CONTINGENT PAYMENT RIGHTS AGREEMENT
by and between
▇▇▇▇▇▇ INTERNATIONAL, INC.
and
FIRST TRUST NATIONAL ASSOCIATION
Dated as of [ ], 1998
2
TABLE OF CONTENTS
RECITALS OF THE COMPANY.................................................................................. 5
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions................................................................................ 5
Section 1.2 Compliance and Opinions.................................................................... 9
Section 1.3 Form of Documents Delivered to Trustee..................................................... 9
Section 1.4 Acts of Holders............................................................................ 10
Section 1.5 Notices, etc., to Trustee and Company...................................................... 10
Section 1.6 Notice to Holders; Waiver.................................................................. 11
Section 1.7 Conflict with Trust Indenture Act.......................................................... 11
Section 1.8 Effect of Headings and Table of Contents................................................... 11
Section 1.9 Successors and Assigns..................................................................... 11
Section 1.10 Benefits of Agreement...................................................................... 11
Section 1.11 Governing Law.............................................................................. 11
Section 1.12 Legal Holidays............................................................................. 11
Section 1.13 Separability Clause........................................................................ 12
Section 1.14 No Recourse Against Others................................................................. 12
Section 1.15 Counterparts............................................................................... 12
ARTICLE 2
SECURITY FORMS
Section 2.1 Forms Generally............................................................................ 12
ARTICLE 3
THE SECURITIES
Section 3.1 Title and Terms............................................................................ 12
Section 3.2 Registrable Form........................................................................... 13
Section 3.3 Execution, Authentication, Delivery and Dating............................................. 13
Section 3.4 Temporary Securities....................................................................... 14
Section 3.5 Registration, Registration of Transfer and Exchange........................................ 14
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities........................................... 15
Section 3.7 Presentation of CPR Certificate............................................................ 15
Section 3.8 Persons Deemed Owners...................................................................... 15
Section 3.9 Cancellation............................................................................... 15
ARTICLE 4
THE TRUSTEE
Section 4.1 Certain Duties and Responsibilities........................................................ 16
Section 4.2 Certain Rights of Trustee.................................................................. 16
Section 4.3 Not Responsible for Recitals or Issuance of Securities..................................... 17
Section 4.4 May Hold Securities........................................................................ 17
Section 4.5 Money Held in Trust........................................................................ 17
Section 4.6 Compensation and Reimbursement............................................................. 18
Section 4.7 Disqualification; Conflicting Interests.................................................... 18
Section 4.8 Corporate Trustee Required; Eligibility.................................................... 18
Section 4.9 Resignation and Removal; Appointment of Successor.......................................... 18
Section 4.10 Acceptance of Appointment of Successor..................................................... 20
Section 4.11 Merger, Conversion, Consolidation or Succession to Business................................ 20
Section 4.12 Preferential Collection of Claims Against Company.......................................... 20
3
ARTICLE 5
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 5.1 Company to Furnish Trustee Names and Addresses of Holders.................................. 21
Section 5.2 Preservation of Information; Communications to Holders..................................... 21
Section 5.3 Reports by Trustee......................................................................... 21
Section 5.4 Reports by Company......................................................................... 21
ARTICLE 6
AMENDMENTS
Section 6.1 Amendments Without Consent of Holders...................................................... 22
Section 6.2 Amendments with Consent of Holders......................................................... 23
Section 6.3 Execution of Amendments.................................................................... 23
Section 6.4 Effect of Amendments; Notice to Holders.................................................... 24
Section 6.5 Conformity with Trust Indenture Act........................................................ 24
Section 6.6 Reference in Securities to Amendments...................................................... 24
ARTICLE 7
COVENANTS
Section 7.1 Payment of Amounts, if any, to Holders..................................................... 24
Section 7.2 Maintenance of Office or Agency............................................................ 24
Section 7.3 Money for Security Payments to Be Held in Trust............................................ 25
Section 7.4 Certain Purchases and Sales................................................................ 25
Section 7.5 Reports.................................................................................... 25
Section 7.6 Audits..................................................................................... 26
Section 7.7 Non-Monetary Consideration for Licensed Products........................................... 26
Section 7.8 Foreign Exchange........................................................................... 26
Section 7.9 Notice of Default.......................................................................... 26
ARTICLE 8
REMEDIES OF THE TRUSTEE AND HOLDERS
ON EVENT OF DEFAULT
Section 8.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default...................... 27
Section 8.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt.............................. 28
Section 8.3 Application of Proceeds.................................................................... 29
Section 8.4 Suits for Enforcement...................................................................... 30
Section 8.5 Restoration of Rights on Abandonment of Proceedings........................................ 30
Section 8.6 Limitations on Suits by Holders............................................................ 31
Section 8.7 Unconditional Right of Holders to Institute Certain Suits.................................. 31
Section 8.8 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default................................................................. 31
Section 8.9 Control by Holders......................................................................... 31
Section 8.10 Waiver of Past Defaults................................................................... 32
Section 8.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances................................................................ 32
Section 8.12 Right of Court to Require Filing of Undertaking to Pay Costs............................... 32
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on Certain Terms............................................ 33
Section 9.2 Successor Person Substituted............................................................... 33
Section 9.3 Opinion of Counsel to Trustee.............................................................. 33
ARTICLE 10
REDEMPTION
Section 10.1 Right of Redemption........................................................................ 34
Section 10.2 Notices to Trustees........................................................................ 34
Section 10.3 Selection of CPR Certificates to Be Redeemed............................................... 34
Section 10.4 Notice of Redemption....................................................................... 34
Section 10.5 Effect of Notice of Redemption............................................................. 35
Section 10.6 Deposit of Redemption Price................................................................ 35
Section 10.7 CPR Certificates Redeemed in Part.......................................................... 35
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Annex A - Form of CPR Certificate
*Note: This table of contents shall not, for any purpose, be deemed to
be a part of this Agreement.
4
Reconciliation and tie between Trust Indenture Act of 1939 and Contingent
Payment Rights Agreement, dated as of [ ], 1998.
Trust Indenture Act Section
Agreement Section
Section 310 (a)(1)................................................................................. 4.9
(a)(2)................................................................................. 4.9
(a)(3).......................................................................... Not Applicable
(a)(4).......................................................................... Not Applicable
(b)............................................................................... 4.7, 4.9
Section 311 (a)............................................................................... 4.13(a)
(b)............................................................................... 4.13(b)
(b)(2)....................................................................... 5.3(a)(2), 5.3(b)
Section 312 (a)............................................................................... 5.1, 5.2(a)
(b)................................................................................ 5.2(b)
(c)................................................................................ 5.2(c)
Section 313 (a)................................................................................ 5.3(a)
(b)................................................................................ 5.3(b)
(c)............................................................................ 5.3(a), 5.3(b)
(d).................................................................................... 5.3(c)
Section 314 (a).................................................................................... 5.4
(b)............................................................................. Not Applicable
(c)(1)................................................................................. 1.2
(c)(2)................................................................................. 1.2
(c)(3).......................................................................... Not Applicable
(d)........................................................................ ..... Not Applicable
(e).................................................................................... 1.2
Section 315 (a).................................................................................... 4.1(a)
(b).............................................................................. 8.11, 5.3(a)(6)
(c)..................................................................................... 4.1(b)
(d).................................................................................... 4.1(c)
(d)(1)................................................................................. 4.1(a)(1)
(d)(2)................................................................................. 4.1(c)(2)
(d)(3)................................................................................. 4.1(c)(3)
(e)................................................................................ 8.1, 8.12
Section 316 (a).................................................................................... 1.1
(a)(1)(A).............................................................................. 8.9
(a)(1)(B).............................................................................. 8.10
(a)(2).......................................................................... Not Applicable
(b).................................................................................... 8.7
Section 317 (a)(1)................................................................................. 8.2
(a)(2)................................................................................. 8.2
(b).................................................................................... 7.3
Section 318 (a).................................................................................... 1.7
---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Agreement.
5
CONTINGENT PAYMENT RIGHTS AGREEMENT, dated as of [ ], 1998 (the
"Agreement"), by and between ▇▇▇▇▇▇ INTERNATIONAL INC., a Delaware corporation
(the "Company"), and FIRST TRUST NATIONAL ASSOCIATION, a national association,
as trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the creation of an issue of
contingent payment rights (the "Securities" or "CPRs"), of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Agreement;
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of
February 23, 1998 (the "Merger Agreement"), by and among the Company, RHB1
Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the
Company, and Somatogen, Inc., a Delaware corporation ("Somatogen"), the Company
agreed to issue, to the stockholders of Somatogen, the Securities; and
WHEREAS, all things necessary have been done to make the Securities,
when executed by the Company and authenticated and delivered hereunder, the
valid obligations of the Company and to make this Agreement a valid agreement of
the Company, all in accordance with their and its terms.
