated as of the Closing Date, in form and substance reasonably satisfactory to the Placement Agent.

 

(E)                           The Company and the Placement Agent shall have entered into an escrow agreement with a commercial bank or trust company reasonably satisfactory to both parties pursuant to which the Purchasers shall deposit their subscription funds in an escrow account and the Company and the Placement Agent shall jointly authorize the disbursement of the funds from the escrow account.  The Company shall pay the reasonable fees of the escrow agent.

 

(F)                                Neither the Company nor any of its Subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Base Prospectus, any loss or interference with its business from fire, explosion, flood, terrorist act or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in or contemplated by the Base Prospectus and (ii) since such date there shall not have been any change in the capital stock or long-term debt of the Company or any of its Subsidiaries or any change, or any development involving a prospective change, in or affecting the business, general

 

12

 

affairs, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its Subsidiaries, otherwise than as set forth in or contemplated by the Base Prospectus, the effect of which, in any such case described in clause (i) or (ii), is, in the judgment of the Placement Agent, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner contemplated by the Base Prospectus and the Prospectus Supplement.

 

(G)                              The Common Stock is registered under the Exchange Act and, as of the Closing Date, the Shares shall be listed and admitted and authorized for trading on the Trading Market, and satisfactory evidence of such actions shall have been provided to the Placement Agent.  The Company shall have taken no action designed to, or likely to have the effect of terminating the registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from the Trading Market, nor has the Company received any information suggesting that the Commission or the Trading Market is contemplating terminating such registration or listing.

 

(H)                             Subsequent to the execution and delivery of this Agreement, there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange, the Nasdaq National Market or the NYSE MKT or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or minimum or maximum prices or maximum ranges for prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by federal or state authorities or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, (iii) the United States shall have become engaged in hostilities in which it is not currently engaged, the subject of an act of terrorism, there shall have been an escalation in hostilities involving the United States, or there shall have been a declaration of a national emergency or war by the United States, or (iv) there shall have occurred any other calamity or crisis or any change in general economic, political or financial conditions in the United States or elsewhere, if the effect of any such event in clause (iii) or (iv) makes it, in the sole judgment of the Placement Agent, impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner contemplated by the Base Prospectus and the Prospectus Supplement.

 

(I)                                  No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Securities or materially and adversely affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Securities or materially and adversely affect or potentially and adversely affect the business or operations of the Company.

 

(J)                                  The Company shall have entered into subscription agreements with each of the Purchasers and such agreements shall be in full force and effect and shall contain representations and warranties of the Company as agreed between the Company and the Purchasers.

 

(K)                              FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement.  In addition, the Company shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer Filing with FINRA pursuant to FINRA Rule 5110 with respect to the Registration Statement and pay all filing fees required in connection therewith.

 

(L)                               Prior to the Closing Date, the Company shall have furnished to the Placement Agent such further information, certificates and documents as the Placement Agent may reasonably request.

 

13

 

All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Placement Agent.

 

SECTION 8.                            INDEMNIFICATION.                       (A)  To the extent permitted by law, the Company will indemnify Wainwright and its affiliates, stockholders, directors, officers, employees and controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) against all losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relating to or arising out of its activities hereunder or pursuant to this engagement letter, except to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted primarily and directly from Rodman’s willful misconduct or gross negligence in performing the services described herein.

 

(B)                               Promptly after receipt by Wainwright of notice of any claim or the commencement of any action or proceeding with respect to which Wainwright is entitled to indemnity hereunder, Wainwright will notify the Company in writing of such claim or of the commencement of such action or proceeding, but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights and defenses.  If the Company so elects or is requested by Wainwright, the Company will assume the defense of such action or proceeding and will employ counsel reasonably satisfactory to Wainwright and will pay the fees and expenses of such counsel.  Notwithstanding the preceding sentence, Wainwright will be entitled to employ counsel separate from counsel for the Company and from any other party in such action if counsel for Wainwright reasonably determines that it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company and Wainwright.  In such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by the Company, in addition to local counsel.  The Company will have the exclusive right to settle the claim or proceeding provided that the Company will not settle any such claim, action or proceeding without the prior written consent of Wainwright, which will not be unreasonably withheld.

 

(C)                               The Company agrees to notify Wainwright promptly of the assertion against it or any other person of any claim or the commencement of any action or proceeding relating to a transaction contemplated by this engagement letter.

 

(D)                               If for any reason the foregoing indemnity is unavailable to Wainwright or insufficient to hold Wainwright harmless, then the Company shall contribute to the amount paid or payable by Wainwright as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and Wainwright on the other, but also the relative fault of the Company on the one hand and Wainwright on the other that resulted in such losses, claims, damages or liabilities, as well as any relevant equitable considerations.  The amounts paid or payable by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees and expenses incurred in defending any litigation, proceeding or other action or claim.  Notwithstanding the provisions hereof, Wainwright’ share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received, by Wainwright under this engagement letter (excluding any amounts received as reimbursement of expenses incurred by Wainwright).

 

(E)                                These indemnification provisions shall remain in full force and effect whether or not the transaction contemplated by this engagement letter is completed and shall survive the termination of this engagement letter, and shall be in addition to any liability that the Company might otherwise have to any indemnified party under this engagement letter or otherwise.

 

14

 

SECTION 9.                            GOVERNING LAW.  This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State.  This Agreement may not be assigned by either party without the prior written consent of the other party.  This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived.  Any dispute arising under this Agreement may be brought into the courts of the State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

SECTION 10.                     ENTIRE AGREEMENT/MISC.  This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof.  If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect.  This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by both Wainwright and the Company.  The representations, warranties, agreements and covenants contained herein shall survive the closing of the Placement and delivery and/or exercise of the Securities, as applicable.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof.

 

SECTION 11.                     NOTICES.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages hereto.

 

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Wainwright a copy of this Agreement.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
H. C. WAINWRIGHT & CO., LLC
    

 

15

 

	
 
    	
By:
    	
/s/ Mark Viklund
    
	
 
    	
 
    	
Name:
    	
Mark   Viklund
    
	
 
    	
 
    	
Title:
    	
CEO,   Investment Banking
    
	
 
    	
 
    
	
 
    	
Address for notice:
    
	
 
    	
570   Lexington Avenue
    
	
 
    	
20th Floor
    
	
 
    	
New   York, NY 10022
    
	
 
    	
Fax:
    
	
 
    	
Attention:   Head of Investment Banking
    

 

 

Accepted and Agreed to as of

the date first written above:

 

	
ONCOSEC   MEDICAL INCORPORATED
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/Punit Dhillon
    	
 
    
	
 
    	
Punit   Dhillon
    	
 
    
	
 
    	
Chief Executive Officer
    	
 
    

 

16Exhibit 4.35

 

EXECUTION VERSION

	
 
    

 

FIFTH SUPPLEMENTAL INDENTURE

 

INTERNATIONAL TRANSMISSION COMPANY

 

TO

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

 

Trustee

 

 

Dated as of August 7, 2013

 

 

Supplementing the First Mortgage and Deed of Trust

Dated as of July 15, 2003

 

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS

 

Establishing a series of Securities designated 4.625% First Mortgage Bonds, Series E,

 

due August 15, 2043

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE ONE DEFINITIONS AND   OTHER PROVISIONS OF GENERAL APPLICATION
    	
5
    
	
 
    	
 
    	
 
    
	
Section 101.
    	
Definitions
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE TWO TITLE,   FORM AND TERMS OF THE SERIES E BONDS
    	
7
    
	
 
    	
 
    	
 
    
	
Section 201.
    	
Title of the Series E Bonds
    	
7
    
	
Section 202.
    	
Form and Terms of the Series E Bonds
    	
7
    
	
Section 203.
    	
Execution and Authentication
    	
9
    
	
Section 204.
    	
Depositary for Global Securities
    	
9
    
	
Section 205.
    	
Place of Payment
    	
9
    
	
Section 206.
    	
Legends
    	
10
    
	
Section 207.
    	
Restrictions on Transfer and Exchange of Series E   Bonds
    	
13
    
	
Section 208.
    	
Book-Entry Provisions for Restricted Global Securities and   Regulation S Global Securities
    	
14
    
	
Section 209.
    	
Special Transfer Provisions
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE THREE REDEMPTION
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE FOUR MAINTENANCE AND   RENEWAL
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE FIVE REPORTS
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE SIX NET EARNINGS   CERTIFICATE
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE SEVEN LIEN
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE EIGHT AMENDMENTS TO   INDENTURE
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE NINE EFFECTIVENESS   OF PROVISIONS
    	
26
    
	
 
    	
 
    	
 
    
	
ARTICLE TEN MISCELLANEOUS   PROVISIONS
    	
27
    

 

i

 

FIFTH SUPPLEMENTAL INDENTURE, dated as of August 7, 2013, between International Transmission Company, a corporation organized and existing under the laws of the State of Michigan (herein called the “Company”), having its principal office at 27175 Energy Way, Novi, MI 48377 and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (as successor to BNY MIDWEST TRUST COMPANY), a national banking association, as Trustee (herein called the “Trustee”), the office of the Trustee at which on the date hereof its corporate trust business is principally administered being 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602.

