EXHIBIT 4.3
EXECUTION COPY
COLLATERAL PLEDGE AND SECURITY AGREEMENT
Dated February 1, 2002
From
OSI PHARMACEUTICALS, INC.
AS PLEDGOR
to
THE BANK OF NEW YORK
AS TRUSTEE
TABLE OF CONTENTS
Section 1. Grant Of Security........................................................................2
Section 2. Security For Obligations.................................................................3
Section 3. Maintaining The Pledged Account..........................................................3
Section 4. Delivery And Control Of Collateral.......................................................3
Section 5. Release Of Amounts.......................................................................5
Section 6. Representations And Warranties...........................................................5
Section 7. Further Assurances.......................................................................6
Section 8. Covenants................................................................................8
Section 9. Post-Closing Changes.....................................................................8
Section 10. Transfers And Other Liens................................................................8
Section 11. Trustee Appointed Attorney-In-Fact.......................................................8
Section 12. No Assumption Of Duties; Reasonable Care.................................................9
Section 13. Remedies................................................................................10
Section 14. Indemnity And Expenses..................................................................11
Section 15. Security Interest Absolute..............................................................11
Section 16. Amendments; Waivers.....................................................................12
Section 17. Notices; Etc............................................................................12
Section 18. Continuing Security Interest; Assignments Under The Indenture...........................13
Section 19. Termination.............................................................................13
Section 20. Execution In Counterparts...............................................................13
Section 21. Governing Law; Submission To Jurisdiction; Waiver Of Jury Trial.........................13
Schedule I Pledged Security Entitlements
Schedule II Osi Pharmaceuticals
EXHIBIT A FORM OF CONTROL AGREEMENT
i
COLLATERAL PLEDGE AND SECURITY AGREEMENT
COLLATERAL PLEDGE AND SECURITY AGREEMENT dated February 1, 2002 made
by OSI Pharmaceuticals, Inc., a Delaware corporation (the "PLEDGOR"), to The
Bank of
New York, a
New York Banking Corporation, in its capacity as Trustee
(the "TRUSTEE") for the holders (the "HOLDERS") of the Notes (as defined
herein), issued by the Pledgor under the Indenture referred to below.
Capitalized terms used and not defined herein have the meanings set forth or
referred to in the Indenture.
PRELIMINARY STATEMENTS
(1) The Pledgor and the Trustee have entered into that certain
Indenture dated as of February 1, 2002 (said Indenture, as it may hereafter be
amended, amended and restated, supplemented or otherwise modified from time to
time, being the "INDENTURE") pursuant to which the Pledgor is issuing on the
date hereof $200,000,000 aggregate principal amount of 4% Convertible Senior
Subordinated Notes due 2009.
(2) The Pledgor has security entitlements (the "PLEDGED SECURITY
ENTITLEMENTS") with respect to (i) the United States Treasury securities
identified on Schedule I hereto, and credited to the Pledgor's account, Account
No. 341431 (the "PLEDGED ACCOUNT"), with the Trustee at its office at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and (ii) all other financial assets credited
from time to time to the Pledged Account (such other financial assets, together
with the Pledged Security Entitlements, the "PLEDGED FINANCIAL ASSETS").
(3) To secure the obligations of the Pledgor under the Indenture and
the Notes to pay in full each of the first six scheduled interest payments on
the Notes and to secure repayment of the principal and interest on the Notes in
the event that the Notes become due and payable prior to such time as the first
six scheduled interest payments thereon shall have been paid in full
(collectively, the "OBLIGATIONS"), the Pledgor has agreed (i) to pledge to the
Trustee for its benefit and the ratable benefit of the Holders of the Notes, a
security interest in the Collateral (as defined herein) and (ii) to execute and
deliver this Pledge Agreement in order to secure the payment and performance by
the Pledgor of all of the Obligations.
(4) It is a condition precedent to the initial purchase of the Notes
by the initial Holders thereof that the Pledgor shall have granted the security
interest and made the pledge contemplated by this Agreement.