NOW, THEREFORE, for and in consideration of the premises and the
consummation of the transactions referred to above, it is covenanted and agreed,
for the equal and proportionate benefit of all Holders (as defined herein) of
the Securities, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all accounting terms used herein and not expressly defined herein
shall have the meanings assigned to such terms in accordance with generally
accepted accounting principles in the United States, and the term "generally
accepted accounting principles" or "GAAP" means such accounting principles as
are generally accepted as they may change from time to time;
(c) all other terms used herein which are defined in the Trust
Indenture Act (as defined herein), either directly or by reference therein, have
the respective meanings assigned to them therein; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
6
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this instrument as originally executed and as it may
from time to time be supplemented or amended pursuant to the applicable
provisions hereof.
"Authorized Newspaper" means The Wall Street Journal (Eastern Edition),
or if The Wall Street Journal (Eastern Edition) shall cease to be published, or,
if the publication or general circulation of The Wall Street Journal (Eastern
Edition) shall be suspended for whatever reason, such other English language
newspaper of general circulation in The City of New York, New York, as is
selected by the Company.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company, to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day (other than a Saturday or a Sunday) on
which banking institutions in The City of New York, New York or Chicago,
Illinois are not authorized or obligated by law or executive order to close and,
if the CPRs are listed on a national securities exchange, such exchange is open
for trading.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act (as defined herein), or if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person (as defined herein) named as the "Company"
in the first paragraph of this Agreement, until a successor Person shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter "Company" shall mean such successor Person. To the extent necessary
to comply with the requirements of the provisions of Trust Indenture Act
Sections 310 through 317, inclusive, as they are applicable to the Company, the
term "Company" shall include any other obligor with respect to the Securities
for the purposes of complying with such provisions.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by the chairman of the Board of Directors or
the president or any vice president, the controller or assistant controller and
the treasurer or assistant treasurer or the secretary or any assistant
secretary, and delivered to the Trustee.
"Contingent Payment" means, with respect to any Payment Measuring
Period, an amount equal to five percent of the Net Sales that are attributable
to the commercial sale of Products.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Agreement is located
at [insert address].
"CPR Certificate" means a certificate representing any of the CPRs.
"Default Interest Rate" means the 90-day London Interbank Offering
Rate, as published in The Wall Street Journal, as such rate may change from time
to time, plus 200 basis points.
7
"Default Payment Amount" means, with respect to each CPR, as of a
Default Payment Date (as defined herein), an amount, equal to the difference
between (i) $2.00 and (ii) the aggregate of all Contingent Payments paid or
provided for, in accordance with the terms hereof, from the Effective Date
through and including such Default Payment Date.
"Default Payment Date" means the date upon which the Securities become
due and payable pursuant to Section 8.1.
"Effective Date" means [ ], 1998.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Final Measuring Period" means the six months ending December 31, 2007.
"Final Payment Date" means March 15, 2008.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Net Sales" means the actual gross amount invoiced by the Company, its
Affiliates, licensees or distributors for the sale of Products to any third
parties during a Payment Measuring Period less: (a) direct transportation
charges, including insurance; (b) trade, quantity and other discounts and
rebates actually allowed and taken to the extent customary in the trade; and (c)
allowances or credits, including, but not limited to, allowances or credits to
customers on account of rejection or return of the Products; provided that (i) a
sale or transfer to an Affiliate of the Company for resale by such Affiliate
shall not be considered a sale for the purpose of this provision, but the resale
by such Affiliate shall be a sale for such purposes, and the term "sale" shall
include a transfer or other disposition to a customer; (ii) Net Sales shall not
include reserves for bad debts or allowances, credits or rebates not covered
above; and (iii) a sale of Products shall occur at the earlier of (a) the
transfer of title in such Products to a third party or (b) the shipment of such
Products from the manufacturing or warehouse facilities of the manufacturer of
such Products to a third party.
Net Sales shall not include license fees or other advance
payments received by the Company from a licensee or distributor of the Products
which is not derived from sales of Products, but shall include the Net Sales of
such licensee or distributor.
"Officers' Certificate," when used with respect to the Company means a
certificate signed by the chairman of the Board of Directors or the president or
any vice president, the controller or assistant controller and the treasurer or
assistant treasurer or the secretary or any assistant secretary of the Company
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Agreement, except: (a) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation; (b) from and after the
earliest of a Default Payment Date, a Redemption Date or the Final Payment Date,
Securities for the payment of which money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust, or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such Securities;
and (c) Securities in exchange for or in lieu of which other Securities have
been authenticated and delivered pursuant to this Agreement, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands the Securities are valid obligations of the Company; provided,
however, that in determining whether the Holders of the requisite Outstanding
Securities have given any request, demand, direction, consent or waiver
hereunder, Securities owned by the Company or any Affiliate of the Company,
whether held as treasury securities or otherwise, shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, direction, consent
or waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded.
8
"Paying Agent" means any Person authorized by the Company to pay the
amount determined pursuant to Section 3.1, if any, on any Securities on behalf
of the Company.
"Payment Date" means March 15, 1999 and each succeeding March 15 and
September 15, through and including the Final Payment Date.
"Payment Measuring Period" means (i) the period from the Effective Date
to December 31, 1998 and (ii) each six month period ended June 30 and December
31 thereafter, through and including the Final Measuring Period.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Products" shall mean all products in which the primary active
ingredient is human hemoglobin, or derivatives, mutants or modifications
thereof, which have been produced in culture of microbial cells (including yeast
cells) which have been modified using Somatogen Recombinant Hemoglobin
Technology (other than clinical indications for any such Products that are in
clinical trials as of the date of the Merger Agreement).
"Redemption Date" means the date specified in a notice of redemption
given by the Company pursuant to Section 10.1
"Redemption Price" means, with respect to each CVR, the difference
between (x) $2.00 and (y) the aggregate Contingent Payments made, or provided
for in accordance with the terms hereof, from the Effective Date through and
including the Redemption Date.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office and also means, with respect to
any particular corporate trust matter, any other officer of the Trustee to whom
such matter is referred because of his knowledge of and familiarity with the
particular subject.
"Somatogen Recombinant Hemoglobin Technology" shall mean all technology
owned by or licensed to Somatogen on or prior to the Effective Date, which
involves the use of recombinant DNA techniques.
"Subsidiary" means each Person more than 50% of the outstanding Voting
Securities of which is owned, directly or indirectly, by the Company and/or one
or more Subsidiaries.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Agreement, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Trustee" shall mean such successor Trustee.
"Vice President" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title of "vice president."
"Voting Securities" means securities having ordinary voting power to
elect a majority of the directors irrespective of whether or not stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency.
9
Section 1.2 Compliance and Opinions. Upon any application or request by
the Company to the Trustee to take any action under any provision of this
Agreement, the Company shall furnish to the Trustee an Officers' Certificate
stating that, in the opinion of the ▇▇▇▇▇▇, all conditions precedent, if any,
provided for in this Agreement relating to the proposed action have been
complied with and an Opinion of Counsel stating, subject to customary
exceptions, that in the opinion of such counsel all such conditions precedent,
if any, have been complied with, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include: (a) a
statement that each individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto; (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (c) a statement that, in the opinion of each such individual, he or she
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (d) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel. Any such certificate or Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the Company stating that
the information with respect to such factual matters is in the possession of the
Company.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company. Any certificate or opinion of any
independent firm of public accountants filed with the Trustee shall contain a
statement that such firm is independent.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
10
Section 1.4 Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Agreement to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and (subject to Section 4.1) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section. The
Company may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Agreement. If not set by the Company prior to the first
solicitation of a Holder of Securities made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for such action shall be the later of ten days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee pursuant to Section 5.1 of this Agreement prior to such solicitation. If
a record date is fixed, those Persons who were Holders of Securities at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to take such action by vote or consent or, except with respect to
clause (d) below, to revoke any vote or consent previously given, whether or not
such Persons continue to be Holders after such record date. No such vote or
consent shall be valid or effective for more than 120 days after such record
date.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register. Neither the Company nor the Trustee nor any Agent of the Company or
the Trustee shall be affected by any notice to the contrary.