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee a First Mortgage and Deed of Trust dated as of July 15, 2003 (the “Original Indenture”) providing for the issuance by the Company from time to time of its bonds, notes and other evidence of indebtedness to be issued in one or more series (in the Original Indenture and herein called the “Securities”) and to provide security for the payment of the principal of and premium, if any, and interest, if any, on the Securities; and for the purpose of amending and supplementing and further confirming the lien of the Indenture;

 

WHEREAS, the Company has heretofore executed and delivered the following Supplemental Indentures, each dated as hereinafter set forth:

 

	
Instrument
    	
 
    	
Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
First Supplemental Indenture
    	
 
    	
July 15, 2003
    	
 
    
	
Second Supplemental Indenture
    	
 
    	
July 15, 2003
    	
 
    
	
Amendment to Second Supplemental Indenture 
    	
 
    	
January 19, 2005 
    	
 
    
	
Second Amendment to Second Supplemental Indenture
    	
 
    	
March 24, 2006
    	
 
    
	
Third Supplemental Indenture
    	
 
    	
March 28, 2006
    	
 
    
	
Fourth Supplemental Indenture
    	
 
    	
March 25, 2008
    	
 
    

 

WHEREAS, the Original Indenture and the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture listed in the foregoing paragraph were recorded in the offices set forth in Exhibit A attached hereto and incorporated herein by reference;

 

WHEREAS, there have heretofore been issued under the Indenture Securities of series and in principal amounts as follows:

 

 

	
Title
    	
 
    	
Issued
    	
 
    	
Principal
   Amount
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.45% First Mortgage Bonds, Series A, due   July 15, 2013(1)
    	
 
    	
July 16, 2003
    	
 
    	
$
    	
185,000,000
    	
 
    
	
First Mortgage Bonds, Series B, due   March 10, 2010(1)
    	
 
    	
July 16, 2003 
    	
 
    	
$
    	
15,000,000
    	
 
    
	
 
    	
 
    	
January 4, 2004 
    	
 
    	
$
    	
10,000,000 
    	
 
    
	
 
    	
 
    	
January 19, 2005
    	
 
    	
$
    	
50,000,000
    	
 
    
	
6.125% First Mortgage Bonds, Series C, due   March 31, 2036
    	
 
    	
March 28, 2006
    	
 
    	
$
    	
100,000,000
    	
 
    
	
5.75% First Mortgage Bonds, Series D, due   April 1, 2018
    	
 
    	
April 1, 2008
    	
 
    	
$
    	
100,000,000
    	
 
    

 

WHEREAS, in addition to the property described in the Original Indenture, the Company has acquired certain other property, rights and interests in property; and

 

WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Original Indenture and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Trustee this Fifth Supplemental Indenture (the “Fifth Supplemental Indenture”) to the Original Indenture as permitted by Sections 2.01, 3.01, 4.01, 4.02 and 14.01 of the Original Indenture in order to establish the form or terms of, and to provide for the creation and issuance of, a series of Securities to be designated and in such initial aggregate principal amount as further set out in Section 202 and Article Eight hereof; and

 

WHEREAS, all things necessary to make the Securities issued pursuant to this Fifth Supplemental Indenture, when executed by the Company and authenticated and delivered by the Trustee or any Authenticating Agent and issued upon the terms and subject to the conditions hereinafter and in the Original Indenture set forth against payment therefor, the valid, binding and legal obligations of the Company and to make this Fifth Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

 

GRANTING CLAUSES

 

NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH that, in order to establish the terms of a series of Securities, and for and in consideration of the premises and of the covenants contained in the Original Indenture and in this Fifth Supplemental Indenture and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and in order to secure the payment of the principal of and premium, if any, and interest, if any, on all Securities from time to time Outstanding and the performance of the covenants therein and herein contained and to declare the terms and conditions on which such Securities are secured, the Company hereby grants, bargains, sells, conveys, assigns, transfers, mortgages, pledges, sets over and confirms to the Trustee, and grants to the Trustee a security interest in, the following (subject, however, to the terms and conditions set forth in the Original Indenture and herein):

 

(1)  The principal amounts of the First Mortgage Bonds, Series A, due July 15, 2013 and the First Mortgage Bonds, Series B, due March 10, 2010 have been repaid in full and are no longer outstanding.

 

2

 

Granting Clause First

 

All right, title and interest of the Company, as of the date of the execution and delivery of the Original Indenture, as originally executed and delivered, in and to all property, real, personal and mixed, located in the State of Michigan (other than Excepted Property), including without limitation all right, title and interest of the Company in and to the following property so located (other than Excepted Property):  (a) all real property owned in fee, easements and other interests in real property which are specifically described or referred to in Exhibit A attached to the Original Indenture, Exhibit D attached to the Third Supplemental Indenture, Exhibit D attached to the Fourth Supplemental Indenture and Exhibit D attached hereto and incorporated by reference herein; (b) all licenses, permits to use the real property of others, franchises to use public roads, streets and other public properties, rights of way and other rights or interests relating to the occupancy or use of real property; (c) all facilities, machinery, equipment and fixtures for the transmission and distribution of electric energy including, but not limited to, all plants, air and water pollution control and sewage and solid waste disposal facilities, switchyards, towers, substations, transformers, poles, lines, cables, conduits, ducts, conductors, meters, regulators and all other property used or to be used for any or all of such purposes; (d) all buildings, offices, warehouses, structures or improvements in addition to those referred to or otherwise included in clauses (a) and (c) above; (e) all computers, data processing, data storage, data transmission and/or telecommunications facilities, equipment and apparatus necessary for the operation or maintenance of any facilities, machinery, equipment or fixtures described or referred to in clause (c) above; (f) all of the foregoing property in the process of construction; and (g) (except as expressly excepted in the Original Indenture or herein) all the right, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore described;

 

Granting Clause Second

 

Subject to the applicable exceptions permitted by Section 8.09(d), Section 13.03 and Section 13.05 of the Original Indenture, all right, title and interest of the Company in all property of every kind and description and wheresoever situate, real, personal and mixed (other than Excepted Property), including the properties described in Exhibit D hereto, which may have been acquired by the Company after the date of the Original Indenture or be hereafter acquired, it being the intention of the Company that all such property acquired by the Company after the date of the execution and delivery of the Original Indenture, and any Indentures supplemental thereto, including this Fifth Supplemental Indenture, as originally executed and delivered, shall be as fully embraced within and subjected to the Lien hereof as if such property were owned by the Company as of the date of the execution and delivery of the Original Indenture, and any Indentures supplemental thereto, including this Fifth Supplemental Indenture, as originally executed and delivered;

 

Granting Clause Third

 

Any Excepted Property, which may, from time to time after the date of the execution and delivery of this Fifth Supplemental Indenture, as originally executed and delivered, by delivery or by an instrument supplemental to this Fifth Supplemental Indenture, be 

 

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subjected to the Lien hereof by the Company, the Trustee being hereby authorized to receive the same at any time as additional security hereunder; it being understood that any such subjection to the Lien hereof of any Excepted Property as additional security may be made subject to such reservations, limitations or conditions respecting the use and disposition of such property or the proceeds thereof as shall be set forth in such instrument; and

 

Granting Clause Fourth

 

All tenements, hereditaments, servitudes and appurtenances belonging or in any wise appertaining to the aforesaid property, with the reversions and remainders thereof;

 

Excepted Property

 

Expressly excepting and excluding, however, from the Lien of the Indenture all right, title and interest of the Company in and to all Excepted Property, whether now owned or hereafter acquired;

 

TO HAVE AND TO HOLD all such property, real, personal and mixed, unto the Trustee, its successors in trust and their assigns forever;

 

SUBJECT, HOWEVER, to (a) Liens existing at the date of the execution and delivery of the Original Indenture, as originally executed and delivered, (b) as to property acquired by the Company after the date of the execution and delivery of the Original Indenture, as originally executed and delivered, Liens existing or placed thereon at the time of the acquisition thereof (including, but not limited to, Purchase Money Liens) and (c) Permitted Liens;

 

IN TRUST, NEVERTHELESS, for the equal and ratable benefit and security of the Holders from time to time of all Outstanding Securities without any priority of any such Security over any other such Security;

 

PROVIDED, HOWEVER, that the right, title and interest of the Trustee in and to the Mortgaged Property shall cease, terminate and become void in accordance with, and subject to the conditions set forth in, Article IX of the Original Indenture, and if, thereafter, the principal of and premium, if any, and interest, if any, on the Securities shall have been paid to the Holders thereof, or shall have been paid to the Company pursuant to Section 6.03 of the Original Indenture, then and in that case the Original Indenture shall terminate, and, upon request of the Company, the Trustee shall execute and deliver to the Company such instruments as the Company shall require to evidence such termination; otherwise the Original Indenture, and the estate and rights hereby granted, shall be and remain in full force and effect; and

 

THE PARTIES HEREBY COVENANT AND AGREE as follows:

 

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ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS
 OF GENERAL APPLICATION

 

Section 101.                             Definitions.  Each capitalized term that is used herein and is defined in the Original Indenture shall have the meaning specified in the Original Indenture unless such term is otherwise defined herein.

 

“Adjusted Treasury Rate” means, with respect to any Redemption Date, the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (or if no maturity is within three months before or after the remaining term of the bonds, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Adjusted Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

 

“Agent Member” has the meaning given to such term in Section 208(a) hereof.

 

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Series E Bonds to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities having a maturity comparable to the remaining term of such bonds, or, if, in the reasonable judgment of the Independent Investment Banker, there is no such security, then the Comparable Treasury Issue will mean the United States Treasury security or securities selected by the Independent Investment Banker as having an actual or interpolated maturity or maturities comparable to the remaining term of such Series E Bonds.

 

“Comparable Treasury Price” means (i) the average of four Reference Treasury Dealer Quotations for the applicable Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.

 

“Definitive Securities” has the meaning given to such term in Section 202(e) hereof.

 

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“Depositary” means DTC, together with any Person succeeding thereto by merger, consolidation or acquisition of all or substantially all of its assets, including substantially all of its securities payment and transfer operations.

 

“Distribution Compliance Period” has the meaning given to such term in Section 202(c) hereof.

 

“DTC” means The Depository Trust Company, a New York corporation, having a principal office at 55 Water Street, New York, New York 10041-0099.

 

“Global Securities” means a Series E Bond issued in global form in the name of the Depositary or its nominee.

 

“Indenture” means the Original Indenture, as amended and supplemented by any and all indentures supplemental thereto, including this Fifth Supplemental Indenture.

 

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company to act as the “Independent Investment Banker.”

 

“Issue Date” means August 14, 2013, the date on which the Series E Bonds are originally issued under this Fifth Supplemental Indenture.

 

“Non-U.S. Person” means any person not a “U.S. person” as defined in Regulation S.

 

“Permanent Regulation S Global Security” has the meaning given to such term in Section 202(c) hereof.

 

“QIB” means “qualified institutional buyer” as defined in Rule 144A under the Securities Act.

 

“Reference Treasury Dealer” means each of (i) Barclays Capital Inc. and its successors, (ii) Goldman, Sachs & Co. and its successors and (iii) two other primary U.S. Government securities dealers in New York City (each, a “Primary Treasury Dealer”) to be selected by the Company; provided, however, that if any of the foregoing is not a Primary Treasury Dealer, the Company will appoint another Primary Treasury Dealer as a substitute.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the third business day next preceding such Redemption Date.