(5) Unless otherwise defined in this Agreement or in the Indenture,
terms defined in Article 8 or 9 of the UCC (as defined below) and/or in the
Federal Book Entry Regulations (as defined below) are used in this Agreement as
such terms are defined in such Article 8 or 9 and/or the Federal Book Entry
Regulations. "UCC" means the Uniform Commercial Code as in effect, from time to
time, in the State of
New York; PROVIDED that, if perfection or the effect of
perfection or non-perfection or the priority of any security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other
than the State of
New York, "UCC" means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority. The term "FEDERAL BOOK ENTRY REGULATIONS" means (a) the federal
regulations contained in Subpart B ("TREASURY/RESERVE AUTOMATED DEBT ENTRY
SYSTEM (TRADES)") governing book-entry securities consisting of U.S. Treasury
bonds, notes and bills and Subpart D ("ADDITIONAL PROVISIONS") of 31 C.F.R. Part
357, 31 C.F.R. Section. 357.2, Section. 357.10 through Section. 357.14 and
Section. 357.41 through Section. 357.44 and (b) to the extent substantially
identical to the federal regulations referred to in clause (a) above (as in
effect from time to time), the federal regulations governing other book-entry
securities.
NOW, THEREFORE, in consideration of the premises and in order to
induce the initial Holders of the Notes to purchase the Notes, the Pledgor
hereby agrees with the Trustee for the ratable benefit of the Holders of the
Notes as follows:
Section 1. GRANT OF SECURITY
The Pledgor hereby pledges to the Trustee, for the ratable benefit of
the Holders of the Notes, and hereby grants to the Trustee, for the ratable
benefit of the Holders of the Notes, a security interest in, such Pledgor's
right, title and interest in and to the following, in each case, as to each type
of property described below, whether now owned or hereafter acquired by such
Pledgor, wherever located, and whether now or hereafter existing or arising
(collectively, the "COLLATERAL"):
(a) the Pledged Account, all Pledged Security Entitlements
with respect to all Pledged Financial Assets from time to time credited to
the Pledged Account, and all Pledged Financial Assets, and all dividends,
distributions, return of capital, interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Pledged Security
Entitlements or such Pledged Financial Assets and all subscription
warrants, rights or options issued thereon or with respect thereto, any
such property not constituting "securities" as defined in the UCC to be
treated as a financial asset pursuant to Article 8 of the UCC;
(b) all other securities, security entitlements and other
financial assets from time to time acquired by the Pledgor pursuant to
Article 12 of the Indenture;
(c) all proceeds of any and all of the Collateral (including,
without limitation, proceeds, collateral and supporting obligations that
constitute property of the types described in clauses (a) and (b) of this
Section 1 and this clause (c) and, to the extent not otherwise included,
all cash).
2
Section 2. SECURITY FOR OBLIGATIONS
The security interest granted by this Agreement secures the payment of
all the Obligations, whether for principal or interest, now or hereafter
existing under the Notes (all such Obligations being the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Secured Obligations and would
be owed by the Pledgor to the Trustee or any Holder of the Notes but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Pledgor.
Section 3. MAINTAINING THE PLEDGED ACCOUNT
So long as any Secured Obligation shall remain outstanding:
(a) The Pledgor will maintain separately the Pledged Account
with the Trustee.
(b) The Trustee shall have sole right to direct the
disposition of funds with respect to the Pledged Account; and it shall be a
term and condition of the Pledged Account, notwithstanding any term or
condition to the contrary in any other agreement relating to the Pledged
Account, that, except as otherwise provided by the provisions of Section 5
and Section 19, no amount (including, without limitation, interest on the
Pledged Securities Entitlements or Pledged Financial Assets credited
thereto) will be paid or released to or for the account of, or withdrawn by
or for the account of, the Pledgor or any other Person from the Pledged
Account.