(d) At any time prior to (but not after) the evidencing to the Trustee,
as provided in this Section 1.4, of the taking of any action by the Holders of
the Securities specified in this Agreement in connection with such action, any
Holder of a Security the serial number of which is shown by the evidence to be
included among the serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Section 1.4, revoke such
action so far as concerns such Security. Any request, demand, authorization,
direction, notice, consent, waiver or other action by the Holder of any Security
shall bind every future Holder of the same Security or the Holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, suffered or omitted to
be done by the Trustee, any Paying Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
Section 1.5 Notices, etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Agreement to be made upon, given or
furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed, in writing, to or
with the Trustee at [insert trustee's address]; or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, or at any other address previously
furnished in writing to the Trustee by the Company.
11
Section 1.6 Notice to Holders; Waiver. Where this Agreement provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Agreement, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.7 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Agreement by any of the provisions of the Trust Indenture
Act, such required provision shall control.
Section 1.8 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.9 Successors and Assigns. All covenants and agreements in
this Agreement by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 1.10 Benefits of Agreement. Nothing in this Agreement or in the
Securities, express or implied, shall give to any Person (other than the parties
hereto and their successors hereunder, any Paying Agent and the Holders) any
benefit or any legal or equitable right, remedy or claim under this Agreement or
under any covenant or provision herein contained, all such covenants and
provisions being for sole benefit of the parties hereto and their successors and
of the Holders.
Section 1.11 Governing Law. THIS AGREEMENT AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. THE
COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.
THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 1.12 Legal Holidays. In the event that a Payment Date, a
Redemption Date, the Final Payment Date or a Default Payment Date, as the case
may be, shall not be a Business Day, then (notwithstanding any provision of this
Agreement or the Securities to the contrary) payment on the Securities need not
be made on such date, but may be made, without the accrual of any interest
thereon, on the next succeeding Business Day with the same force and effect as
if made on a Payment Date, a Redemption Date, the Final Payment Date or a
Default Payment Date, as the case may be.
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Section 1.13 Separability Clause. In case any provision in this
Agreement or in the CPRs shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 1.14 No Recourse Against Others. A director, officer, employee
or stockholder, as such, of the Company or the Trustee shall not have any
liability for any obligations of the Company or the Trustee under the Securities
or the Agreement or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security each Holder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
Section 1.15 Counterparts. This Agreement shall be signed in any number
of counterparts with the same effect as if the signatures to each counterpart
were upon a single instrument, and all such counterparts together shall be
deemed an original of this Agreement.
ARTICLE 2
SECURITY FORMS
Section 2.1 Forms Generally. The Securities and the Trustee's
certificate of authentication shall be in substantially the forms set forth in
Annex A, attached hereto and incorporated herein by this reference, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Agreement and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may be
required by law or any rule or regulation pursuant thereto, all as may be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Security.
The definitive Securities shall be typewritten, printed, lithographed
or engraved on steel engraved borders or produced by any combination of these
methods or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
ARTICLE 3
THE SECURITIES
Section 3.1 Title and Terms. (a) The aggregate number of CPR
Certificates which may be authenticated and delivered under this Agreement is
limited to a number equal to [insert number of shares of Company Common Stock
outstanding on a fully diluted basis at the Effective Time], except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to Section 3.4, 3.5, 3.6
or 6.6.
(b) The Securities shall be known and designated as the "Contingent
Payment Rights" of the Company.
(c) The Company shall, on or prior to any Payment Date, pay, to each
Holder of a CPR on the April 1 or September 1 immediately prior to such Payment
Date, the Contingent Payment with respect to the Payment Measuring Period ended
immediately preceding such Payment Date, plus any amounts deferred pursuant to
Section 3.1(d).
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(1) If for any reason the Contingent Payment has not finally
been determined as of any Payment Date, then such Payment Date shall, upon
written notice to that effect from the Company to the Trustee, be automatically
extended until the date that is the seventh Business Day after the date upon
which the Contingent Payment has finally been determined.
(2) The Company shall deliver, on each Payment Date, an
Officers' Certificate, to the Trustee, setting forth the calculation of the
Contingent Payment, if any, payable on such Payment Date. The Trustee shall be
protected in relying upon such Officers' Certificate and shall be under no duty
to investigate the facts underlying such Officers' Certificate.
(d) In the event that the Contingent Payment (plus any amount deferred
pursuant to this Section 3.1(d) otherwise payable on any Payment Date) is less
than $0.05 per CPR, then such amount shall not be payable on such Payment Date
but shall be deferred (without any accrual of interest thereon) until the next
following Payment Date.
(e) In no event shall the aggregate of all Contingent Payments payable,
from the Effective Time to and including the Final Payment Date, with respect to
any CPR, exceed $2.00.
(f) The Holders of the CPR Certificates, by acceptance thereof, agree
that the Company has no obligation to initiate or continue research, development
or commercialization activities with respect to any Products or any of the
Somatogen Recombinant Technologies and, in its sole and subjective discretion,
the Company may abandon efforts to research, develop or commercialize such
technologies or Products. No joint venture, partnership or other fiduciary
relationship is created hereby or by the Securities.
(g) The Company shall not transfer, as an entirety (other than
transfers to Subsidiaries or Affiliates of the Company), ownership of the
Somatogen Recombinant Technology, unless the transferee agrees to be bound by
the Agreement to the same extent as the Company is then bound by this Agreement,
and the Company shall be released from any obligation hereunder to the extent
the transferee assumes the Company's obligations under this Agreement.
(h) Notwithstanding any provision of this Agreement or the CPR
Certificates to the contrary, other than in the case of interest on the Default
Payment Amount, no interest shall accrue on any amounts payable with respect to
the CPRs.
(i) In the event that all of the CPR Certificates not previously
cancelled shall have been called for redemption by the Company pursuant to
Article 10 hereof or shall have become due and payable pursuant to the terms
hereof, and the Company has paid or caused to be paid or deposited with the
Trustee all amounts payable to the Holders under this Agreement, then this
Agreement shall cease to be of further effect and shall be deemed satisfied and
discharged. Notwithstanding the satisfaction and discharge of this Agreement,
the obligations of the Company under Section 4.6(c) shall survive.
Section 3.2 Registrable Form. The Securities shall be issuable only
in registered form.
Section 3.3 Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its chairman of the
Board of Directors or its president or any vice president or its treasurer, but
need not be attested. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were, at the time of execution, the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Agreement, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee, in accordance
with such Company Order, shall authenticate and deliver such Securities as
provided in this Agreement and not otherwise.
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Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee, by manual or facsimile signature of an authorized
officer, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and that the Holder is entitled to the benefits of this
Agreement.
Section 3.4 Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order, the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, substantially of the tenor of
the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine with the concurrence of the
Trustee. Temporary Securities may contain such reference to any provisions of
this Agreement as may be appropriate. Every temporary Security shall be executed
by the Company and be authenticated by the Trustee upon the same conditions and
in substantially the same manner, and with like effect, as the definitive
Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 7.2,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like amount of definitive
Securities. Until so exchanged, the Temporary Securities shall in all respects
be entitled to the same benefits under this Agreement as definitive Securities.
Section 3.5 Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the office of the Trustee a register (the
register maintained in such office and in any other office or agency designated
pursuant to Section 7.2 being herein sometimes referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby initially appointed "Security Registrar" for
the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 7.2, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new CPR Certificates
representing the same aggregate number of CPRs represented by the CPR
Certificate so surrendered that are to be transferred and the Company shall
execute and the Trustee shall authenticate and deliver, in the name of the
transferor, one or more new CPR Certificates representing the aggregate number
of CPRs represented by such CPR Certificate that are not to be transferred.
At the option of the Holder, CPR Certificates may be exchanged for
other CPR Certificates that represent in the aggregate the same number of CPRs
as the CPR Certificates surrendered at such office or agency. Whenever any CPR
Certificates are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the CPR Certificates which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
rights, and entitled to the same benefits under this Agreement, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4 or 6.6 not involving any transfer.
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Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities. If (a)
any mutilated Security is surrendered to the Trustee, or (b) the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Security, and there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser, the Company shall execute and, upon
delivery of a Company Order, the Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such destroyed, lost
or stolen Security, a new CPR Certificate of like tenor and amount of CPRs,
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is to become due and payable within fifteen days, the Company in its
discretion may, instead of issuing a new CPR Certificate, pay to the Holder of
such Security on a Redemption Date, the Final Payment Date or a Default Payment
Date, as the case may be, all amounts due and payable with respect thereto.