 

“Regulation S” means Regulation S promulgated under the Securities Act.

 

“Regulation S Definitive Security” has the meaning given to such term in Section 208(c) hereof.

 

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“Regulation S Global Security” has the meaning given to such term in Section 202(c) hereof.

 

“Regulation S Securities” means Series E Bonds offered and sold as part of their initial distribution to persons outside the United States in accordance with Regulation S under the Securities Act.

 

“Restricted Definitive Securities” means each of the Definitive Securities that are required to bear the Restricted Legend.

 

“Restricted Global Security” has the meaning given to such term in Section 202(b) hereof.

 

“Restricted Legend” has the meaning given to such term in Section 206(a) hereof.

 

“Restricted Securities” has the meaning given to such term in Section 206(a) hereof.

 

“Rule 144A” means Rule 144A under the Securities Act.

 

“Rule 144A Definitive Securities” has the meaning given to such term in Section 208(c) hereof.

 

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

 

“Series E Bonds” has the meaning given to such term in Section 201 hereof.

 

“Significant Subsidiary” means any Subsidiary of the Company that 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 Issue Date.

 

“Temporary Regulation S Global Security” has the meaning given to such term in Section 202(c) hereof.

 

ARTICLE TWO

 

TITLE, FORM AND TERMS OF THE SERIES E BONDS

 

Section 201.                             Title of the Series E Bonds.  This Fifth Supplemental Indenture hereby creates a series of Securities designated as the “4.625% First Mortgage Bonds, Series E, due August 15, 2043” of the Company (the “Series E Bonds”).

 

Section 202.                             Form and Terms of the Series E Bonds.  For purposes of the Original Indenture, the Series E Bonds shall constitute a single series of Securities and may be issued in an unlimited principal aggregate amount, although the initial issuance of the Series E Bonds shall be in the principal amount of $285,000,000.  In accordance with Sections 2.01 and 3.01 of the Original Indenture, this Fifth Supplemental Indenture hereby provides that the Series E Bonds (x) shall be payable in such amounts and in the manner as set forth therein (the form of which is substantially as set forth in Exhibit B attached hereto) and in the Original Indenture at the rates 

 

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specified in the Series E Bonds, (y) and shall have the form and such other terms as set forth in this Fifth Supplemental Indenture, the Series E Bonds and the Original Indenture (except to the extent specifically provided for in this Fifth Supplemental Indenture or in the Series E Bonds).

 

(a)  The Series E Bonds issued in transactions exempt from registration under the Securities Act shall be substantially in the form of Exhibit B attached hereto.  The Series E Bonds may have such notations, legends or endorsements approved as to form by the Company and required, as applicable, by law, stock exchange or depository rule, agreements to which the Company is subject and/or usage.  The terms of the Series E Bonds set forth in Exhibit B are herein incorporated by reference and are part of the terms of this Fifth Supplemental Indenture.

 

(b)  The Series E Bonds will be offered and sold by the Company pursuant to the terms of a purchase agreement and will be resold initially only to (i) QIBs in reliance on Rule 144A and (ii) Non-U.S. Persons in reliance on Regulation S.  Each such purchaser of the Series E Bonds so initially resold will be deemed by their acceptance of the Series E Bonds to have represented and agreed as follows:  it (A) (i) is a QIB, (ii) is aware that the sale to it is being made in reliance on Rule 144A and (iii) is acquiring the Series E Bonds for its own account or for the account of a QIB or (B) is not a U.S. person and is purchasing the Series E Bonds in an offshore transaction pursuant to Regulation S.

 

(c)  The Series E Bonds initially resold in reliance on Rule 144A shall be issued, and will only be available, in the form of one or more Global Securities substantially in the form of Exhibit B attached hereto with such applicable legends as are provided for in Sections 206 and 208 (each, a “Restricted Global Security”) duly executed by the Company and duly authenticated by the Trustee as herein provided.  The Restricted Global Security shall be in definitive, fully registered form without coupons and be registered in the name of the Depositary or a nominee of the Depositary and deposited with the Trustee its corporate trust office, as custodian for the Depositary.  The aggregate principal amount of any Restricted Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee, as provided in Section 209 hereof, which adjustments shall be conclusive as to the aggregate principal amount of any such Global Security.

 

(d)  The Series E Bonds initially resold outside the United States in reliance on Regulation S shall be issued, and will only be available, initially in the form of one or more temporary global Securities substantially in the form of Exhibit B hereto with such applicable legends as are provided for in Sections 206 and 208 (the “Temporary Regulation S Global Security”) duly executed by the Company and duly authenticated by the Trustee as herein provided.  Except as herein provided, beneficial ownership interests in the Temporary Regulation S Global Security shall not be exchangeable for interests in the Restricted Global Security, the permanent Regulation S Global Securities substantially in the form of Exhibit B hereto (each, a “Permanent Regulation S Global Security”) duly executed by the Company and duly authenticated by the Trustee as herein provided or a Definitive Security prior to the expiration of the Distribution Compliance period and then only upon certification in accordance with Regulation S under the Securities Act, in form reasonably satisfactory to the Trustee, to the effect that beneficial ownership interests in such Temporary Regulation S Global Security are owned either by Non-U.S. Persons or U.S. Persons who purchased such interests in a transaction that did not require registration under the Securities Act.  The Temporary Regulation S Global

 

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Security and the Permanent Regulation S Global Security are collectively referred to herein as the “Regulation S Global Security.”  The Regulation S Global Securities shall be in definitive, fully registered form without coupons and be registered in the name of the Depositary or a nominee of the Depositary and deposited with the Trustee at its corporate trust office, as custodian for the Depositary, for credit initially and during the Distribution Compliance Period to the respective accounts of beneficial owners of such Series E Bonds (or to such other accounts as they may direct) at Euroclear Bank S.A./N.V. or Clearstream Banking, Société Anonyme.  As used herein, the term “Distribution Compliance Period,” with respect to the Regulation S Global Securities offered and sold in reliance on Regulation S, means the period of 40 consecutive days beginning on and including the later of (i) the day on which the Series E Bonds are first offered to persons other than distributors (as defined in Regulation S) in reliance on Regulation S and (ii) the Issue Date.  The aggregate principal amount of any Regulation S Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee, as provided in Section 209 hereof, which adjustments shall be conclusive as to the aggregate principal amount of any such Global Security.  The Restricted Global Security and Regulation S Global Security are sometimes collectively referred to herein as the “Global Securities.”

 

(e)  Series E Bonds issued pursuant to Section 208(c) in exchange for interests in a Global Security shall be issued substantially in the form of Exhibit B hereto in definitive, fully registered form without interest coupons, but shall not bear the legend for Global Securities in Section 208(b) (the “Definitive Securities”).  Except as provided herein, owners of beneficial interests in Global Securities shall not be entitled to physical delivery of Definitive Securities.

 

Section 203.                             Execution and Authentication.  The Trustee, upon a Company Order and pursuant to the terms of the Original Indenture and this Fifth Supplemental Indenture, shall authenticate and deliver Series E Bonds for original issue in an initial aggregate principal amount of $285,000,000.  Such Company Order shall specify the amount of the Series E Bonds to be authenticated, the date on which the original issue of Series E Bonds is to be authenticated and the aggregate principal amount of Series E Bonds outstanding on the date of authentication.  All of the Series E Bonds issued under the Indenture shall be treated as a single series for all purposes under the Indenture, including, without limitation, waivers, amendments, and offers to purchase.

 

Section 204.                             Depositary for Global Securities.  The Depositary for the Series E Bonds initially shall be DTC.

 

Section 205.                             Place of Payment.  The Place of Payment in respect of the Series E Bonds will be at the principal office or agency of the Company in The City of New York, State of New York or at the office or agency of the Trustee in The City of New York, State of New York which, at the date hereof, is located at c/o The Bank of New York, Trust Services Window, 101 Barclay Street, New York, New York 10286.

 

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Section 206.                             Legends.

 

(a)                                 All Series E Bonds issued pursuant to this Fifth Supplemental Indenture shall be “Restricted Securities” and shall bear a legend to the following effect (the “Restricted Legend”) except as permitted by the following paragraph (b), (c) or (d) , as appropriate:

 

“THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

 

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED IN THE NEXT PARAGRAPH), ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO REQUESTS), (V) TO THE COMPANY, OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

THE “RESALE RESTRICTION TERMINATION DATE” WILL BE THE DATE (1) THAT IS AT LEAST ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF AND (2) ON WHICH THE COMPANY INSTRUCTS THE TRUSTEE THAT THIS LEGEND SHALL BE DEEMED REMOVED

 

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FROM THIS SECURITY, IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE RELATING TO THIS SECURITY.”

 

Each Restricted Definitive Security shall bear the following legend on the face thereof:

 

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

 

Each Temporary Regulation S Global Security shall bear the following legend on the face thereof:

 

“EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY REPRESENTING AN INTEREST IN THE BONDS REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(B)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT.  DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.V. OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME AND ONLY (1) TO THE COMPANY, (2) WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (1) THROUGH (4) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS.  HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.

 

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BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE EXCHANGED FOR INTERESTS IN A RESTRICTED GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH RULE 144A, AND (2) THE TRANSFEROR OF THE TEMPORARY REGULATION S GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

 

BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL SECURITY MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS PRIOR TO THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE INTEREST TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK S.A./N.V. OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME.”

 

(b)                                 The Restricted Legend shall be deemed removed from the face of any Series E Bonds without further action of the Company, the Trustee or the Holder of such Series E Bonds at such time as the Company shall have delivered a free transferability certificate in customary form executed by an Officer to the Trustee certifying that the Restricted Legend can be removed because such Series E Bonds may be resold to the public in accordance with Rule 144 without regard to volume, manner of sale or any other restrictions contained in Rule 144 (other than the holding period requirement in paragraph (d)(1)(ii) of Rule 144 so long as such holding period requirement is satisfied at such time of determination) by Holders that are not Affiliates of the Company.

 

(c)                                  Upon any sale or transfer of a Restricted Security pursuant to Rule 144 under the Securities Act, the Depositary shall, subject to approval by the Company and the provisions of Section 3.05 of the Original Indenture, permit the Holder thereof to request the issuance of a Series E Bond that does not bear one or more of the legends set forth above and rescind any

 

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restrictions on the transfer of such Restricted Security, if the sale or exchange was made in reliance on Rule 144 and the Holder certifies to that effect in writing to the Depositary.