(c) The Trustee may, at any time and without notice to, or
consent from, the Pledgor, transfer, or direct the transfer of, funds from
the Pledged Account to satisfy the Pledgor's obligations under the
Indenture if an Event of Default (as hereinafter defined) shall have
occurred and be continuing.
The Pledged Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
Section 4. DELIVERY AND CONTROL OF COLLATERAL
(a) All cash, certificates or instruments representing or
evidencing the Collateral shall be delivered to and held by or on behalf of
the Trustee pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance satisfactory to the
Trustee. The Trustee shall have the right, at any time in its discretion
and without notice to the Pledgor, to transfer to or to register in the
name of the Trustee or any of its nominees any or all of the Collateral. In
addition, the Trustee shall have the right at any time to exchange
certificates or instruments representing or evidencing the Collateral for
certificates or instruments of smaller or larger denominations. Also, the
Trustee shall have the right at any time to convert Collateral consisting
of financial assets
3
credited to the Pledged Account to Collateral consisting of financial
assets held directly by the Trustee, and to convert Collateral consisting
of financial assets held directly by the Trustee to Collateral consisting
of financial assets credited to the Pledged Account.
(b) With respect to any Collateral in which the Pledgor has
any right, title or interest and that constitutes an uncertificated
security, the Pledgor shall cause the issuer thereof either (i) to register
the Trustee as the registered owner of such security or (ii) to agree in
writing with the Pledgor and the Trustee that such issuer will comply with
instructions with respect to such security originated by the Trustee
without further consent of the Pledgor, such agreement to be in form and
substance satisfactory to the Trustee.
(c) With respect to any Collateral in which the Pledgor has
any right, title or interest and that constitutes a security entitlement in
which the Trustee is not the entitlement holder, such Pledgor will cause
the securities intermediary with respect to such security entitlement
either (i) to identify in its records the Trustee as the entitlement holder
of such security entitlement against such securities intermediary or (ii)
to agree in an authenticated record with such Pledgor and the Trustee that
such securities intermediary will comply with entitlement orders (that is,
notifications communicated to such securities intermediary directing
transfer or redemption of the financial asset to which such Pledgor has a
security entitlement) originated by the Trustee without further consent of
such Pledgor, such authenticated record to be in substantially the form of
Exhibit A hereto or otherwise in form and substance satisfactory to the
Trustee.
(d) Prior to or concurrently with the execution and delivery
hereof and prior to the transfer to the Trustee of the Pledged Financial
Assets, the Trustee shall establish the Pledged Account on its books as a
separate account segregated from all other custodial or collateral accounts
at its office. Upon transfer of the Pledged Financial Assets to the
Trustee, as confirmed to the Trustee by the securities intermediary, the
Trustee shall make appropriate book entries indicating that the Pledged
Financial Assets have been credited to and are held in the Pledged Account.
Subject to the other terms and conditions of this Agreement, all funds or
other property held by the Trustee pursuant to this Agreement shall be held
in the Pledged Account subject to the exclusive dominion and control of the
Trustee and exclusively for the ratable benefit of the Holders of the Notes
and segregated from all other funds or other property otherwise held by the
Trustee.
(e) All Collateral shall be retained in the Pledged Account
pending disbursement pursuant to the terms hereof.
(f) Concurrently with the execution and delivery of this
Agreement, the Trustee is delivering to the Pledgor a duly executed Control
Agreement (the "Control Agreement") in the form of Exhibit A hereto, and a
certificate of an officer of the Trustee, confirming the Trustee's
establishment and separate maintenance of the Pledged Account, its receipt
and holding of the Pledged Financial Assets and the crediting of the
Pledged Financial Assets to the Pledged Account, all in accordance with
this Agreement.
4
(g) Concurrently with the execution and delivery of this
Agreement, the Pledgor is delivering to the Trustee financing statements,
in form acceptable to the Trustee, for filing under the UCC in all
jurisdictions as necessary or desirable in order to perfect and protect the
security interest created by this Agreement, covering the Collateral
described in this Agreement.