Upon the issuance of any new Securities under this Section, the Company
shall pay any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Agreement equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 3.7 Presentation of CPR Certificate. Payment of any amounts
pursuant to the CPRs shall be made only upon presentation by the Holder thereof,
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York, and at any other office or agency
maintained by the Company for such purpose in such coin or currency of the
United States of America as at the time is legal tender for the payment of
public and private debts or in debt securities of the Company in accordance with
the provisions of Section 3.1(g). However, the Company may pay such amounts by
wire transfer or check payable in such money.
Section 3.8 Persons Deemed Owners. Prior to the time of due presentment
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payment on
such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Section 3.9 Cancellation. All Securities surrendered for payment,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Agreement. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
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ARTICLE 4
THE TRUSTEE
Section 4.1 Certain Duties and Responsibilities. (a) With respect to
the Holders of Securities issued, the Trustee, prior to the occurrence of an
Event of Default with respect to the Securities and after the curing or waiving
of all Events of Default which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Agreement and
no implied covenants shall be read into this Agreement against the Trustee. In
case an Event of Default with respect to the Securities has occurred (which has
not been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) In the absence of bad faith on its part, prior to the occurrence
of an Event of Default and after the curing or waiving of all such Events of
Default which may have occurred, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that (i) this Subsection (c) shall
not be construed to limit the effect of Subsections (a) and (b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; (iii) no provision of this
Agreement shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it; and (iv) the Trustee
shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the Holders pursuant to
Section 8.9 relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement.
(d) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 4.2 Certain Rights of Trustee. Subject to the provisions of
Section 4.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties and the Trustee need not investigate any fact or matter stated in the
document;
(b) any request or direction or order of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution and the Trustee shall not be liable for any action it takes or omits
to take in good faith reliance thereon;
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(c) whenever in the administration of this Agreement the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate and the Trustee shall not be liable for any
action it takes or omits to take in good faith reliance thereon or an Opinion of
Counsel;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement at the request or direction of
any of the Holders pursuant to this Agreement, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document, but the Trustee
in its discretion may make such further inquiry or investigation into such facts
or matters as it may see fit, and if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement.
Section 4.3 Not Responsible for Recitals or Issuance of Securities. The
Trustee shall not be accountable for the Company's use of the Securities or the
proceeds from the Securities. The recitals contained herein and in the
Securities, except the Trustee's certificates of authentication, shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Securities.
Section 4.4 May Hold Securities. The Trustee, any Paying Agent,
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities, and, subject to
Sections 4.7 and 4.12, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
Section 4.5 Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder.
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Section 4.6 Compensation and Reimbursement. The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to the Trustee's negligence or bad faith; and
(c) to indemnify the Trustee and each of its agents, officers,
directors and employees (each an "indemnitee") for, and to hold it harmless
against, any loss, liability or expense (including attorneys fees and expenses)
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligations of the
Company hereunder shall constitute additional indebtedness hereunder. To secure
the Company's payment obligations in this Section, the Trustee shall have a lien
prior to the Securities on all money or property held or collected by the
Trustee other than money or property held in trust to pay particular Securities.
The Company's payment obligations pursuant to this Section shall survive the
termination of this Agreement. When a Trustee incurs expenses after the
occurrence of an Event of Default specified in Section 8.1(c) or 8.1(d) with
respect to the Company, the expenses are intended to constitute expenses of
administration under bankruptcy laws.
Section 4.7 Disqualification; Conflicting Interests. If the Trustee has
or shall acquire any conflicting interest within the meaning of the Trust
Indenture Act, it shall, within ninety days after ascertaining that it has such
conflicting interest, either eliminate such conflicting interest or resign to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Agreement. The Company shall take prompt steps to
have a successor appointed in the manner provided in this Agreement.
Section 4.8 Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be a corporation that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $15 million. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of a
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
Section 4.9 Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 4.10.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
resign at any time by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within thirty days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by an act of the Holders of
a majority of the Outstanding Securities, delivered to the Trustee and to the
Company.
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(d) If at any time:
(1) the Trustee shall fail to comply with Section 4.7 after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 4.8
and shall fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) the Holder of any Security who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after any removal by Holders of a majority of the Outstanding
Securities, a successor Trustee shall be appointed by act of the Holders of a
majority of the Outstanding Securities delivered to the Company and the retiring
Trustee the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with Section 4.10, become the successor
Trustee and supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders of
the Securities and accepted appointment within sixty days after the retiring
Trustee tenders its resignation or is removed, the retiring Trustee may, or, the
Holder of any Security who has been a bona fide Holder for at least six months
may on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust office. If the Company fails to send such notice within ten days
after acceptance of appointment by a successor Trustee, it shall not be a
default hereunder but the successor Trustee shall cause the notice to be mailed
at the expense of the Company.
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Section 4.10 Acceptance of Appointment of Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, upon request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 4.11 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities;
and such certificate shall have the full force which it is anywhere in the
Securities or in this Agreement provided that the certificate of the Trustee
shall have; provided that the right to adopt the certificate of authentication
of any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
Section 4.12 Preferential Collection of Claims Against Company. If and
when the Trustee shall be or shall become a creditor of the Company (or any
other obligor upon the Securities) the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
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ARTICLE 5
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 5.1 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee (i)
semiannually a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of a recent date, and (ii) at such times
as the Trustee may request in writing, within thirty days after receipt by the
Company of any such request, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of a date not more than
fifteen days prior to the time such list is furnished; provided, however, that
if and so long as the Trustee shall be the Security Registrar, no such list need
be furnished.
Section 5.2 Preservation of Information; Communications to Holders. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list furnished
to the Trustee as provided in Section 5.1 and the names and addresses of Holders
received by the Trustee in its capacity as Security Registrar. The Trustee may
destroy any list furnished to it as provided in Section 5.1 upon receipt of a
new list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Agreement and the corresponding rights and
privileges of the Trustee shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be deemed to be in violation of law or held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
made pursuant to the Trust Indenture Act.
Section 5.3 Reports by Trustee. (a) Within sixty days after December 31
of each year commencing with the December 31 following the Effective Date, the
Trustee shall transmit to all Holders such reports concerning the Trustee and
its actions under this Agreement as may be required pursuant to the Trust
Indenture Act at the time and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to the Holders, be filed by the Trustee with each stock exchange, if any, upon
which the Securities are listed, with the Commission and also with the Company.
The Company will promptly notify the Trustee when the Securities are listed on
any stock exchange.
Section 5.4 Reports by Company. The Company shall: (a) file with the
Trustee, (i) within fifteen days after the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act (such required information,
documents and other reports, generally, the "Exchange Act Documents"); or, (ii)
if the Company is not required to file its Exchange Act Documents, quarterly and
annual financial information that would be required pursuant to Section 13 of
the Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations; and (b) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within thirty days after the filing
thereof with the Trustee, such summaries of any information documents and
reports required to be filed by the Company pursuant to subsection (a) of this
Section as may be required by rules and regulations prescribed from time to time
by the Commission.
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ARTICLE 6
AMENDMENTS
Section 6.1 Amendments Without Consent of Holders. Without the consent
of any Holders, the Company and the Trustee, at any time and from time to time,
may enter into one or more amendments hereto or to the Securities, for any of
the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities any property or assets; or
(b) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(c) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as its Board of Directors and the Trustee
shall consider to be for the protection of the Holders of Securities, and to
make the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies provided in
this Agreement as herein set forth; provided, that in respect of any such
additional covenant, restriction, condition or provision such amendment may
provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such an Event of Default or may limit
the remedies available to the Trustee upon such an Event of Default or may limit
the right of the Holders of a majority of the Securities to waive such an Event
of Default; or
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(d) to cure any ambiguity, or to correct or supplement any provision
herein or in the Securities which may be defective or inconsistent with any
other provision herein; provided, that such provisions shall not materially
reduce the benefits of this Agreement or the Securities to the Holders; or
(e) to make any other provisions with respect to matters or questions
arising under this Agreement; provided, that such provisions shall not adversely
affect the interests of the Holders; or
(f) to make any amendments or changes necessary to comply or maintain
compliance with the Trust Indenture Act.
Promptly following any amendment of this Agreement or the Securities in
accordance with this Section 6.1, the Trustee shall notify the Holders of the
Securities of such amendment; provided, that any failure so to notify the
Holders shall not affect the validity of such amendment.
Section 6.2 Amendments with Consent of Holders. With the consent of the
Holders of a majority of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company (when authorized by a
Board Resolution) and the Trustee may enter into one or more amendments hereto
or to the Securities for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or to the
Securities or of modifying in any manner the rights of the Holders under this
Agreement or to the Securities; provided, however, that no such amendment shall,
without the consent of the Holder of each Outstanding Security affected thereby:
(a) modify the definition of Redemption Date, Final Payment Date,
Default Payment Date, Default Payment Amount, Net Sales, Products, Somatogen
Recombinant Hemoglobin Technology or Default Payment Interest Rate, modify
Section 3.1(i) or otherwise extend the maturity of the Securities or reduce the
amounts payable in respect of the Securities or modify any other payment term or
payment date.