 

(d)                               Upon a sale or transfer after the expiration of the Distribution Compliance Period of any Series E Bonds acquired pursuant to Regulation S, all requirements that such Series E Bonds bear the Restricted Legend shall cease to apply (but requirements requiring such Series E Bonds to be in global form and bear the global legend in Section 208 shall continue to apply).

 

Section 207.                             Restrictions on Transfer and Exchange of Series E Bonds.  All Series E Bonds issued upon any registration of transfer or exchange of Series E Bonds shall be valid obligations of the Company, evidencing the same interest therein, and entitled to the same benefits under the Original Indenture and this Fifth Supplemental Indenture, as the Series E Bonds surrendered upon such registration of transfer or exchange.

 

A Holder may transfer a Series E Bond, or request that a Series E Bond be exchanged for Series E Bonds in authorized denominations and in an aggregate principal amount equal to the principal amount of such Series E Bond surrendered for exchange of other authorized denominations, by surrender of such Series E Bonds to the Trustee with the form of transfer notice thereon duly completed and executed, and otherwise complying with the terms of the Original Indenture and this Fifth Supplemental Indenture, including providing evidence of compliance with any restrictions on transfer, in form satisfactory to the Company, the Trustee and the Security Registrar.  No such transfer shall be effected until, and such transferee shall succeed to the rights of a Holder only upon, final acceptance and registration of the transfer by the Security Registrar in the Security Register.  Prior to the registration of any transfer of a Series E Bond by a Holder as provided herein, the Company, the Security Registrar, the Paying Agent and the Trustee shall deem and treat the person in whose name the Series E Bond is registered on the Security Register as the absolute owner and holder thereof for the purpose of receiving payment of all amounts payable with respect to such Series E Bond and for all other purposes, and none of the Company, the Security Registrar, the Paying Agent or the Trustee shall be affected by any notice to the contrary.  Furthermore, the Depositary shall, by acceptance of a Global Security, agree that transfers of beneficial interests in such Global Security may be effected only through a book-entry system maintained by the Depositary (or its agent) and that ownership of a beneficial interest in the Global Security shall be required to be reflected in a book-entry.  When Series E Bonds are presented to the Security Registrar with a request to register the transfer thereof or to exchange them for other authorized denominations of a Series E Bond in a principal amount equal to the aggregate principal amount of Series E Bonds surrendered for exchange, the Security Registrar shall register the transfer or make the exchange as requested if its requirements for such transactions are met.

 

To permit registrations of transfers and exchanges in accordance with the terms, conditions and restrictions hereof, the Company shall execute, and the Trustee shall authenticate, Series E Bonds at the Security Registrar’s request.  No service charge shall be made to a Holder for any registration of transfer or exchange of Series E Bonds, but the Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Series E Bonds.  All Series E Bonds surrendered for registration of transfer or exchange shall be cancelled by the Trustee in accordance with its then customary procedures.

 

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Section 208.                             Book-Entry Provisions for Restricted Global Securities and Regulation S Global Securities.

 

(a)                                 Members of, or participants in, DTC (“Agent Members”) shall have no rights under the Original Indenture, this Fifth Supplemental Indenture and the Series E Bonds with respect to any Global Security held on their behalf by DTC or its nominees, and DTC or its nominees may be treated by the Company, the Trustee and any agent of the Trustee as the absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or shall impair, as between DTC and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Global Security.  Upon the issuance of any Global Security, the Security Registrar or its duly appointed agent shall record DTC or its nominees as the registered holder of such Global Security.

 

(b)                                 Transfers of any Global Security shall be limited to transfers of such Restricted Global Security or Regulation S Global Security in whole, but not in part, to the Depositary.  Each Global Security shall bear the following legend:

 

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

 

Beneficial interests in the Restricted Global Security and any Regulation S Global Security may be transferred in accordance with the rules and procedures of DTC and the provisions of Section 209.

 

(c)                                  Beneficial interests in a Restricted Global Security or a Regulation S Global Security shall be delivered to all beneficial owners thereof in the form of Rule 144A Definitive Securities (“Rule 144A Definitive Securities”) or Regulation S Definitive Securities

 

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(“Regulation S Definitive Securities”), as the case may be, if (i) DTC notifies the Trustee that it is unwilling or unable to continue as Depositary for such Restricted Global Security or Regulation S Global Security, as the case may be, and a successor depositary is not appointed by the Trustee within 90 days of such notice, and (ii) after the occurrence and during the continuance of an Event of Default, owners of beneficial interests in a Global Security with a principal amount aggregating not less than a majority of the outstanding principal amount of the Global Security advise the Trustee, the Company and DTC through Agent Members in writing that the continuation of a book-entry system through DTC or its successor is no longer in their best interests.

 

(d)                                 Any beneficial interest in one of the Global Securities that is transferred to a Person who takes delivery in the form of an interest in another Global Security will, upon such transfer, cease to be an interest in such Global Security and become an interest in the other Global Security and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to beneficial interests in such other Global Security for as long as it remains such an interest.

 

(e)                                  In connection with the transfer of an entire Restricted Global Security or an entire Regulation S Global Security to the beneficial owners thereof pursuant to paragraph (c) of this Section 208, such Restricted Global Security or Regulation S Global Security, as the case may be, shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate, to each beneficial owner identified by DTC in exchange for its beneficial interest in such Restricted Global Security or Regulation S Global Security, as the case may be, an equal aggregate principal amount of Rule 144A Definitive Securities or Regulation S Definitive Securities, as the case may be, of authorized denominations.  None of the Company, the Security Registrar, the Paying Agent or the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such registration instructions.  Upon the issuance of Rule 144A Definitive Securities or Regulation S Definitive Securities, as the case may be, the Company and the Trustee shall recognize the Person in whose name the Rule 144A Definitive Securities or Regulation S Definitive Securities, as the case may be, are registered in the Security Register as Holders hereunder.

 

(f)                                   Any Rule 144A Definitive Securities or Regulation S Definitive Securities, as the case may be, delivered in exchange for an interest in the Restricted Global Security pursuant to paragraph (c) of this Section 208 shall, except as otherwise provided by paragraph (d) of Section 209, bear the Restricted Legend.

 

(g)                                  Prior to the expiration of the Distribution Compliance Period, any Regulation S Definitive Security delivered in exchange for an interest in a Regulation S Global Security pursuant to Section 206 and paragraph (c) of this Section 208 shall bear the Restricted Legend.

 

(h)                                 The registered holder of any Restricted Global Security or Regulation S Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under the Original Indenture or this Fifth Supplemental Indenture or the Series E Bonds.

 

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(i)                                     Neither the Company nor the Trustee shall be liable if the Trustee or the Company is unable to locate a qualified successor clearing agency.

 

Section 209.                             Special Transfer Provisions.  The following provisions shall also apply to the Series E Bonds:

 

(a)                                 Transfers to QIBs.  The following provisions shall apply with respect to the registration of any proposed transfer of a Series E Bond required to bear the Restricted Legend to a QIB (excluding Non-U.S. Persons):

 

(i)                                     The Security Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Series E Bond stating, or has otherwise advised the Company, the Trustee and the Security Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Series E Bond stating, or has otherwise advised the Company, the Trustee and the Security Registrar in writing, that it is purchasing the Series E Bond for its own account or an account with respect to which it exercises sole investment discretion and that it, or the Person on whose behalf it is acting with respect to any such account, is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

(ii)                                  Upon receipt by the Security Registrar of the documents required by clause (i) above and instructions given in accordance with DTC’s and the Security Registrar’s procedures therefor, the Security Registrar shall reflect on its books and records the date of such transfer and an increase in the principal amount of a Restricted Global Security in an amount equal to the principal amount of the interests in such Regulation S Global Security being transferred, and the Trustee shall decrease the amount of such Regulation S Global Security so transferred.

 

(b)                                 Transfers of Interests in the Temporary Regulation S Global Security, the Permanent Regulation S Global Security or the Regulation S Definitive Securities.

 

(i)                                     After the expiration of the Distribution Compliance Period, the Security Registrar shall register any transfer of interests in any Regulation S Global Security or Regulation S Definitive Security without requiring any additional certification.

 

(ii)                                  Until the expiration of the Distribution Compliance Period, interests in the Temporary Regulation S Global Security may only be sold, pledged or transferred through Euroclear Bank S.A./N.V. (“Euroclear”) or Clearstream Banking, Société Anonyme (“Clearstream”) (as indirect participants in the Depositary) or Agent Members acting for and on behalf of Euroclear and Clearstream only (x) for interests in a Permanent Regulation S Global Security and then only upon certification in form reasonably satisfactory to the Trustee that interests in such Temporary Regulation S

 

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Global Security are owned by either Non-U.S. Persons or U.S. Persons who purchased such interests in a transaction that did not require registration under the Securities Act or (y) for interests in the Restricted Global Security if the transferor first delivers to the Trustee a written transfer notice to the effect that the Series E Bonds are being transferred to a person (A) who the transferor reasonably believes to be a QIB; (B) purchasing for its own account or the account of a QIB in a transaction meeting the requirements of Rule 144A; and (C) in accordance with all applicable securities laws of the states of the United States and any other applicable jurisdiction.

 

(c)                                  Transfers to Non-U.S. Persons at Any Time.  The following provisions shall apply with respect to any registration of any transfer of a Series E Bond to a Non-U.S. Person:

 

(i)                                     Prior to the expiration of the Distribution Compliance Period, the Security Registrar shall register any proposed transfer of a Series E Bond to a Non-U.S. Person upon receipt of a certificate substantially in the form set forth as Exhibit C hereto from the proposed transferor.

 

(ii)                                  After the expiration of the Distribution Compliance Period, the Security Registrar shall register any proposed transfer to any Non-U.S. Person upon receipt of a certificate substantially in the form of Exhibit C from the proposed transferor.  The Security Registrar shall promptly send a copy of such certificate to the Company.