Section 5. RELEASE OF AMOUNTS
(a) On the due date of any of the first six scheduled interest
payments on the Notes, the Trustee will release from the Pledged Account
funds sufficient to provide for the payment of the interest on the Notes in
accordance with the payment provisions of the Indenture to the Holders of
the Notes from (and to the extent of) proceeds of the Pledged Financial
Assets. Nothing in this Section 5 shall affect the Trustee's rights to
apply the Collateral to the payments of amounts due on the Notes upon
acceleration thereof.
(b) The Trustee shall liquidate Collateral in the Pledged
Account in order to make any scheduled payment of interest pursuant to the
Notes, unless there are sufficient funds in the Pledged Account on such
interest payment date. The Trustee shall be entitled to sell any Collateral
as contemplated hereunder prior to the maturity of such Collateral and the
Pledgor shall be responsible for the costs and expenses of such sale.
(c) If at any time before the first six scheduled interest
payments on the Notes have been paid in full, repayment of the principal
amount of the Notes shall be accelerated under the Indenture, the Trustee
shall liquidate all Collateral in the Pledged Account for payment to the
Holders, subject to the automatic stay provisions of bankruptcy law, if
applicable. Distributions from the Pledged Account will be applied first to
any accrued and unpaid interest on the Notes and second, to the extent
available, to the repayment of the outstanding principal of the Notes.
Section 6. REPRESENTATIONS AND WARRANTIES
The Pledgor represents and warrants that:
(a) The execution and delivery by the Pledgor of, and the
performance by the Pledgor of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation of the Pledgor or any material agreement or other material
instrument binding upon the Pledgor or any of its subsidiaries or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Pledgor or any of its subsidiaries, or result in the
creation or imposition of any lien on any assets of the Pledgor, except for
the security interests granted under this Agreement.
(b) No consent of any other person and no approval,
authorization, order of, action by, notice to, filing or qualification
with, any governmental authority, regulatory body, agency or other third
party is required (i) for the execution, delivery or performance by the
Pledgor of this Agreement, (ii) for the grant by the Pledgor of the
5
assignment, pledge and security interest created hereby, (iii) for the
perfection or maintenance of the assignment, pledge and security interest
created hereunder (including the first priority nature of such assignment,
pledge and security interest), except for (A) the execution of the Control
Agreement by the parties thereto and (B) the filing of financing statements
under the Uniform Commercial Code, which financing statements have been
delivered to the Trustee for filing or (iv) for the exercise by the Trustee
of its rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement, except as may be required in
connection with the disposition of any portion of the Collateral by laws
affecting the offering and sale of securities generally.
(c) The Pledgor is the legal and beneficial owner of the
Collateral free and clear of any Lien, claim, option or right of others,
except for the security interest created under this Agreement. No effective
financing statement or other instrument similar in effect covering all or
any part of the Collateral or listing the Pledgor or any trade name of the
Pledgor as debtor is on file in any recording office, except such as may
have been filed in favor of the Trustee relating to this Agreement. The
Pledgor has only the trade names listed on Schedule II hereto.
(d) This Pledge Agreement has been duly authorized and validly
executed and delivered by the Pledgor and constitutes a valid and binding
agreement of the Pledgor, enforceable against the Pledgor in accordance
with its terms.
(e) Upon the transfer to the Trustee of the Pledged Financial
Assets, in accordance with Section 4 above, the pledge and grant of a
security interest in the Collateral pursuant to this Agreement for the
benefit of the Trustee and the Holders of the Notes will constitute a valid
and perfected first-priority security interest in such Collateral, securing
the payment of the Secured Obligations, enforceable as such against all
creditors of the Pledgor (and any persons purporting to purchase any of the
Collateral from the Pledgor).