(b) reduce the number of CPRs, the consent of whose Holders is
required for any such amendment; or
(c) modify any of the provisions of this Section or Section 8.10,
except to increase any such percentage or to provide that certain other
provisions of this Agreement cannot be modified or waived without the consent of
the Holder of each Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 6.3 Execution of Amendments. In executing any amendment
permitted by this Article, the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it, and (subject to Section 4.1) shall be fully
protected in relying upon an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement. The Trustee shall
execute any amendment authorized pursuant to this Article VI if the amendment
does not adversely affect the Trustee's own rights, duties or immunities under
this Agreement or otherwise. Otherwise, the Trustee may, but need not, execute
such amendment.
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Section 6.4 Effect of Amendments; Notice to Holders. Upon the execution
of any amendment under this Article, this Agreement and the Securities shall be
modified in accordance therewith, and such amendment shall form a part of this
Agreement and the Securities for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
Promptly after the execution by the Company and the Trustee of any
amendment pursuant to the provisions of this Article, the Company shall mail a
notice thereof by first class mail to the Holders of Securities at their
addresses as they shall appear on the Security Register, setting forth in
general terms the substance of such amendment. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amendment.
Section 6.5 Conformity with Trust Indenture Act. Every amendment
executed pursuant to this Article shall conform to the requirements of the Trust
Indenture Act.
Section 6.6 Reference in Securities to Amendments. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. Securities authenticated and delivered
after the execution of any amendment pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such amendment. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such amendment may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities. Failure to make the appropriate notation or to issue a
new Security shall not affect the validity of such amendment.
ARTICLE 7
COVENANTS
Section 7.1 Payment of Amounts, if any, to Holders. The Company will
duly and punctually pay the amounts, if any, on the Securities in accordance
with the terms of the Securities and this Agreement. Such amounts shall be
considered paid on the date due if on such date the Trustee or the Paying Agent
holds in accordance with this Agreement money sufficient to pay all such amounts
then due. Notwithstanding any other provision of this Agreement, the Trustee and
the Paying Agent shall comply with all U.S. federal withholding requirements
with respect to payments to Holders that the Company, the Trustee or the Paying
Agent reasonably believes are applicable under the Internal Revenue Code of
1986, as amended, and the Treasury regulations thereunder. Amounts withheld in
compliance with such withholding requirements shall, for purposes of this
Agreement, be treated as paid to the Holder such withholding was made with
respect to. The consent of Holder shall not be required for any such
withholding.
Section 7.2 Maintenance of Office or Agency. As long as any of the
Securities remain Outstanding, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency (i) where Securities may be
presented or surrendered for payment, (ii) where Securities may be surrendered
for registration of transfer or exchange and (iii) where notices and demands to
or upon the Company in respect of the Securities and this Agreement may be
served. The office of the Trustee at [insert trustees' New York address] shall
be such office or agency of the Company, unless the Company shall designate and
maintain some other office or agency for one or more of such purposes. The
Company or any of its Subsidiaries may act as Paying Agent, registrar or
transfer agent; provided that such Person shall take appropriate actions to
avoid the commingling of funds. The Company will give prompt written notice to
the Trustee of any change in the location of any such office or agency. If at
any time the Company shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
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The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the Borough of Manhattan, The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such office or
agency.
Section 7.3 Money for Security Payments to Be Held in Trust. If the
Company or any of its Subsidiaries shall at any time act as the Paying Agent, it
will, on or before a Redemption Date, the Final Payment Date or the Default
Payment Date, as the case may be, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the amounts, if any, so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will, on or before the Final Payment Date, a Redemption Payment
Date or the Default Payment Date, as the case may be, deposit with a Paying
Agent a sum in same day funds sufficient to pay the amount, if any, so becoming
due; such sum to be held in trust for the benefit of the Persons entitled to
such amount, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
(A) such Paying Agent will hold all sums held by it for the payment of any
amount payable on Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and will notify the Trustee of the sums so held and (B) that
it will give the Trustee notice of any failure by the Company (or by any other
obligor on the Securities) to make any payment on the Securities when the same
shall be due and payable.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment on any Security and remaining unclaimed
for one year after the Final Payment Date, a Redemption Payment Date or the
Default Payment Date, as the case may be, shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money shall thereupon
cease.
Section 7.4 Certain Purchases and Sales. Nothing contained herein shall
prohibit the Company or any of its Subsidiaries or Affiliates from acquiring in
open market transactions, private transactions or otherwise, the Securities.
Section 7.5 Reports. Within sixty days after the end of each Payment
Measuring Period, the Company shall furnish to the Trustee a written report
showing (i) the gross sales of all Products sold by the Company, its Affiliates,
licensees and distributors during the immediately preceding Payment Measuring
Period; and (ii) the reconciliation of gross sales to Net Sales. Payments shown
to have accrued by each report shall be due and payable, subject to Section
3.1(d), to the Holders on the next succeeding Payment Date.
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If any adjustments or inaccuracies in the amounts paid or payable under
this Section 7.5 are determined by the Trustee in its review of the calculation
of the Contingent Payment, which may be performed at the end of any Payment
Measuring Period, and the Company agrees to such adjustment, such adjustments
for the immediately preceding Payment Measuring Period may be reconciled and
described in the next due written report and the payment then due shall be
adjusted to reflect such determination. The Company shall keep complete and
accurate records in sufficient detail to enable the amounts payable hereunder to
be determined by the Trustee, the Holders and their consultants or professional
advisors.
Section 7.6 Audits. (a) Upon the written request of either (i) the
Trustee; or (ii) Holders representing at least thirty percent of the outstanding
Securities (a "Requesting Party") and not more than once in each calendar year,
and upon reasonable notice, the Company shall permit an independent certified
public accounting firm of nationally recognized standing selected by the
Requesting Party and reasonably acceptable to the Company, at the Requesting
Party's expense, to have access during normal business hours to such of the
records of the Company as may be reasonably necessary to verify the accuracy of
the payment reports. No such request shall be made more than three years
subsequent to the Payment Measuring Period that is the subject of such audit
request. The accounting firm shall disclose to the Requesting Party any matters
directly related to their findings, to the extent necessary to verify the
accuracy or completeness of the information provided by the Company to the
Requesting Party. This covenant shall survive the termination of this Agreement
for a period of thirty six months.
(b) If such accounting firm concludes and, the Company agrees with such
conclusion, that additional payments were owed during such period, the Company
shall pay the additional payments within thirty Business Days of the date the
Requesting Party delivers to the Company such accounting firm's written report;
provided that, if the Company disagrees with such conclusion the dispute shall
be submitted to arbitration for settlement. The fees charged by such accounting
firm shall be paid by the Requesting Party, unless the amount of additional
payments due exceeds the amount paid for any such period by ten percent, in
which case the Company shall reimburse the Requesting Party for the fees charged
by such accounting firm.
(c) Upon the expiration of thirty six months following the end of any
Payment Measuring Period, the calculation of payments payable with respect to
such Payment Measuring Period shall be binding and conclusive upon each party,
and the Company shall be released from any liability or accountability with
respect to payments for such Payment Measuring Period.
(d) Each person seeking to receive information from the Company in
connection with an audit shall enter into, and shall cause its accounting firm
to enter into, a reasonable and mutually satisfactory confidentiality agreement
with the Company obligating such party to retain all such financial information
disclosed to such party in confidence pursuant to such confidentiality
agreement.
(e) The Company shall not enter into any license or distribution
arrangement with respect to the Somatogen Recombinant Hemoglobin Technology
unless such agreement contains audit provisions at least as favorable, in the
aggregate, as this Section 7.6.
Section 7.7 Non-Monetary Consideration for Licensed Products. In the
event that the Company shall sell any Product to customers for any consideration
other than cash, such sale shall be deemed to have been made at a price equal to
the average selling price (determined in accordance with industry practice).
Section 7.8 Foreign Exchange. For the purpose of computing the Net
Sales of Products sold in a currency other than United States Dollars, such
currency shall be converted into United States Dollars using the average of the
rates of exchange published in The Wall Street Journal during the five business
days preceding the close of the Payment Measuring Period.
Section 7.9 Notice of Default. The Company shall file with the Trustee
written notice of the occurrence of any Event of Default or other default under
this Agreement within five business days of its becoming aware of any such
Default or Event of Default.