 

(iii)                               Upon receipt by the Security Registrar of (x) the documents, if any, required by clause (ii) and (y) instructions in accordance with DTC’s and the Security Registrar’s procedures, the Security Registrar shall reflect on its books and records the date of such transfer and a decrease in the principal amount of such Restricted Global Security in an amount equal to the principal amount of the beneficial interest in such Restricted Global Security to be transferred, and, upon receipt by the Security Registrar of instructions given in accordance with DTC’s and the Security Registrar’s procedures, the Security Registrar shall reflect on its books and records the date and an increase in the principal amount of the Regulation S Global Security in an amount equal to the principal amount of the Restricted Global Security to be transferred, and the Trustee shall decrease the amount of such Restricted Global Security.

 

(d)                                 Restricted Legend.  Upon the transfer, exchange or replacement of Series E Bonds not bearing the Restricted Legend, the Security Registrar shall deliver Series E Bonds that do not bear the Restricted Legend.  Upon the transfer, exchange or replacement of Series E Bonds bearing the Restricted Legend, the Security Registrar shall deliver only Series E Bonds that bear the Restricted Legend unless there is delivered to the Security Registrar an opinion of counsel to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act.

 

(e)                                  General.  By acceptance of any Series E Bond bearing the Restricted Legend, each Holder of such Series E Bond acknowledges the restrictions on transfer of such Series E Bond set forth in such Restricted Legend and otherwise in this Fifth Supplemental Indenture and agrees that it will transfer such Series E Bond only as provided in such Restricted Legend and otherwise in this Fifth Supplemental Indenture.  In connection with any transfer of Series E

 

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Bonds, each Holder agrees by its acceptance of the Series E Bonds to furnish the Security Registrar or the Trustee such certifications, legal opinions or other information as either of them may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act and in accordance with the terms and provisions of this Article Two; provided that the Security Registrar shall not be required to determine the sufficiency of any such certifications, legal opinions or other information.

 

Until such time as no Series E Bonds remain Outstanding, the Security Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 208 or this Section 209.  The Trustee, if not the Security Registrar at such time, shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Security Registrar.

 

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Fifth Supplemental Indenture or under applicable law with respect to any transfer of any interest in any Series E Bonds (including any transfers between or among Agent Members or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when required by the terms of, this Fifth Supplemental Indenture, and to examine the same to determine substantial compliance as to form with the requirements hereof.

 

In the event that any Global Security or any portion thereof is exchanged for Definitive Securities, such other Definitive Securities may be exchanged (by transfer or otherwise) for Definitive Securities or for beneficial interests in a Global Security (if any is then outstanding) only in accordance with procedures substantially consistent with this Article Two (including any certification requirements) and applicable procedures adopted by the Company and the Trustee.

 

Until definitive Series E Bonds are ready for delivery, the Company may use temporary Series E Bonds.  Temporary Series E Bonds shall be substantially in the form of definitive Series E Bonds but may have variations that the Company considers appropriate for temporary Series E Bonds.  Without unreasonable delay, the Company shall deliver definitive Series E Bonds in exchange for temporary Series E Bonds.

 

The Company may issue some or all of the Securities in temporary or permanent global form.  The Company may issue a Global Security only to the Depositary.  The Depositary may transfer a Global Security only to its nominee or to a successor Depositary.  A Global Security shall represent the amount of Series E Bonds specified in the Global Security.  A Global Security may have variations that the Depositary requires or that the Company considers appropriate for such a security.

 

Beneficial owners of part or all of a Global Security are subject to the rules of the Depository as in effect from time to time.

 

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The Company, the Trustee and their agents shall not be responsible for any acts or omissions of a Depositary, for any Depositary records of beneficial ownership interests or for any transactions between or among the Depositary, Agent Members and beneficial owners.

 

The Company at any time may deliver Series E Bonds to the Trustee for cancellation.  The Paying Agent, if not the Trustee, shall forward to the Trustee any Series E Bonds surrendered to them for payment or conversion.  The Trustee shall cancel all Series E Bonds surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of cancelled Series E Bonds according to its then customary practices.  The Company may not issue new Series E Bonds to replace Series E Bonds that it has paid or which have been delivered to the Trustee for cancellation.

 

ARTICLE THREE

 

REDEMPTION

 

The Series E Bonds may be redeemed at the times and Redemption Prices specified in the following paragraph, in accordance with the procedures set forth in the Original Indenture, on not less than 30 nor more than 60 days’ notice prior to the Redemption Date to the Holders, given as provided in the Original Indenture.

 

Prior to February 15, 2043, the Series E Bonds may be redeemed in whole at any time or in part from time to time, at the option of the Company, at a Redemption Price equal to the greater of (i) 100% of the principal amount of the Series E Bonds being redeemed and (ii) as determined by an Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of (x) 15 basis points plus (y) the Adjusted Treasury Rate on the third business day prior to the Redemption Date, plus, in each case, accrued and unpaid interest thereon to, but excluding, the Redemption Date.  Commencing on February 15, 2043, the Series E Bonds may be redeemed in whole at any time or in part from time to time, at the Company’s option, at a Redemption Price equal to 100% of the principal amount of the Series E Bonds to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date.  In each of the foregoing cases, installments of interest on the Series E Bonds that are due and payable on an interest payment date falling on or prior to the relevant Redemption Date will be payable to the Holders of such Series E Bonds registered as such at the close of business on the relevant record date according to the terms and provisions of the Original Indenture.

 

In the event of a partial redemption of the Series E Bonds, the Company will issue new Series E Bonds for the unredeemed portion in the name of the Holder of the partially redeemed Series E Bonds.

 

If less than all of the Series E Bonds are to be redeemed, the Series E Bonds will be redeemed pro rata, by lot or by such other method of selection as the Trustee shall deem fair and appropriate (in accordance with DTC’s applicable procedures) and which may, in any case,

 

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provide for the selection for redemption of Series E Bonds and portions of Series E Bonds in amounts of $2,000 and integral multiples of $1,000 in excess thereof.

 

Unless the Company defaults in payment of the Redemption Price, the portion of Series E Bonds called for redemption will no longer accrue interest on and after the Redemption Date.

 

ARTICLE FOUR

 

MAINTENANCE AND RENEWAL

 

(a)                                 The Company covenants and agrees that, so long as any of the Series E Bonds are Outstanding, the Company will expend during each calendar year, and certify to the Trustee in an Officer’s Certificate, an amount not less than 2.0% of the average amount of depreciable property of the Company at the beginning and at the end of such calendar year for one or more of the following purposes:

 

(i)                                     capital expenditures for the maintenance and repair of the utility properties of the Company subject to the Lien of the Original Indenture;

 

(ii)                                  the construction or acquisition of Property Additions on which the Original Indenture is a first Lien, subject only to Permitted Liens and Prepaid Liens; or

 

(iii)                               the retirement, through purchase, payment or redemption, of Securities issued under and secured by the Indenture (including any future supplemental indenture pursuant to the Original Indenture).

 

(b)                                 The term “amount of depreciable property” shall mean as of any date the amount of Property Additions included at such date on the books of the Company which is depreciable, as determined in accordance with generally accepted accounting principles in the United States.  The average of the amount of depreciable property shall mean the arithmetical average of the amount of depreciable property at the beginning, and the amount thereof at the end, of such calendar year.  Partial years shall be prorated.

 

If, in any calendar year, the required expenditures for the foregoing purposes are not made, the Company shall deposit with the Trustee on or before the first day of February next succeeding the close of such calendar year a sum in cash to the extent of any deficiency, after deducting (subject to the terms of the Indenture) any eligible credit for unused excess expenditures previously made for such purposes.  Such cash may be applied to the redemption at the applicable Redemption Price, or to the repurchase, of Securities, or may be withdrawn to the extent of 100% of Property Additions.

 

(c)                                  Excess expenditures in any calendar year may be used to comply with the requirements of any subsequent year or years and Property Additions may be certified to comply with the provisions of clause (a)(ii) above; provided, that Property Additions so used, and Securities retired through expenditures so used, cannot be used for other purposes under this Fifth Supplemental Indenture; provided, further that, (i) no Retired Securities or expenditures for Funded Property which shall have been made the basis for authentication of Securities or the release of Mortgaged Property or the withdrawal of deposited cash or Securities or any other

 

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amounts under any other provision of the Indenture, or which shall have been made out of any insurance moneys or moneys received from the condemnation, sale or other disposition of any of the Company’s property subject to the Lien of the Indenture, or which shall have previously been used or applied or certified to the Trustee to comply with this Article Four or any other provision of the Indenture and (ii) no retirement of Securities which shall have been made with moneys applied to such purpose pursuant to any provision of this Article Four or of Section 4.04 or 8.06 of the Original Indenture, shall be certified or used or applied for the purpose of complying with this Article or withdrawing any moneys paid to the Trustee pursuant to this Article Four.  This Article Four shall not require the annual retirement by the Company of any specific amount of Outstanding Securities.

 

(d)                                 So long as any of the Series E Bonds are Outstanding, on or before the first day of February of each year beginning February 1, 2014, the Company shall deliver to the Trustee an Officer’s Certificate showing in reasonable detail:  (1) the Company’s expenditures pursuant to each of subclauses (a)(i), (a)(ii) and (a)(iii) above, or otherwise deposited with the Trustee pursuant to this Article Four; (2) any eligible credit for excess expenditures from prior periods and the extent to which the Company elects to have such excess applied to the period next preceding delivery of such Officer’s Certificate; and (3) the amount of cash the Company is depositing with the Trustee concurrently with the delivery of such Officer’s Certificate to comply with the requirements of this Article Four.  Such Officer’s Certificate shall also state that it complies with the requirements of this Article Four.

 

(e)                                  At the option of the Company, any moneys paid to and held by the Trustee under the provisions of subclause (b) of this Section shall, upon the written request of the Company pursuant to an Officer’s Certificate, (1) be applied by the Trustee to the purchase in the open market of Securities of any series, at not exceeding the then applicable Redemption Price, if any, at which Securities of said series may then be redeemed or (2) be paid to or upon the order of the Company to the extent of (i) the principal amount of Securities of said series purchased or paid by the Company and delivered to the Trustee, cancelled or for cancellation and (ii) the accrued interest and the premium, if any, theretofore paid to the Trustee, as hereinabove provided, on such principal amount of Securities.  The Company hereby covenants and agrees that it will pay to the Trustee from time to time in cash such additional sums, if any, as shall be paid or required to be paid by the Trustee as or for accrued interest and premium, if any, in respect of any Securities purchased or redeemed pursuant to the provisions of this Section.