(f) There are no legal or governmental proceedings pending or,
to the best of the Pledgor's knowledge, threatened to which the Pledgor or
any of its subsidiaries is a party or to which any of the properties of the
Pledgor or any such subsidiary are subject that would materially adversely
affect the power or ability of the Pledgor to perform its obligations under
this Agreement or to consummate the transactions contemplated hereby.
(g) The pledge of the Collateral pursuant to this Agreement is
not prohibited by law or governmental regulation (including, without
limitation, Regulations G, T, U, and X of the Board of Governors of the
Federal Reserve System) applicable to the Pledgor.
(h) No Event of Default (as defined below) exists.
(i) The jurisdiction (for purposes of Section 8-110(e) of the
UCC) of the Trustee and the Pledged Account is
New York.
Section 7. FURTHER ASSURANCES
6
(a) The Pledgor agrees that from time to time, at the expense
of the Pledgor, the Pledgor will promptly execute and deliver, or otherwise
authenticate, all further instruments and documents, and take all further
action that may be necessary or desirable, or that the Trustee may request,
in order to perfect and protect any pledge or security interest granted or
purported to be granted by the Pledgor hereunder or to enable the Trustee
to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, the
Pledgor will promptly with respect to Collateral of such Pledgor: (i) if
any such Collateral shall be evidenced by a promissory note or other
instrument or chattel paper, deliver and pledge to the Trustee hereunder
such note or instrument or chattel paper duly indorsed and accompanied by
duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Trustee; (ii) execute or authenticate and
file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as
the Trustee may request, in order to perfect and preserve the security
interest granted or purported to be granted by the Pledgor hereunder; (iii)
deliver and pledge to the Trustee for benefit of the Trustee and the
Holders of the Notes certificates representing Collateral that constitutes
certificated securities, accompanied by undated stock or bond powers
executed in blank; (iv) take all action necessary to ensure that the
Trustee has control of the Pledged Account; and (v) deliver to the Trustee
evidence that all other action that the Trustee may deem reasonably
necessary or desirable in order to perfect and protect the security
interest created by the Pledgor under this Agreement has been taken. From
time to time upon request by the Trustee, the Pledgor will, at the
Pledgor's expense, cause to be delivered to the Trustee, for the benefit of
the Trustee and the Holders of the Notes, an opinion of counsel, from
outside counsel reasonably satisfactory to the Trustee, as to such matters
relating to the transactions contemplated hereby as the Trustee may
reasonably request.
(b) The Pledgor hereby authorizes the Trustee to file one or
more financing or continuation statements, and amendments thereto, relating
to all or any part of the Collateral, in each case without the signature of
the Pledgor, and regardless of whether any particular asset described in
such financing statements falls within the scope of the UCC. A photocopy or
other reproduction of this Agreement or any financing statement covering
the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law. The Pledgor ratifies its authorization
for the Trustee to have filed such financing statements, continuation
statements or amendments filed prior to the date hereof.
(c) The Pledgor will furnish to the Trustee from time to time
statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Trustee may
reasonably request, all in reasonable detail.
(d) The Pledgor will promptly pay all costs incurred in
connection with any of the foregoing within 45 days of receipt of an
invoice therefor. The Pledgor also agrees, whether or not requested by the
Trustee, to take all actions that are necessary to perfect or continue the
perfection of, or to protect the first priority nature of, the Trustee's
security interest in and to the Collateral, including the filing of all
necessary
7
financing and continuation statements, and to protect the Collateral
against the rights, claims of interests of third persons (other than any
such rights, claims or interests created by or arising through the
Trustee).