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ARTICLE 8
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT
Section 8.1 Event of Default Defined; Acceleration of Maturity; Waiver
of Default. "Event of Default" with respect to the Securities, means each one of
the following events which shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of all or any part of the amounts payable in
respect of any of the Securities as and when the same shall become due and
payable either at a Payment Date, a Redemption Date, the Final Payment Date or
otherwise; or
(b) default in the performance, or breach, of any covenant or warranty
of the Company in respect of the Securities (other than a covenant or warranty
in respect of the Securities, a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of such
default or breach for a period of ninety days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least fifty percent of the Outstanding
Securities, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(c) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Company or for any substantial part of
its property or ordering the winding up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of sixty
consecutive days; or
(d) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar official)
of the Company or for any substantial part of its property, or make any general
assignment for the benefit of creditors.
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If an Event of Default described above occurs and is continuing, then,
and in each and every such case, unless all of the Securities shall have already
become due and payable, either the Trustee or the Trustee upon the written
request of Holders of not less than fifty percent of the Securities then
Outstanding hereunder by notice in writing to the Company (and to the Trustee if
given by the Holders), shall bring suit for any amounts then due and payable,
which amounts shall bear interest at the Default Interest Rate until payment is
made to the Trustee.
The foregoing provisions, however, are subject to the condition that
if, at any time after the Trustee shall have begun such suit, and before any
judgment or decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided, the Company shall pay or shall deposit with the
Trustee a sum sufficient to pay all amounts which shall have become due (with
interest upon such overdue amount at the Default Interest Rate to the date of
such payment or deposit) and such amount as shall be sufficient to cover
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other expenses and liabilities incurred and all advances made, by the
Trustee, and if any and all Events of Default under this Agreement, other than
the non-payment of the amounts which shall have become due by acceleration,
shall have been cured, waived or otherwise remedied as provided herein, then and
in every such case the Holders of a majority of all the Securities then
Outstanding, by written notice to the Company and to the Trustee, may waive all
defaults with respect to the Securities, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall impair
any right consequent thereof.
Section 8.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Company covenants that in case default shall be made in the payment of
all or any part of the Securities when the same shall have become due and
payable, whether at a Redemption Date, the Final Payment Date, a Default Payment
Date or upon acceleration or otherwise, then upon demand of the Trustee, the
Company will pay to the Trustee for the benefit of the Holders of the Securities
the whole amount that then shall have become due and payable on all Securities
(with interest from the date due and payable to the date of such payment upon
the overdue amount at the Default Interest Rate); and in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and any
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee, except as a result of its negligence or bad faith.
The Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Agreement or in aid of the exercise of any power granted herein, or to enforce
any other remedy.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon such
Securities and collect in the manner provided by law out of the property of the
Company or other obligor upon such Securities, wherever situated, the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Company or
an other obligor upon the Securities under Title 11 of the United States Code or
any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or its property or such other obligor, or in
case of any other comparable judicial proceedings relative to the Company or
other obligor upon the Securities, or to the creditors or property of the
Company or such other obligor the Trustee, irrespective of whether the principal
of any Securities shall then be due and payable as herein expressed or otherwise
and irrespective of whether the Trustee shall have made any demand pursuant to
the provisions of this Section, shall be entitled and empowered, (but shall have
no obligation) by intervention in such proceedings or otherwise:
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(a) to file and prove a claim or claims for the whole amount owing and
unpaid in respect of the Securities, and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Holders allowed in any judicial proceedings relative to
the Company or other obligor upon the Securities, or to their respective
property;
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable proceedings;
and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Trustee on their behalf; and any
trustee, receiver, or liquidator, custodian or other similar official is hereby
authorized by each of the Holders to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of payments directly to the
Holders, to pay to the Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee,
except as a result of its negligence or bad faith, and all other amounts due to
the Trustee or any predecessor Trustee pursuant to Section 4.6. To the extent
that such payment of reasonable compensation, expenses, disbursements, advances
and other amounts out of the estate in any such proceedings shall be denied for
any reason, payment of the same shall be secured by a lien on, and shall be paid
out of, any and all distributions, dividends, moneys, securities and other
property which the Holders may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities, or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
All rights of action and of asserting claims under this Agreement, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof and any trial or
other proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Agreement to which the
Trustee shall be a party) the Trustee shall be held to represent all the
Holders, and it shall not be necessary to make any Holders of such Securities
parties to any such proceedings.
Section 8.3 Application of Proceeds. Any monies collected by the
Trustee pursuant to this Article in respect of any Securities shall be applied
in the following order at the date or dates fixed by the Trustee upon
presentation of the several Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment in exchange for
the presented Securities if only partially paid or upon surrender thereof if
fully paid:
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FIRST: To the payment of costs and expenses in respect of which monies
have been collected, including reasonable compensation to the Trustee and each
predecessor Trustee and their respective agents and attorneys and of all
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee, except as a result of its negligence or bad faith, and
all other amounts due to the Trustee or any predecessor Trustee pursuant to
Section 4.6;
SECOND: To the payment of the whole amount then owing and unpaid upon
all the Securities, with interest at the Default Interest Rate on all such
amounts, and in case such monies shall be insufficient to pay in full the whole
amount so due and unpaid upon the Securities, then to the payment of such
amounts without preference or priority of any security over any other Security,
ratably to the aggregate of such amounts due and payable and such payments shall
be deemed to be Contingent Payments made for purposes of Section 3.1(e); and
THIRD: To the payment of the remainder, if any, to the Company or
any other person lawfully entitled thereto.
Section 8.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Agreement by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Agreement or in aid of the exercise
of any power granted in this Agreement or to enforce any other legal or
equitable right vested in the Trustee by this Agreement or by law.
Section 8.5 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee or any Holder shall have proceeded to enforce any right under
this Agreement and such proceedings shall have been discontinued or abandoned
for any reason, or shall have been determined adversely to the Trustee or to
such Holder, then and in every such case the Company and the Trustee and the
Holders shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company, the Trustee and
the Holders shall continue as though no such proceedings had been taken.
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Section 8.6 Limitations on Suits by Holders. No Holder of any Security
shall have any right by virtue or by availing of any provision of this Agreement
to institute any action or proceeding at law or in equity or in bankruptcy or
otherwise upon or under or with respect to this Agreement, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of not less than
thirty percent of the Securities then Outstanding shall have made written
request upon the Trustee to institute such action or proceedings in its own name
as trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby and the Trustee for sixty days after its receipt of
such notice, request and offer of indemnity shall have failed to institute any
such action or proceeding and no direction inconsistent with such written
request shall have been given to the Trustee pursuant to Section 8.9; it being
understood and intended, and being expressly covenanted by the taker and Holder
of every Security with every other taker and Holder and the Trustee, that no one
or more Holders of Securities shall have any right in any manner whatever by
virtue or by availing of any provision of this Agreement to effect, disturb or
prejudice the rights of any other such Holder of Securities, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under this Agreement, except in the manner herein provided and
for the equal, ratable and common benefit of all Holders of Securities. For the
protection and enforcement of the provisions of this Section, each and every
Holder and the Trustee shall be entitled to such relief as can be given either
at law or in equity.
Section 8.7 Unconditional Right of Holders to Institute Certain Suits.
Notwithstanding any other provision in this Agreement and any provision of any
Security, the right of any Holder of any Security to receive payment of the
amounts payable in respect of such Security on or after the respective due dates
expressed in such Security, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 8.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 8.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
No delay or omission of the Trustee or of any Holder to exercise any
right or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and, subject to
Section 8.6, every power and remedy given by this Agreement or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Holders.
Section 8.9 Control by Holders. The Holders of a majority of the
Securities at the time Outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee with respect
to the Securities by this Agreement; provided that such direction shall not be
otherwise than in accordance with law and the provisions of this Agreement; and
provided further that (subject to the provisions of Section 4.1) the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, shall determine that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith by its board
of directors, the executive committee, or a trust committee of directors or
responsible officers of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or if
the Trustee in good faith shall so determine that the actions or forebearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities not joining in the giving of said
direction, it being understood that (subject to Section 4.1) the Trustee shall
have no duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such Holders.
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Nothing in this Agreement shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Holders.