 

(f)                                   Any and all Securities, the retirement (through payment or purchase) of which shall be certified to the Trustee in compliance with the provisions of this Article Four, shall be delivered to the Trustee at or before the time the same shall be so certified and shall thereupon be cancelled and destroyed by the Trustee, unless theretofore cancelled and destroyed.  All other Securities received by the Trustee pursuant to any provision of this Article Four shall thereupon be cancelled and destroyed by the Trustee.

 

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ARTICLE FIVE

 

REPORTS

 

In addition to the reports the Company must provide pursuant to the Original Indenture, the Company hereby covenants and agrees that:

 

(a)                                 whether or not required by the Commission, so long as any Series E Bonds are outstanding, the Company shall mail to the Trustee and the Holders, within the time periods specified in the Commission’s rules and regulations for the filing of Forms 10-Q and 10-K, as applicable, all quarterly and annual financial statements that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms as a non-accelerated filer, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s independent auditors;

 

(b)                                 whether or not required by the Commission, so long as any Series E Bonds are outstanding, the Company shall mail to the Trustee and the Holders, within five calendar days of the occurrence thereof, an Officers’ Certificate providing notice of any of the following events, including in reasonable detail a summary of such event or events and the Company’s plans in respect thereof, if any:

 

(1)                                 any change of control of the Company, including the name of the Person(s) acquiring control, the amount and source of the consideration used, the basis of the control, the date and description of the transaction resulting in the change of control, the percentage of beneficial ownership of voting securities of the Company owned by the Person gaining control, the identity of the Person from whom control was assumed and the effect of such change of control, if any, on any material agreements or arrangements of the Company;

 

(2)                                 any acquisition or disposition of any significant assets of the Company or any of its Subsidiaries, whether in one transaction or a series of related transactions;

 

(3)                                 any bankruptcy or receivership of the Company or any direct or indirect parent of the Company;

 

(4)                                 any change in the Company’s or any of its Significant Subsidiaries’ auditors;

 

(5)                                 any resignation of any director of the Company;

 

(6)                                 any change in the fiscal year of the Company; and

 

(7)                                 information with respect to the Company’s results of operations, financial condition or prospects which, in the reasonable judgment of the Company, would be material to a Holder;

 

provided, that at such time as the Company is required to file reports on Form 8-K, the Company shall mail to the Trustee and the Holders or post on its website, within the time periods specified

 

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in the Commission’s rules and regulations for the filing for Form 8-K, the information required in current reports on Form 8-K that are required to be filed with the Commission in lieu of the information preceding this proviso of this clause (b);

 

(c)                                  following the filing of any information with the Commission, the Company shall make such information available to prospective investors in any Series E Bonds upon their request; and

 

(d)                                 furnish to the Holders and to prospective investors in the Series E Bonds, upon the request of such Holders, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Series E Bonds are not freely transferable under the Securities Act.

 

At the request of the Company, the Trustee shall assist the Company in the mailing to Holders of any of the aforesaid information, reports and certificates pursuant to clauses (a), (b) and/or (c) above.  If the Trustee delivers the foregoing information to the Holders on behalf of the Company, the Company shall not be required to deliver such information.  Should the Company deliver to the Trustee any such information, reports or certificates or any annual reports, information, documents and other reports pursuant to Section 314(a) of the Trust Indenture Act (if this Fifth Supplemental Indenture shall become qualified and subject to the Trust Indenture Act), delivery of such information, reports and certificates, or such annual reports, information, documents and other reports to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute notice or constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

 

ARTICLE SIX

 

NET EARNINGS CERTIFICATE

 

Notwithstanding Section 1.04 or any other provision of the Original Indenture, the Net Earnings Certificate delivered in connection with the initial issuance of Series E Bonds on the Issue Date shall be made and signed by an Accountant if it is not signed by an independent public accountant.

 

ARTICLE SEVEN

 

LIEN

 

The Series E Bonds are entitled to the benefit of the Lien under the Indenture, including, without limitation, the Lien on the property referred to in Exhibit A to the Original Indenture, Exhibit D attached to the Third Supplemental Indenture, Exhibit D attached to the Fourth Supplemental Indenture and Exhibit D attached hereto.

 

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ARTICLE EIGHT

 

AMENDMENTS TO INDENTURE

 

Subject to Article Nine hereof:

 

(a) Clause (c) of the definition of “Permitted Liens” in Section 1.01 of the Original Indenture is hereby amended by replacing the phrase “Five Million Dollars ($5,000,000)” with the phrase “Fifty Million Dollars ($50,000,000)” and by replacing the phrase “three percentum (3%)” with the phrase “ten percentum (10%),” and clause (u) of the definition of “Permitted Liens” in Section 1.01 of the Original Indenture is hereby amended by replacing the phrase “twenty five million dollars ($25,000,000)” with the phrase “seventy five million dollars ($75,000,000).”

 

(b) The definition of “Person” in Section 1.01 of the Original Indenture is hereby amended by deleting such section in its entirety and substituting in lieu thereof the following:  “‘Person’ means any individual, corporation, partnership, limited liability partnership, association, company, joint stock company, joint venture, trust or unincorporated organization or any Governmental Authority.”

 

(c) Sections 1.03(b)(ii)(B) and 1.03(b)(ii)(C) of the Original Indenture are hereby amended by replacing the phrase “ten-sevenths (10/7)” with the phrase “three-halves (3/2).”

 

(d) Sections 4.02(a), 4.02(b)(ii)(L), 6.07(b)(iii), 6.07(c)(iii), 8.03(d), 8.03(f), 8.03(x), 8.03(y), 8.04(d), 8.05, 8.06(a) and 8.07 of the Original Indenture are hereby amended by replacing the phrase “seventy percentum (70%)” with the phrase “sixty six and two-thirds percentum (66 2/3%).”

 

(e) Section 9.04(d)(ii) of the Original Indenture is hereby amended by deleting such section in its entirety and substituting in lieu thereof the following:  “In the event of an election to have subsection (b) apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel, subject to customary assumptions and exceptions, stating that (1) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (2) since the date of this instrument, there has been a change in the applicable federal income tax law, in either case (1) or (2) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize income, gain or loss for federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.”

 

(f) Section 9.04(d)(i) of the Original Indenture is hereby amended by deleting such section in its entirety and substituting in lieu thereof the following:  “The Company shall irrevocably have deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities, (1) cash in an amount, or (2) 

 

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Eligible Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, cash in an amount, or (3) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee to pay and discharge, (i) the principal of and any premium and each installment of principal of and any premium and interest on the Outstanding Securities on the respective Stated Maturities or Redemption Date, and (ii) any mandatory sinking fund payments applicable to the Securities on the day on which such payments are due and payable in accordance with the terms of this Indenture and such Securities.”

 

(g) Section 9.04(d)(iii) of the Original Indenture is hereby amended by deleting such section in its entirety and substituting in lieu thereof the following:  “In the event of an election to have subsection (c) apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel, subject to customary assumptions and exceptions, to the effect that the Holders of such Securities will not recognize income, gain or loss for federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur.”

 

(h) Section 10.01(c) of the Original Indenture is hereby amended by deleting such section in its entirety and substituting in lieu thereof the following:  “failure to perform or breach of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty the default in the performance of which or breach of which is elsewhere in this Section specifically dealt with) for a period of 60 days (or 90 days in the case of the covenant described under Section 12.04) after there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least twenty-five percentum (25%) in principal amount of Securities then outstanding, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder, unless the Trustee, or the Trustee and the Holders of a principal amount of Securities not less than the principal amount of Securities the Holders of which gave such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, that the Trustee, or the Trustee and the Holders of such principal amount of Securities, as the case may be, shall be deemed to have agreed to an extension of such period if corrective action is initiated by the Company within such period and is being diligently pursued; or.”

 

(i) Section 13.01 of the Original Indenture is hereby amended by replacing the phrase “the Company shall not consolidate with or merge into any other corporation” with the phrase “the Company shall not consolidate with or merge into any other Person.”

 

(j) The first paragraph of Section 13.01(b) of the Original Indenture is hereby amended by deleting such paragraph in its entirety and substituting in lieu thereof the following:  “the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or other transfer, or which leases, the Mortgaged Property as or substantially as an entirety shall be a Person organized and existing under the laws of the United 

 

25

 

States, any State or Territory thereof or the District of Columbia (such Person being hereinafter sometimes called the “Successor Person”) and shall execute and deliver to the Trustee an indenture supplemental hereto, in form recordable and reasonably satisfactory to the Trustee, which:”

 

(k) Sections 1.01, 1.03, 13.01(b)(i), 13.01(b)(ii), 13.02 and 13.03 of the Original Indenture is hereby amended by replacing the term “successor corporation” or “Successor Corporation,” as the case may be, with the term “Successor Person.”

 

(l) Section 16.01 of the Original Indenture is hereby amended by deleting such section in its entirety and substituting in lieu thereof the following:  “No recourse shall be had for the payment of the principal of or premium, if any, or interest, if any, on any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof; or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under this Indenture, against any incorporator, organizer, member, manager, stockholder, officer, director or employee, as such, past, present or future, of the Company or of any predecessor or successor Person (either directly or through the Company or a predecessor or successor Person), whether by virtue of any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that this Indenture and all the Securities are solely obligations of the Company and that no personal liability whatsoever shall attach to, or be incurred by, any incorporator, organizer, member, manager, stockholder, officer, director or employee, past, present or future, of the Company or its direct or indirect owners or of any predecessor or successor Person, either directly or indirectly through the Company or its direct or indirect owners or any predecessor or successor Person, because of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or to be implied herefrom or therefrom; and such personal liability, if any, is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution and delivery of this Indenture, as originally executed and delivered, and the issuance of the Securities.”

 

ARTICLE NINE

 

EFFECTIVENESS OF PROVISIONS

 

The provisions of this Fifth Supplemental Indenture shall be effective from and after the date of execution hereof, except as otherwise expressly provided in this section; and the Original Indenture, as hereby amended, shall remain in full force and effect.