Section 8. COVENANTS
The Pledgor covenants and agrees with the Trustee and the Holders of
the Notes that from and after the date of this Agreement until the earlier of
payment in full in cash of (x) each of the first six scheduled interest payments
due on the Notes under the terms of the Indenture or (y) all obligations due and
owing under the Indenture and the Notes in the event such obligations become due
and payable prior to payment of the first six scheduled interest payments on the
Notes:
(a) that (i) it will not (and will not purport to) sell or
otherwise dispose of, or grant any option or warrant with respect to, any
of the Collateral or its beneficial interest therein and (ii) it will not
create or permit to exist any Lien or other adverse interest in or with
respect to its beneficial interest in any of the Collateral (except for the
security interest granted under this Agreement); and
(b) that it will not (i) enter into any agreement or
understanding that restricts or inhibits or purports to restrict or inhibit
the Trustee's rights or remedies hereunder, including, without limitation,
the Trustee's right to sell or otherwise dispose of the Collateral or (ii)
fail to pay or discharge any tax, assessment or levy of any nature with
respect to its beneficial interest in the Collateral not later than five
days prior to the date of any proposed sale under any judgments, writ or
warrant of attachment with respect to such beneficial interest.
Section 9. POST-CLOSING CHANGES
(a) The Pledgor will not change its name, type of
organization, jurisdiction of organization, organizational identification
number or location from those set forth in this Agreement without first
giving at least 30 days' prior written notice to the Trustee and taking all
action required by the Trustee for the purpose of perfecting or protecting
the security interest granted by this Agreement. If the Pledgor does not
have an organizational identification number and later obtains one, it will
forthwith notify the Trustee of such organizational identification number.
Section 10. TRANSFERS AND OTHER LIENS
The Pledgor agrees that it will not (i) sell, assign or otherwise
dispose of, or grant any option with respect to, any of the Collateral, or (ii)
create or suffer to exist any lien upon or with respect to any of the Collateral
except for the pledge, assignment and security interest created under this
Agreement.
Section 11. TRUSTEE APPOINTED ATTORNEY-IN-FACT
The Pledgor hereby irrevocably appoints the Trustee the Pledgor's
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or
8
otherwise, from time to time in the Trustee's discretion, to take any action and
to execute any instrument that the Trustee may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above, and
(c) to file any claims or take any action or institute any
proceedings that the Trustee may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Trustee with respect to any of the Collateral, and
(d) to pay or discharge any taxes or Liens levied or placed
upon the Collateral that the Pledgor has failed to pay or discharge in
accordance herewith, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the Trustee in its sole
discretion, and such payments made by the Trustee to become part of the
Obligations of the Pledgor to the Trustee, due and payable immediately upon
demand;
PROVIDED, HOWEVER, that the Trustee shall have no obligation to perform any of
the foregoing. The Trustee's authority under this Section 11 shall include,
without limitation, the authority to endorse and negotiate any checks or
instruments representing proceeds of Collateral in the name of the Pledgor,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, sign the
other documents deemed necessary or appropriate by the Trustee to preserve,
protect or perfect the security interest in the Collateral and to file the same,
prepare, file and sign the Pledgor's name on any notice of Lien, and to take any
other actions arising from or incident to the powers granted to the Trustee in
this Agreement. This power of attorney is coupled with an interest and is
irrevocable by the Pledgor.
Section 12. NO ASSUMPTION OF DUTIES; REASONABLE CARE
The powers conferred on the Trustee hereunder are solely to protect
the interest of the Trustee and the Holders of the Notes in the Collateral and
shall not impose any duty upon it to exercise any such powers. Except for the
safe custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Trustee shall have no duty as to any
Collateral, (a) as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Trustee or any Holder of the Notes has or is
deemed to have knowledge of such matters, (b) as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to
any Collateral or (c) as to investing or reinvesting any of the Collateral or
any loss on any investment. The Trustee shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which it accords its own property.
9
Section 13. REMEDIES
If any Event of Default under the Indenture or default hereunder (any
such Event of Default or default being referred to in this Agreement as an
"EVENT OF DEFAULT") shall have occurred and be continuing:
(a) The Trustee may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon
default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may: (i) require the Pledgor to, and the Pledgor
hereby agrees that it will at its expense and upon request of the Trustee
forthwith, assemble all or part of the Collateral as directed by the
Trustee and make it available to the Trustee at a place and time to be
designated by the Trustee that is reasonably convenient to both parties;
(ii) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of
the Trustee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Trustee may deem commercially
reasonable; and (iii) exercise any and all rights and remedies of the
Pledgor under or in connection with the Collateral, or otherwise in respect
of the Collateral, including, without limitation, (A) withdraw, or cause or
direct the withdrawal, of all funds with respect to the Pledged Account and
(B) exercise all other rights and remedies with respect to the Collateral,
including, without limitation, those set forth in Section 9-607 of the UCC.