Section 8.10 Waiver of Past Defaults. In the case of a default or an
Event of Default specified in clause (b), (c) or (d) of Section 8.1, the Holders
of a majority of all the Securities then Outstanding may waive any such default
or Event of Default, and its consequences except a default in respect of a
covenant or provisions hereof which cannot be modified or amended without the
consent of the Holder of each Security affected. In the case of any such waiver,
the Company, the Trustee and the Holders of the Securities shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Agreement; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 8.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall transmit to the Holders, as the names
and addresses of such Holders appear on the Security Register, notice by mail of
all defaults which have occurred and are known to the Trustee, such notice to be
transmitted within ninety days after the occurrence thereof, unless such
defaults shall have been cured before the giving of such notice (the term
"default" or "Defaults" for the purposes of this Section being hereby defined to
mean any event or condition which is, or with notice or lapse of time or both
would become, an Event of Default); provided that, except in the case of default
in the payment of the amounts payable in respect of any of the Securities, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
or trustees and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
Section 8.12 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Agreement agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Agreement or in any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder or group of Holders holding in the aggregate more than
twenty five percent of the Securities Outstanding or to any suit instituted by
any Holder for the enforcement of the payment of any Security on or after the
due date expressed in such Security.
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ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on Certain Terms. The
Company covenants that it will not merge or consolidate with or into any other
Person or sell or convey all or substantially all of its assets to any Person,
unless (i) the Company shall be the continuing corporation, or the successor
Person or the Person which acquires by sale or conveyance substantially all the
assets of the Company shall be a Person organized under the laws of the United
States of America or any State thereof and shall expressly assume by an
instrument supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Agreement to be performed or
observed by the Company and (ii) the Company, or such successor Person, as the
case may be, shall not, immediately after such merger or consolidation, or such
sale or conveyance, be in default in the performance of any such covenant or
condition.
Section 9.2 Successor Person Substituted. In case of any such
consolidation, merger, sale or conveyance, or a transfer to a person other than
a Subsidiary or an Affiliate of the Company of the Somatogen Recombinant
Hemoglobin Technologies as provided in Section 3.1(g) and following such an
assumption by the successor Person, such successor Person shall succeed to and
be substituted for the Company with the same effect as if it had been named
herein. Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company prior to such succession any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered to the Trustee for authentication, and any Securities which
such successor corporation thereafter shall cause to be signed and delivered to
the Trustee for that purpose. All of the Securities so issued shall in all
respects have the same legal rank and benefit under this Agreement as the
Securities theretofore or thereafter issued in accordance with the terms of this
Agreement as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
In the event of any such sale, transfer or conveyance (other than a
conveyance by way of lease) the Company or any Person which shall theretofore
have become such in the manner described in this Article shall be discharged
from all obligations and covenants under this Agreement and the Securities and
may be liquidated and dissolved.
Section 9.3 Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 4.1 and 4.2, shall receive an Opinion of Counsel,
prepared in accordance with Sections 1.3 and 1.4, as conclusive evidence that
any such consolidation, merger, sale or conveyance, and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions of
this Agreement.
34
ARTICLE 10
REDEMPTION
Section 10.1 Right of Redemption. Redemption of Securities, as
permitted by the provisions of this Agreement, shall be made in accordance with
such provisions and this Article 10. The Company shall have the right to redeem,
in whole or in part, at any time or from time to time, the Securities.
Section 10.2 Notices to Trustees. If the Company elects to redeem any
Securities, it shall notify the Trustee in writing of the Redemption Date and
the aggregate number of CPR Certificates to be redeemed and whether it wants the
Trustee to give notice of redemption to the Holders.
The Company shall give each notice to the Trustee provided for in this
Section 10.2 at least thirty days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee and the Paying Agent). Any such
notice may be conditional and may be cancelled at any time prior to notice of
such redemption being mailed to any Holder and shall thereby be void and of no
effect.
Section 10.3 Selection of CPR Certificates to Be Redeemed. If less than
all of the CPR Certificates are to be redeemed, the Trustee shall select the CPR
Certificates to be redeemed by lot or by such other method as the Trustee shall
determine to be appropriate and fair.
The Trustee shall make the selection from the CPR Certificates
outstanding and not previously called for redemption and shall promptly notify
the Company in writing of the CPR Certificates selected for redemption and, in
the case of any CPR Certificate selected for partial redemption, the number of
CPRs thereof to be redeemed. Provisions of this Agreement that apply to CPR
Certificates called for redemption also apply to portions of CPR Certificates
called for redemption.
Section 10.4 Notice of Redemption. At least twenty days but not more
than sixty days before a Redemption Date, the Trustee shall mail a notice of
redemption by first class mail, postage prepaid, to each Holder whose CPR
Certificates are to be redeemed. Each notice for redemption shall identify the
CPR Certificates to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the name, address and telephone number of the Trustee and of
the Paying Agent;
(d) that CPR Certificates called for redemption must be surrendered to
the Trustee at the address specified in such notice to collect the Redemption
Price;
(e) that, unless the Company defaults in its obligation to deposit with
the Trustee cash in an amount to fund the Redemption Price, in accordance with
Section 10.6 hereof or such redemption payment is otherwise prohibited,
Contingent Payments on CPR Certificates called for redemption ceases to accrue
on and after the Redemption Date and the only remaining right of the Holders of
such CPR Certificates is to receive payment of the Redemption Price, upon
surrender to the Trustee of the CPR Certificates called for redemption and to be
redeemed;
35
(f) if any CPR Certificate is being redeemed in part, the portion of
such CPR Certificate to be redeemed and that, after the Redemption Date, and
upon surrender of such CPR Certificate, a new CPR Certificate or CPR
Certificates equal to the Royalty Certificates unredeemed portion thereof will
be issued;
(g) if less than all the CPR Certificates are to be redeemed, the
identification of the particular CPR Certificates (or portion thereof) to be
redeemed, as well as the aggregate number of CPR Certificates to be redeemed and
the aggregate number of CPR Certificates to be outstanding after such partial
redemption;
(h) the CUSIP number of the CPR Certificates to be redeemed; and
(i) that the notice is being sent pursuant to this Section 10.4 and
pursuant to the optional redemption provisions of the CPR Certificates.
Section 10.5 Effect of Notice of Redemption. Once notice of redemption
is mailed in accordance with Section 10.4, CPR Certificates called for
redemption become due and payable on the Redemption Date and at the Redemption
Price. Upon surrender to the Paying Agent, such CPR Certificates called for
redemption shall be paid at the Redemption Price; provided, that if a Redemption
Date is a non-Business Day, payment shall be made on the next succeeding
Business Day and no interest shall accrue for the period from such Redemption
Date to such succeeding Business Day.
Section 10.6 Deposit of Redemption Price. On or prior to 10:00 a.m.,
New York City time, on the Redemption Date, the Company shall deposit with the
Trustee cash sufficient to pay the Redemption Price of all CPR Certificates to
be redeemed on such Redemption Date (other than CPR Certificates or portions
thereof called for redemption on that date that have been delivered by the
Company to the Trustee for cancellation). The Trustee shall promptly return to
the Company any cash so deposited which is not required for that purpose upon
the written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article 10 and payment of the CPR Certificates called for
redemption is not otherwise prohibited, the right to Contingent Payments with
respect to the CPR Certificates to be redeemed will cease to accrue on the
applicable Redemption Date, whether or not such CPR Certificates are presented
for payment. Notwithstanding anything herein to the contrary, if any CPR
Certificate surrendered for redemption in the manner provided in the CPR
Certificates shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, such CPR
Certificates shall remain Outstanding and shall continue to be entitled to
Contingent Payments in the manner provided in Section 4.1 hereof and the CPR
Certificate.
Section 10.7 CPR Certificates Redeemed in Part. Upon surrender of a CPR
Certificate that is to be redeemed in part, the Trustee shall execute and the
Trustee shall authenticate and deliver to the Holder, without service charge to
the Holder, a new CPR Certificate or CPR Certificates equal in principal amount
to the unredeemed portion of the CPR Certificate surrendered.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
▇▇▇▇▇▇ INTERNATIONAL INC.
By: ________________________________
Name:
Title:
FIRST TRUST NATIONAL ASSOCIATION, as Trustee
By: ________________________________
Name:
Title:
37
▇▇▇▇▇▇ International Inc.
No. Certificate for Contingent Payment Rights
This certifies that, or registered assigns (the "Holder"), is
the registered holder of the number of Contingent Payment Rights ("CPRs") set
forth above. Each CPR entitles the Holder, subject to the provisions contained
herein and in the Agreement referred to on the reverse hereof, to payments from
▇▇▇▇▇▇ International Inc., a Delaware corporation (the "Company"), in an amount
and in the form determined pursuant to the provisions set forth on the reverse
hereof and as more fully described in the Agreement referred to on the reverse
hereof. Such payment shall be made on each Payment Date or, if earlier, the
Redemption Date or the Default Payment Date, each as defined in the Agreement
referred to on the reverse hereof.
