1
EXHIBIT 4.2
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CONTINGENT PAYMENT RIGHTS AGREEMENT
by and between
▇▇▇▇▇▇ INTERNATIONAL INC.
and
FIRST TRUST NATIONAL ASSOCIATION
Dated as of May 4, 1998
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TABLE OF CONTENTS
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Compliance and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.3 Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.4 Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.5 Notices, etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.6 Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.7 Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.8 Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.9 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.10 Benefits of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.12 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.13 Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.14 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.15 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 2
SECURITY FORMS
Section 2.1 Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3
THE SECURITIES
Section 3.1 Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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 Paymentswith respect to CPR Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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Section 3.8 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.9 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 4
THE TRUSTEE
Section 4.1 Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.2 Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.3 Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.4 May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.5 Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.6 Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.7 Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.8 Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.9 Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.10 Acceptance of Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.11 Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . . 22
Section 4.12 Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 5
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 5.1 Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . . . . . 22
Section 5.2 Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.3 Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.4 Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 6
AMENDMENTS
Section 6.1 Amendments Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.2 Amendments with Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.3 Execution of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.4 Effect of Amendments; Notice to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.5 Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.6 Reference in Securities to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 7
COVENANTS
Section 7.1 Payment of Amounts, if any, to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.2 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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Section 7.3 Money for Security Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.4 Certain Purchases and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.5 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.6 Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 7.7 Non-Monetary Consideration for Licensed Products . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 7.8 Foreign Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.9 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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 . . . . . . . . . . . . . . . 30
Section 8.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt . . . . . . . . . . . . . . . . . . . 31
Section 8.3 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.4 Suits for Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.5 Restoration of Rights on Abandonment of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.6 Limitations on Suits by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.7 Unconditional Right of Holders to Institute Certain Suits . . . . . . . . . . . . . . . . . . . . . 35
Section 8.8 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.9 Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.10 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.12 Right of Court to Require Filing of Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . 37
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 9.2 Successor Person Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 9.3 Opinion of Counsel to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 10
REDEMPTION
Section 10.1 Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 10.2 Notices to Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 10.3 Selection of CPR Certificates to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 10.4 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 10.5 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 10.6 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 10.7 CPR Certificates Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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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.
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Reconciliation and tie between Trust Indenture Act of 1939 and Contingent
Payment Rights Agreement, dated as of May 4, 1998.
Trust Indenture Act Section Agreement Section
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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.
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CONTINGENT PAYMENT RIGHTS AGREEMENT, dated as of May 4, 1998 (the
"Agreement"), by and between ▇▇▇▇▇▇ INTERNATIONAL INC., a Delaware corporation
(the "Company"), and FIRST TRUST NATIONAL ASSOCIATION, a national banking
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;
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(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.
"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.
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"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 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"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.
"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 May 4, 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.
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"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
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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.
"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 CPR, 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.
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"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.
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,
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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.
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
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(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 its Corporate Trust Office; 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.
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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
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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.
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.
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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 OF MERGER], 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, a pro rata portion of 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 or before each Payment
Date, an Officers' Certificate, to the Trustee, certifying the Net Sales for
the Payment Measuring Period ended immediately prior to such Payment Date and
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 Date 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.
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(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.
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
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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
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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.
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.
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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 Payments with respect to CPR Certificates. Payment of any
amounts pursuant to the CPRs shall be made 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(c). However, the Company may, at its option,
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 destroyed and a certificate of
destruction shall be issued by the Trustee to the Company, unless otherwise
directed by a Company Order.
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.
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(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
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Board of Directors may be sufficiently evidenced by a Board Resolution and the
Trustee shall not be liable for any action it takes or omits to take in good
faith reliance thereon;
(c) whenever in the administration of this Agreement the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate and the Trustee shall not be liable
for any action it takes or omits to take in good faith reliance thereon or an
Opinion of Counsel;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and 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
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Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Securities.
Section 4.4 May Hold Securities. The Trustee, any Paying Agent,
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities, and, subject to
Sections 4.7 and 4.12, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
Section 4.5 Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder.
Section 4.6 Compensation and Reimbursement. The Company agrees:
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(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
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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.
(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
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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.
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
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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).
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
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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
(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
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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 he
sufficient if such Act shall approve the substance thereof.
Section 6.3 Execution of Amendments. In executing any amendment
permitted by this Article, the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it, and (subject to Section 4.1) shall be fully
protected in relying upon an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement. The Trustee shall
execute any amendment authorized pursuant to this Article VI if the amendment
does not adversely affect the Trustee's own rights, duties or immunities under
this Agreement or otherwise. Otherwise, the Trustee may, but need not, execute
such amendment.
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
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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.
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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 or agency of the Trustee at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ shall be such office or agency of the Company, unless
the Company shall designate and maintain some other office or agency for one or
more of such purposes. The Company or any of its Subsidiaries may act as
Paying Agent, registrar or transfer agent; provided that such Person shall take
appropriate actions to avoid the commingling of funds. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to
time rescind such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York
for such purposes. The Company will give prompt written notice to the Trustee
of any such designation or rescission and any change in the location of any
such office or agency.
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,
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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 and the Holders 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.
If any adjustments or inaccuracies in the amounts paid or payable
under this Section 7.5 are determined by the Holders in their 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 Holders and their consultants or
professional advisors.
Section 7.6 Audits. (a) Upon the written request of Holders
representing at least thirty percent of the outstanding Securities (the
"Requesting Holders") 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
Holders and reasonably acceptable to the Company, at the Requesting
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Holder'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 Holders 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 Holders. 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 Holders deliver 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 Holders, 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
Holders 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
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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.
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
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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,
liquida- tor, assignee, custodian, trustee or sequestrator (or similar
official) of the Company or for any substantial part of its property, or make
any general assignment for the benefit of creditors.
If an Event of Default described above occurs and is continuing, then,
and in each and every such case, unless all of the Securities shall have
already become due and payable, either the Trustee or the 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
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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:
(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
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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:
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
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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.
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
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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
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shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, shall determine that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith by its board
of directors, the executive committee, or a trust committee of directors or
responsible officers of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or if
the Trustee in good faith shall so determine that the actions or forebearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities not joining in the giving of said
direction, it being understood that (subject to Section 4.1) the Trustee shall
have no duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such Holders.
Nothing in this Agreement shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Holders.
Section 8.10 Waiver of Past Defaults. 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.
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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.
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
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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.
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.
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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;
(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 CPR 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;
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(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:
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▇▇▇▇▇▇ 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 at its office or agency 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.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: ▇▇▇▇▇▇ International Inc.
By
--------------------------
Attest:
----------------------------
Authorized Signature
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[Form of Reverse of CPR Certificate]
This CPR Certificate is issued under and in accordance with
the Contingent Payment Rights Agreement, dated as of May 4, 1998 (the
"Agreement"), between the Company and First Trust National Association, a
national banking 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
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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.
"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 $2.00 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 at its office or agency 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
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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.
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 Net Sales
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 at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 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.
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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, as Trustee
Dated:
-------------
By
-------------------------
Authorized Signatory
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