The Pledgor agrees that, to the extent notice of sale shall be required by
law, at least ten days' notice to the Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Trustee shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
The Trustee may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
(b) Any cash held by or on behalf of the Trustee and all cash
proceeds received by or on behalf of the Trustee in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Trustee, be held by the Trustee as
collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Trustee pursuant to Section 14) in
whole or in part by the Trustee for the ratable benefit of the Holders of
the Notes against, all or any part of the Secured Obligations, in such
order as the Trustee shall elect. Any surplus of such cash or cash proceeds
held by the Trustee and remaining after payment in full of all the Secured
Obligations shall be paid over to the Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
(c) The Trustee may, without notice to the Pledgor except as
required by law and at any time after the occurrence of an Event of
Default, charge, set-off and otherwise apply all or any part of the Secured
Obligations against any funds held with respect to the Pledged Account or
any part thereof.
10
(d) The Pledgor further agrees to do or cause to be done all
such other acts as may be necessary to make such sale or sales of all or
any portion of the Collateral pursuant to this Section 13 valid and binding
and in compliance with applicable law. The Pledgor further agrees that a
breach of any of the covenants contained in this Section 13 will cause
irreparable injury to the Trustee and the Holders of the Notes, that the
Trustee and the Holders of the Notes have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 13 shall be specifically enforceable against the
Pledgor, and the Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred and is
continuing.
Section 14. INDEMNITY AND EXPENSES
(a) The Pledgor agrees to indemnify, defend and save and hold
harmless the Trustee and its Affiliates and their respective officers,
directors, employees, agents and advisors (each, an "INDEMNIFIED PARTY")
from and against, and shall pay on demand, any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable
fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except to the extent such
claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct.
(b) The Pledgor will upon demand pay to the Trustee the amount
of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents,
that the Trustee may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Trustee or
the Holders of the Notes hereunder or (iv) the failure by the Pledgor to
perform or observe any of the provisions hereof.
(c) Additionally, in acting hereunder the Trustee is entitled
to all rights, privileges, protections, benefits and immunities provided to
it under Section 7.02 of the Indenture.
Section 15. SECURITY INTEREST ABSOLUTE
The obligations of the Pledgor under this Agreement are independent of
the Secured Obligations or any other Obligations of the Pledgor under or in
respect of the Indenture or the Notes, and a separate action or actions may be
brought and prosecuted against the Pledgor to enforce this Agreement. All rights
of the Trustee and the Holders of the Notes and the pledge, assignment and
security interest hereunder, and all obligations of the Pledgor hereunder, shall
be irrevocable, absolute and unconditional irrespective of, and the Pledgor
hereby irrevocably waives (to the maximum extent permitted by applicable law)
any defenses it may now have or may hereafter acquire in any way relating to,
any or all of the following:
11
(a) any lack of validity or enforceability of any of this
Agreement, the Indenture or the Notes or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any the
Indenture or Notes or any other agreement or instrument relating thereto;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, for all or any of the Secured
Obligations;
(d) any manner of application of any Collateral or any other
collateral, or proceeds thereof, to all or any of the Secured Obligations,
or any manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations or any other assets of
the Pledgor;
(e) any change, restructuring or termination of the corporate
structure or existence of the Pledgor;
(f) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Trustee or any Holder of the Notes that might
otherwise constitute a defense available to, or a discharge of, the
Pledgor.
This Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by the Trustee or any Holder of the
Notes or by any other Person upon the insolvency, bankruptcy or reorganization
of the Pledgor or otherwise, all as though such payment had not been made.
Section 16. AMENDMENTS; WAIVERS
(a) No amendment or waiver of any provision of this Agreement,
and no consent to any departure by the Pledgor herefrom, shall in any event
be effective unless the same shall be in writing and signed by the Trustee,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the
part of the Trustee or any Holder of the Notes to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right.
Section 17. NOTICES; ETC.
All notices and other communications provided for hereunder shall be
either (i) in writing (including telegraphic, telecopier or telex communication)
and mailed, telegraphed, telecopied, telexed or otherwise delivered or (ii) by
electronic mail (if electronic mail addresses are designated as provided below)
confirmed immediately in writing, in the case of the Pledgor
12
or the Trustee, addressed to it at its address specified in the Indenture or, as
to any party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and other communications
shall, when mailed, telegraphed, telecopied, telexed, sent by electronic mail or
otherwise, be effective when deposited in the mails, delivered to the telegraph
company, telecopied, confirmed by telex answerback, sent by electronic mail and
confirmed in writing, or otherwise delivered (or confirmed by a signed receipt),
respectively, addressed as aforesaid; except that notices and other
communications to the Trustee shall not be effective until received by the
Trustee. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement shall be effective as delivery of an
original executed counterpart thereof.
Section 18. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER THE
INDENTURE
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the earlier of
the payment in full in cash of (i) each of the first six scheduled interest
payments due on the Notes under the terms of the Indenture and (ii) all
obligations due and owing under the Indenture and the Notes in the event such
obligations become due and payable prior to payment of the first six scheduled
interest payment on the Notes; (b) be binding upon the Pledgor, its successors
and assigns and (c) inure, together with the rights and remedies of the Trustee
hereunder, to the benefit of the Trustee and the Holders of the Notes and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Holder may assign or otherwise transfer all or
any portion of its rights under the Indenture and the Notes to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Holder herein or otherwise, in each case as
provided in the Indenture.
Section 19. TERMINATION
(a) Upon the earlier of the payment in full in cash of each of
the first six scheduled interest payments due on the Notes under the terms
of the Indenture and all Secured Obligations, the pledge and security
interest granted hereby shall terminate and all rights to the Collateral
shall revert to the Pledgor. Upon any such termination, the Trustee will,
at the Pledgor's expense, execute and deliver to the Pledgor such documents
as the Pledgor shall reasonably request to evidence such termination.
Section 20. EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of an original executed counterpart of this Agreement.
Section 21. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of
New York. The Pledgor irrevocably waives all right to
trial by jury in any action,
13
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the actions of the Trustee in
the negotiation, administration, performance or enforcement hereof.
14
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
OSI PHARMACEUTICALS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President and
Chief Financial Officer
THE BANK OF
NEW YORK, as Trustee
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
--------------------------
Title: Vice President
15
SCHEDULE I TO THE
COLLATERAL PLEDGE AND SECURITY AGREEMENT
PLEDGED SECURITY ENTITLEMENTS
DESCRIPTION OF ASSET CUSIP NUMBER FACE AMOUNT OF ASSET
-------------------- ------------ --------------------
US TREASURY BILLS ▇▇▇▇▇▇▇▇▇ USD 4,000,000
US TREAS NTS SEC STRIPPED ▇▇▇▇▇▇▇▇▇ USD 4,000,000
US TREAS NTS SEC STRIPPED ▇▇▇▇▇▇▇▇▇ USD 4,000,000
UNITED STATES TREAS NT STRIPPED PRIN PMT ▇▇▇▇▇▇▇▇▇ USD 4,000,000
UNITED ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ USD 4,000,000
US TREASURY BD STRIPPED ▇▇▇▇▇▇▇▇▇ USD 4,000,000
16
SCHEDULE II TO THE
COLLATERAL PLEDGE AND SECURITY AGREEMENT
OSI PHARMACEUTICALS