Payment of any amounts pursuant to this CPR Certificate shall
be made only to the registered Holder (as defined in the Agreement) of this CPR
Certificate. Such payment shall be made in the Borough of Manhattan, The City of
New York, or at any other office or agency maintained by the Company for such
purpose, in such coin or currency of the United States of America as at the time
is legal tender for the payment of public and private debts; provided, however,
the Company may pay such amounts by wire transfer or check payable in such
money. First Trust National Association has been initially appointed as Paying
Agent in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this CPR
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this CPR Certificate shall not be entitled to any benefit under the Agreement,
or be valid or obligatory for any purpose.
38
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: ▇▇▇▇▇▇ International Inc.
By______________________________
Attest:
_____________________________
Authorized Signature
39
[Form of Reverse of CPR Certificate]
This CPR Certificate is issued under and in accordance with
the Contingent Payment Rights Agreement, dated as of [insert date], 1998 (the
"Agreement"), between the Company and First Trust National Association, a
national association, as trustee (the "Trustee," which term includes any
successor Trustee under the Agreement), and is subject to the terms and
provisions contained in the Agreement, to all of which terms and provisions the
Holder of this CPR Certificate consents by acceptance hereof. The Agreement is
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Agreement for a full statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Trustee and the holders of the CPRs. All capitalized terms used in
this CPR Certificate without definition shall have the respective meanings
ascribed to them in the Agreement. Copies of the Agreement can be obtained by
contacting the Trustee.
Subject to extension or earlier redemption as hereinafter
provided, until March 15, 2008, the Company shall pay to the Holder hereof on
March 15 and September 15 of each year (or if such day is not a Business Day,
without accruing any interest, on the next succeeding Business Day), beginning
March 15, 1999, or if such day is not a Business Day, without accruing any
interest, on the next Business Day (as the same may be extended, each a "Payment
Date"), for each CPR represented hereby, a pro rata portion of the Contingent
Payment with respect to the Payment Measuring Period ended immediately prior to
such Payment Date, unless the CPR(s) represented by this CPR Certificate shall
have been redeemed as provided for herein; provided, that in no event shall the
aggregate of all Contingent Payments with respect to each CPR exceed two dollars
($2.00) and, provided, further, that in no event shall the Company be required
to a make a payment on any Payment Date in an amount less than $0.05 per CPR and
such amounts which would otherwise be payable on such Payment Date shall (x) be
aggregated with the amount payable with respect to the next Payment Measuring
Period and (y) not bear interest except on a Default Payment Date.
The "Contingent Payment," with respect to any Payment
Measuring Period, equals five percent of the Net Sales that are attributable to
the commercial sale of Products.
"Net Sales" means the actual gross amount invoiced by the
Company, its Affiliates, licensees or distributors for the sale of Products to
any third parties during a Payment Measuring Period less: (a) direct
transportation charges, including insurance; (b) trade, quantity and other
discounts and rebates actually allowed and taken to the extent customary in the
trade; and (c) allowances or credits, including but not limited to, allowances
or credits to customers on account of rejection or return of the Products;
provided that (i) a sale or transfer to an Affiliate of the Company for resale
by such Affiliate shall not be considered a sale for the purpose of this
provision, but the resale by such Affiliate shall be a sale for such purposes,
and the term "sale" shall include a transfer or other disposition to a customer;
(ii) Net Sales shall not include reserves for bad debts or allowances, credits
or rebates not covered above; and (iii) a sale of Products shall occur at the
earlier of (a) the transfer of title in such Products to a third party or (b)
the shipment of such Products from the manufacturing or warehouse facilities of
the manufacturer of such Products to a third party.
40
Net Sales shall not include license fees or other advance
payments received by the Company from a licensee or distributor of the Products
which is not derived from sales of Products, but shall include the Net Sales of
such licensee or distributor.
"Payment Measuring Period" means (i) the period from the
Effective Date to December 31, 1998 and (ii) each six month period ended June 30
and December 31 thereafter, through and including the Final Payment Date.
"Products" shall mean all products in which the primary active
ingredient is human hemoglobin, or derivatives, mutants or modifications
thereof, which have been produced in culture of microbial cells (including yeast
cells) which have been modified using Somatogen Recombinant Hemoglobin
Technology (other than clinical indications for any such Products that are in
clinical trials as of the date of the Merger Agreement).
"Somatogen Recombinant Hemoglobin Technology" shall mean all
technology owned by or licensed to Somatogen on or prior to the Effective Date,
which involves the use of recombinant DNA techniques.
If for any reason the Contingent Payment has not been finally
determined as of the Payment Date, then the Payment Date will be automatically
extended until the date that is the seventh Business Day after the date of which
the Contingent Payment has been finally determined.
The CPRs will be redeemable, in whole or in part, at any time
and from time to time, at the option of the Company at a redemption price for
each CPR represented hereby equal to $2 less all Contingent Payments made or
provided for, through the Redemption Date. The Agreement does not prohibit the
Company from otherwise acquiring CPRs.
The Contingent Payment, if any, and interest thereon, if any,
shall be payable by the Company in such coin or currency of the United States of
America as at the time is legal tender for the payment of public and private
debts; provided, however, the Company may pay such amounts by its check or wire
transfer payable in such money. First Trust National Association has been
initially appointed as Paying Agent in the Borough of Manhattan, The City of New
York.
If an Event of Default occurs and is continuing, either the
Trustee may or if the Holders holding an aggregate of at least fifty percent of
the Outstanding CPRs, by notice to the Company and to the Trustee shall bring
suit to recover all amounts then due and payable, with interest at the Default
Interest Rate from the Default Payment Date through the date payment is made or
duly provided for.
41
In the event that, it is finally determined that no amount is
payable on the CPRs to the Holder on any Payment Date, the Company shall give
the Trustee notice of such determination. The failure to give such notice or any
defect therein shall not affect the validity of such determination.
The Agreement permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the holders of CPRs under the
Agreement at any time by the Company and the Trustee with the consent of the
holders of a majority of the CPRs at the time outstanding.
No reference herein to the Agreement and no provision of this
CPR Certificate or of the Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay any amounts determined
pursuant to the terms hereof and of the Agreement at the times, place and
amount, and in the manner, herein prescribed. The Holder of this CPR
Certificate, by acceptance hereof, agrees that the Company has no obligation to
initiate or continue research, development or commercialization activities with
respect to Products or any of the Somatogen Recombinant Hemoglobin Technology
and, in its sole subjective discretion, the Company may abandon efforts to
research, develop or commercialize such technology or Products.
The Agreement provides that the Trustee shall receive an
Officers' Certificate, on or before each Payment Date, certifying the
Consolidated Revenues from sales of Products. The Agreement also provides that
The Company shall not transfer (other than transfers to Subsidiaries and
Affiliates) the Somatogen Recombinant Hemoglobin Technology unless the
transferor agrees to be bound by the Agreement to the same extent as the Company
is then bound thereby, whereupon the Company shall be released from any
obligation under the Agreement.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of the CPRs represented by this CPR
Certificate is registrable on the Security Register, upon surrender of this CPR
Certificate for registration of transfer at the office or agency of the Company
maintained for such purpose in the Borough of Manhattan, The City of New York,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to The Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new CPR Certificates, for the same amount of CPRs, will be issued to the
designated transferee or transferees. The Company hereby initially designates
the office of First Trust National Association [insert address of trustee] as
the office for registration of transfer of this CPR Certificate.
As provided in the Agreement and subject to certain
limitations therein set forth, this CPR Certificate is exchangeable for one or
more CPR Certificates representing the same number of CPRs as represented by
this CPR Certificate as requested by the Holder surrendering the same.
No service charge will be made for any registration of
transfer or exchange of CPRs, but the Company may require payment of a sum
sufficient to cover all documentary, stamp or similar issue or transfer taxes or
other governmental charges payable in connection with any registration of
transfer or exchange.
Prior to the time of due presentment of this CPR Certificate
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this CPR Certificate
is registered as the owner hereof for all purposes, and neither the Company, the
Trustee nor any agent shall be affected by notice to the contrary.
Neither the Company nor the Trustee has any duty or obligation
to the holder of this CPR Certificate, except as expressly set forth herein or
in the Agreement.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
this is one of the CPR Certificates referred to in the within-mentioned
Agreement.
FIRST TRUST NATIONAL
ASSOCIATION,
Trustee and Transfer
Agent and Registrar
Dated: ____________________
By _____________________________
Authorized Signatory