 

Article Eight of this Fifth Supplemental Indenture shall become and be effective (i) with respect to the Series E Bonds from and after the date of execution of this Fifth Supplemental Indenture; and (ii) with respect to any series of Securities not previously outstanding that are authenticated by the Trustee and issued by the Company under the Original Indenture (as hereby amended) subsequent to the date of execution of this Fifth Supplemental Indenture, upon such issuance but not unless and until (a) all Securities of any series created prior to the date of execution of this Fifth Supplemental Indenture shall have been cancelled (or surrendered for cancellation), paid, redeemed or otherwise discharged, at, before, or after maturity thereof, or (b) the consent of the requisite percentage of the Holders of Securities of all previously created 

 

26

 

series to the effectiveness of Article Eight shall have been obtained pursuant to Article XIV or Article XV of the Original Indenture.

 

Article Eight shall become effective with respect to any other outstanding Securities in the event the consent of the requisite percentage of the Holders of such Securities is obtained as provided in Article XIV or Article XV of the Original Indenture

 

ARTICLE TEN

 

MISCELLANEOUS PROVISIONS

 

The Trustee makes no undertaking or representations in respect of, and shall not be responsible in any manner whatsoever for and in respect of, the validity or sufficiency of this Fifth Supplemental Indenture, the Series E Bonds or the proper authorization or the due execution hereof by the Company or for or in respect of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company.  The Trustee shall not be accountable for the use or the application by the Company of the Series E Bonds or of the proceeds thereof.

 

Except as expressly amended and supplemented hereby, the Original Indenture shall continue in full force and effect in accordance with the provisions thereof and the Original Indenture is in all respects hereby ratified and confirmed.  This Fifth Supplemental Indenture and all of its provisions shall be deemed a part of the Original Indenture in the manner and to the extent herein and therein provided.

 

This Fifth Supplemental Indenture and the Series E Bonds shall be governed by and construed in accordance with the law of the State of New York, except that (i) if this Fifth Supplemental Indenture shall become qualified and shall become subject to the Trust Indenture Act, this Fifth Supplemental Indenture and the Series E Bonds shall be governed by the Trust Indenture Act to the extent that the Trust Indenture Act shall be applicable and (ii) if the law of any jurisdiction wherein any portion of the Mortgaged Property is located shall mandatorily govern the creation of a mortgage lien on and security interest in, or perfection, priority or enforcement of the Lien of the Indenture or exercise of remedies with respect to, such portion of the Mortgaged Property, this Fifth Supplemental Indenture and the Series E Bonds shall be governed by the law of such jurisdiction to the extent mandatory.

 

This Fifth Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

27

 

IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed as of the day and year first above written.

 

	
 
    	
INTERNATIONAL   TRANSMISSION
    
	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Rejji P. Hayes
    
	
 
    	
 
    	
Name:   Rejji P. Hayes
    
	
 
    	
 
    	
Title:   Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Teresa Petta
    
	
 
    	
 
    	
Name:   Teresa Petta
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

	
STATE   OF MICHIGAN
    	
)
    	
 
    
	
 
    	
)   ss.:
    	
 
    
	
COUNTY   OF OKLAND
    	
)
    	
 
    

 

On this 7th day of August 2013, before me personally appeared Rejji P. Hayes, to me known to be Treasurer of INTERNATIONAL TRANSMISSION COMPANY, one of the corporations that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said Corporation, for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said Corporation.

 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written.

 

 

	
/s/   Denise M. Juras
    	
 
    
	
Denise   Juras, Notary Public
    	
 
    
	
Oakland   County, Michigan
    	
 
    

 

My Commission expires:  October 29, 2014

 

Acting in the County of:  Oakland

 

 

	
STATE   OF CALIFORNIA
    	
)
    	
 
    
	
 
    	
)   ss.:
    	
 
    
	
COUNTY   OF LOS ANGELES
    	
)
    	
 
    

 

On the day of 7th day of August in the year 2013 before me, the undersigned, personally appeared Teresa Petta, Vice President of The Bank of New York Mellon Trust Company, N.A., personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual or the person upon behalf of which the individual acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

 

Witness my hand and official seal.

 

 

	
/s/   Jacqueline M. Nowal
    	
 
    
	
Print   Name: Jacqueline M. Nowal
    	
 
    

 

Notary Public in and for the State of Illinois
 Commission expires:  6/18/2015

 

 

EXHIBIT A

 

The recording information for the Original Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, each recorded in the Offices of the Register of Deeds in the Michigan Counties as indicated, is as follows:

 

	
County
    	
 
    	
Original Indenture
    	
 
    	
First Supp
    	
 
    	
Second Supp
    	
 
    	
Third Supp
    	
 
    	
Fourth Supp
    
	
Huron
    	
 
    	
L991;   P520
    	
 
    	
L992;   P26
    	
 
    	
L993;   P26
    	
 
    	
L1151;   P497
    	
 
    	
L1237;   P382
    
	
Lapeer
    	
 
    	
L1751;   P1
    	
 
    	
L1752;   P1
    	
 
    	
L1754;   P1
    	
 
    	
L2149;   P655
    	
 
    	
L2321;   P59161
    
	
Livingston
    	
 
    	
L4026;   P332
    	
 
    	
L4027;   P2
    	
 
    	
L4033;   P2
    	
 
    	
L5061;   P698
    	
 
    	
2008R-008653
    
	
Macomb
    	
 
    	
L13839;   P1
    	
 
    	
L13840;   P1
    	
 
    	
L13850;   P1
    	
 
    	
L17701;   P311
    	
 
    	
L19260;   P-58
   8041631
    
	
Monroe
    	
 
    	
L2520;   P681
    	
 
    	
L2521;   P1
    	
 
    	
L2524;   P529
    	
 
    	
L3081;   P27
    	
 
    	
2008R05323
    
	
Oakland
    	
 
    	
L30354;   P1
    	
 
    	
L30355;   P1
    	
 
    	
L30356;   P1
    	
 
    	
L37303;   P1
   Doc # 34749
    	
 
    	
L40148;   P164
    
	
Sanilac
    	
 
    	
L774;   P152
    	
 
    	
L775;   P424
    	
 
    	
L777;   P394
    	
 
    	
L939;   P876
    	
 
    	
L3828;   P114-216
    
	
St.   Clair
    	
 
    	
L2846;   P627
    	
 
    	
L2847;   P753
    	
 
    	
L2903;   P236
    	
 
    	
L3527;   P42
    	
 
    	
L1027;   P737
    
	
Tuscola
    	
 
    	
L942;   P378
    	
 
    	
L943;   P1
    	
 
    	
L944;   P124
    	
 
    	
L1075;   P261
   Doc #
   200600878885
    	
 
    	
L-1145;   P181-283
   Doc#
   200800906082
    
	
Washtenaw
    	
 
    	
L4284;   P485
    	
 
    	
L4284;   P486
    	
 
    	
L4285;   P136
    	
 
    	
L4547;   P123
    	
 
    	
L4674;   P536
    
	
Wayne
    	
 
    	
L38882;   P1
   L38882; P149
   L38882; P289
   L38882; P439
   L38882; P584
   L38882; P733
   L38882; P880
   L38882; P1028
   L38882; P1175
   L38877; P102
   L38877; P247
   L38877; P395
    	
 
    	
L38882;   P1324
   L38882; P1377
   L38882; P1433
   L38882; P1492
   L38882; P1549
   L38882; P1604
   L38882; P1661
   L38882; P1714
   L38882; P1771
   L38882; P1826
   L38882; P1882
   L38882; P1933
    	
 
    	
L38882;   P1991
   L38882; P2031
   L38882; P2066
   L38882; P2104
   L38882; P2145
   L38882; P2181
   L38882; P2220
   L38882; P2255
   L38882; P2294
   L38882; P2330
   L38882; P2368
   L38882; P2403
    	
 
    	
L44455;   P231
    	
 
    	
L47089;   P647-749
    

 

A-1

 

EXHIBIT B

 

[FORM OF FACE OF SERIES E BONDS]

 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]*

 

[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

 

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED IN THE NEXT PARAGRAPH), ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN 

 

*                                         To be included on the face of each Global Security.

 

B-1

 

OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO REQUESTS), (V) TO THE COMPANY, OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

THE “RESALE RESTRICTION TERMINATION DATE” WILL BE THE DATE (1) THAT IS AT LEAST ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF AND (2) ON WHICH THE COMPANY INSTRUCTS THE TRUSTEE THAT THIS LEGEND SHALL BE DEEMED REMOVED FROM THIS SECURITY, IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE RELATING TO THIS SECURITY.]**

 

[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]***

 

[EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY REPRESENTING AN INTEREST IN THE BONDS REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(B)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT.  DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.V. OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME AND ONLY (1) TO THE COMPANY, (2) WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE 

 

**                                  To be included on the face of each Restricted Global Security and Restricted Definitive Security.

 

***                           To be included on the face of each Restricted Definitive Security.

 

B-2

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (1) THROUGH (4) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS.  HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.

 

BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE EXCHANGED FOR INTERESTS IN A RESTRICTED GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH RULE 144A, AND (2) THE TRANSFEROR OF THE TEMPORARY REGULATION S GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

 

BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL SECURITY MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS PRIOR TO THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE INTEREST TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK S.A./N.V. OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME.]****

 

****                    To be included on the face of each Temporary Regulation S Global Security.

 

B-3

 

INTERNATIONAL TRANSMISSION COMPANY
 4.625% FIRST MORTGAGE BONDS, SERIES E, DUE AUGUST 15, 2043

 

	
 
    	
$                  
    
	
No.             
    	
CUSIP                  
    
	
 
    	
ISIN                  
    

 

INTERNATIONAL TRANSMISSION COMPANY, a corporation duly organized and existing under the laws of the State of Michigan (herein called the “Company,” which term includes any successor under the Indenture hereinafter referred to), for value received, hereby promises to pay to                                          or registered assigns, the principal sum of $                                 on August 15, 2043 and to pay interest thereon from August 14, 2013, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on February 15 and August 15 in each year, commencing February 15, 2014, at the rate per annum provided in the title hereof, until the principal hereof is paid or made available for payment, and, subject to the terms of the Indenture hereinafter referenced, at the rate of 4.625% per annum on any overdue principal and premium and (to the extent that the payment of such interest shall be legally enforceable) on any overdue installment of interest, from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Series E Bond is registered at the close of business on the Regular Record Date for such interest, which shall be February 1 or August 1 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may be paid to the Person in whose name this Series E Bond is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given as provided in the Indenture.  Interest will be computed on the basis of a 360-day year of 30-day months.

 

Payment of the principal of (and premium, if any) and interest on the Series E Bonds will be made at the office or agency of the Company maintained for that purpose in the City of New York, State of New York or at the office or place of business of the Trustee or its successor in trust under the Original Indenture hereinafter referenced, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts; [if this Security is not a Global Security, insert -- provided, however, that at the option of the Company payments of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register] [if this Security is a Global Security, insert—provided, however, that except with respect to payments of principal, payments shall be made by wire transfer of immediately available funds with respect to payments in respect of Global Securities if the Holders thereof have provided wire instructions in respect of such payments to the Company or the Paying Agent].  Holders must surrender Series E Bonds to a Paying Agent to collect principal payments.

 

B-4

 

Reference is hereby made to the further provisions of the Series E Bonds set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been manually executed by or on behalf of the Trustee under the Indenture (hereinafter referenced), this Series E Bond shall not be entitled to any benefits under the Indenture (hereinafter referenced), or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, INTERNATIONAL TRANSMISSION COMPANY has caused this Series E Bond to be duly executed.

 

 

	
Dated:
    	
INTERNATIONAL   TRANSMISSION
    
	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
BY
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

B-5

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Series E Bonds of the series designated therein referred to in the within-mentioned Indenture.

 

	
Date:
    	
THE   BANK OF NEW YORK MELLON TRUST
   COMPANY, N.A,
    
	
 
    	
as Trustee,
    
	
 
    	
 
    
	
 
    	
BY:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

B-6

 

[FORM OF REVERSE OF SERIES E BOND]

 

This 4.625% First Mortgage Bond, Series E, due August 15, 2043 is one of the duly authorized issue of bonds, notes or other evidences of indebtedness of the Company (herein sometimes referred to as the “Series E Bonds”), of the series hereinafter specified, all issued or to be issued under and pursuant to the Original Indenture dated as of July 15, 2003, as supplemented by the Fifth Supplemental Indenture, dated as of August 7, 2013 (as so supplemented, the “Indenture”), duly executed and delivered by the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and any other indentures supplemental thereto reference is hereby made for a statement of the respective rights, obligations, duties and immunities thereunder of the Trustee and any agent of the Trustee, any Paying Agent, the Company and the Holders of the Series E Bonds and of the terms upon which the Series E Bonds are issued and are to be authenticated and delivered.  This Security is one of the series designated on the face hereof, which series is initially limited in aggregate principal amount to $285,000,000; provided that the Company may from time to time or at any time, without the consent of the Holders of the Series E Bonds, issue additional Securities, including additional Series E Bonds, which additional Series E Bonds shall, if issued, increase the aggregate principal amount of, and shall be consolidated and form a single series with, the Series E Bonds issued on the Issue Date.  By the terms of the Indenture, additional Securities of other separate series, which may vary as to date, aggregate principal amount, Stated Maturity, interest rate or method of calculating the interest rate, redemption provisions and in other respects as therein provided, may be issued in an unlimited amount.

 

The Series E Bonds may be redeemed, in accordance with the procedures set forth in the Original Indenture, on not less than 30 nor more than 60 days’ notice prior to the Redemption Date to the Holders, given as provided in the Original Indenture.

 

Prior to February 15, 2043, the Series E Bonds may be redeemed in whole at any time or in part from time to time, at the option of the Company, at a Redemption Price equal to the greater of (i) 100% of the principal amount of the Series E Bonds being redeemed and (ii) as determined by an Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of (x) 15 basis points plus (y) the Adjusted Treasury Rate on the third business day prior to the Redemption Date, plus, in each case, accrued and unpaid interest thereon to, but excluding, the Redemption Date.  Commencing on February 15, 2043, the Series E Bonds may be redeemed in whole at any time or in part from time to time, at the Company’s option, at a Redemption Price equal to 100% of the principal amount of the Series E Bonds to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date.  In each of the foregoing cases, installments of interest on the Series E Bonds that are due and payable on an interest payment date falling on or prior to the relevant Redemption Date will be payable to the Holders of such Series E Bonds registered as such at the close of business on the relevant record date according to the terms and provisions of the Original Indenture.

 

B-7

 

The Series E Bonds are subject to the further redemption provisions and procedures set forth in the Indenture.

 

The Indenture contains provisions for defeasance of (a) the entire indebtedness of the Series E Bonds and (b) certain restrictive covenants upon compliance by the Company with certain conditions set forth in the Indenture.

 

If an Event of Default with respect to the Series E Bonds shall occur and be continuing, the unpaid principal of the Series E Bonds may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of all series to be affected (voting as a class).  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of the Securities of this series shall be conclusive and binding upon such Holder and upon all future Holders of the Securities of this series and of any Securities of this series issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon the Securities of this series.

 

No reference herein to the Indenture and no provision of the Series E Bonds or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest, if any, on the Series E Bonds at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of the Series E Bonds is registrable in the Security Register, upon surrender of the Series E Bonds for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any) and interest, if any, on the Series E Bonds are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Series E Bonds of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Series E Bonds are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, the Series E Bonds are exchangeable for a like aggregate principal amount of Series E Bonds of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

B-8

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of the Series E Bonds for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name the Series E Bonds are registered as the owner hereof for all purposes, whether or not the Series E Bonds be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Series E Bonds are not subject to any sinking fund.

 

The Series E Bonds are entitled to the benefit of the Lien under the Indenture.

 

Each Holder, by accepting a Series E Bond, agrees to be bound by all the terms and provisions of the Indenture, as the same may be amended from time to time in accordance with its terms.

 

This Series E Bond shall be governed by and construed in accordance with the law of the State of New York, except that (i) if the Fifth Supplemental Indenture governing this Series E Bond shall become qualified and shall become subject to the Trust Indenture Act, this Series E Bond shall be governed by the Trust Indenture Act to the extent that the Trust Indenture Act shall be applicable and (ii) if the law of any jurisdiction wherein any portion of the Mortgaged Property is located shall mandatorily govern the creation of a mortgage lien on and security interest in, or perfection, priority or enforcement of the Lien of the Indenture or exercise of remedies with respect to, such portion of the Mortgaged Property, the Series E Bond shall be governed by the law of such jurisdiction to the extent mandatory.

 

All capitalized terms used but not defined in this Series E Bond shall have the meanings assigned to them in the Indenture.

 

B-9

 

FORM OF TRANSFER NOTICE

 

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

 

	
Insert   Taxpayer Identification No.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    
	
please print or typewrite name and address   including zip code of assignee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    
	
the within Series E Bond and all rights   thereunder, hereby irrevocably constituting and appointing
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    
	
attorney to transfer said Series E Bond on   the books of the Security Registrar with full power of substitution in the   premises.
    

 

B-10

 

[THE FOLLOWING PROVISION TO BE INCLUDED
 ON ALL SERIES E BONDS,
 EXCEPT REGULATION S GLOBAL SECURITIES AND
 REGULATION S DEFINITIVE SECURITIES]

 

In connection with any transfer of this Certificate occurring prior to the date that is the earlier of the date of an effective Registration Statement or the date one year (or such shorter period of time as permitted by Rule 144 under the Securities Act or any successor provision thereunder) after the later of the original issuance of this Series E Bond or the last date on which this Series E Bond was held by International Transmission Company or any affiliate of International Transmission Company, the undersigned confirms that without utilizing any general solicitation or general advertising that:

 

[Check One]

 

[    ] (a) the Series E Bonds are being transferred to a person whom we reasonably believe is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) (a “QIB”) that purchases for its own account or for the account of one or more QIBs to whom notice has been given that the resale, pledge or transfer is being made in reliance on Rule 144A under the Securities Act;

 

or

 

[    ] (b) the Series E Bonds are being transferred other than in accordance with (a) above and documents are being furnished that comply with the conditions of transfer set forth in this Series E Bond and the Indenture.

 

If neither of the foregoing boxes is checked, the Security Registrar shall not be obligated to register this Series E Bond in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 209 of the Fifth Supplemental Indenture shall have been satisfied.

 

	
Date:   [                      ,       ]
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
[Name   of Transferor]
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
NOTE:  The signature must correspond with the name   as written upon the face of the within-mentioned instrument in every   particular, without alteration or any change whatsoever.
    
	
 
    	
 
    	
 
    	
 
    
	
Signature   Guarantee:
    	
 
    	
 
    	
 
    

 

SIGNATURE GUARANTEE

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security 

 

B-11

 

Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

B-12

 

EXHIBIT C

 

[Form of Regulation S Transfer Certificate]

 

[Date]

 

International Transmission Company (the “Company”)

39500 Orchard Hill Place

Novi, Michigan 48375

Attention:  General Counsel

 

The Bank of New York Mellon Trust Company, N.A. (the “Trustee”)

2 N. LaSalle Street, Suite 1020

Chicago, Illinois  60602

Attention:  Global Corporate Trust

 

Dear Ladies and Gentlemen:

 

In connection with our proposed transfer of $                     aggregate principal amount of 4.625% First Mortgage Bonds, Series E, due August 15, 2043 (the “Series E Bonds”) of the Company, we confirm that:

 

(i)            the offer of the Series E Bonds was not made to a person in the United States;

 

(ii)           either (i) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;

 

(iii)          no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(a) or Rule 904(a) of Regulation S, as applicable; and

 

(iv)          the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

 

In addition, if the sale is made during the Distribution Compliance Period and the provisions of Rule 903(b)(2) or Rule 904(b)(1) of Regulation S are applicable thereto, we confirm that such sale has been made in accordance with the applicable provisions of Rule 903(b)(2) or Rule 904(b)(1), as the case may be.

 

C-1

 

The Company and the Trustee are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.  Terms used in this certificate have the meanings set forth in Regulation S.

 

	
Very   truly yours,
    	
 
    
	
 
    	
 
    
	
[Name   of Transferor]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signature
    	
 
    

 

C-2

 

EXHIBIT D

 

DESCRIPTION OF PROPERTIES

 

The following properties of the Company, owned as of the date hereof, have been acquired by the Company subsequent to the date of the Fourth Supplemental Indenture:

 

D-1

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