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Exhibit 4.6
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SCHERING-PLOUGH CORPORATION
TO
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
Trustee
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PARTICIPATION RIGHTS
AGREEMENT
Dated as of December ___, 1995
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TABLE OF CONTENTS
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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions of
General Application
Section 101. Definitions . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . 2
Agreement . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . 3
Combination Factor . . . . . . . . . . . . . . . 3
Combination Product . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . 3
Company Request; Company Order . . . . . . . . . 4
Contingent Payment . . . . . . . . . . . . . . . 4
Contingent Payment Date . . . . . . . . . . . . . 4
Contingent Payment Periods . . . . . . . . . . . 4
Corporate Trust Office . . . . . . . . . . . . . 4
Deductible Amount . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . 5
Field . . . . . . . . . . . . . . . . . . . . . . 5
Holder . . . . . . . . . . . . . . . . . . . . . 5
Net Sales . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . 6
Opinion of Counsel . . . . . . . . . . . . . . . 6
Original Agreements . . . . . . . . . . . . . . . 6
Original Owners . . . . . . . . . . . . . . . . . 6
Outstanding . . . . . . . . . . . . . . . . . . . 6
p53 Gene . . . . . . . . . . . . . . . . . . . . 7
p53 Gene Technology . . . . . . . . . . . . . . . 7
Participation Certificate . . . . . . . . . . . . 7
Paying Agent . . . . . . . . . . . . . . . . . . 7
Person . . . . . . . . . . . . . . . . . . . . . 7
Product . . . . . . . . . . . . . . . . . . . . . 7
Product Patent Rights . . . . . . . . . . . . . . 7
Record Date . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . 8
Security Register; Security Registrar . . . . . . 8
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Note: This table of contents shall not, for any purpose, be deemed to be a part
of this Agreement.
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Subsidiary . . . . . . . . . . . . . . . . . . . 8
Term . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . 8
vice president . . . . . . . . . . . . . . . . . 9
Voting Stock . . . . . . . . . . . . . . . . . . 9
Section 102. Compliance Certificates and Opinions . . . . . . 9
Section 103. Form of Documents Delivered to Trustee . . . . . 10
Section 104. Acts of Holders . . . . . . . . . . . . . . . . . 11
Section 105. Notices, etc., to Trustee and Company . . . . . . 12
Section 106. Notice to Holders; Waiver . . . . . . . . . . . . 12
Section 107. Conflict with Trust Indenture Act . . . . . . . . 13
Section 108. Effect of Headings and Table of Contents . . . . 13
Section 109. Successors and Assigns . . . . . . . . . . . . . 13
Section 110. Benefits of Agreement . . . . . . . . . . . . . . 13
Section 111. Governing Law . . . . . . . . . . . . . . . . . . 14
Section 112. Legal Holidays . . . . . . . . . . . . . . . . . 14
Section 113. Separability Clause . . . . . . . . . . . . . . . 14
ARTICLE TWO
Security Forms
Section 201. Forms Generally . . . . . . . . . . . . . . . . . 14
Section 202. Form of Face of Participation
Certificates . . . . . . . . . . . . . . . . . 15
Section 203. Form of Reverse of Security . . . . . . . . . . . 16
Section 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . 18
ARTICLE THREE
The Securities
Section 301. Title and Terms . . . . . . . . . . . . . . . . . 19
Section 302. Registrable Form . . . . . . . . . . . . . . . . 19
Section 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . . . 20
Section 304. Temporary Securities . . . . . . . . . . . . . . 21
Section 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . . . 21
Section 306. Mutilated, Destroyed, Lost and
Stolen Securities . . . . . . . . . . . . . . . 22
Section 307. Payments Under Participation Certificate . . . . 23
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . 24
Section 309. Cancellation . . . . . . . . . . . . . . . . . . 24
ARTICLE FOUR
The Trustee
Section 401. Certain Duties and Responsibilities . . . . . . . 24
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Section 402. Certain Rights of Trustee . . . . . . . . . . . . 26
Section 403. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . . . . 27
Section 404. May Hold Securities . . . . . . . . . . . . . . . 27
Section 405. Money Held in Trust . . . . . . . . . . . . . . . 27
Section 406. Compensation and Reimbursement . . . . . . . . . 28
Section 407. Disqualification; Conflicting Interests . . . . . 28
Section 408. Corporate Trustee Required; Eligibility . . . . . 28
Section 409. Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . . . 29
Section 410. Acceptance of Appointment by Successor . . . . . 30
Section 411. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . 31
Section 412. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . 31
ARTICLE FIVE
Holders' Lists and Reports by
Trustee and Company
Section 501. Company to Furnish Trustee Name and
Addresses of Holders . . . . . . . . . . . . . 31
Section 502. Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . . . 32
Section 503. Reports by Trustee . . . . . . . . . . . . . . . 32
Section 504. Reports by Company . . . . . . . . . . . . . . . 33
ARTICLE SIX
Amendments
Section 601. Amendments without Consent of Holders . . . . . . 34
Section 602. Amendments with Consent of Holders . . . . . . . 35
Section 603. Execution of Amendments . . . . . . . . . . . . . 36
Section 604. Effect of Amendments . . . . . . . . . . . . . . 37
Section 605. Conformity with Trust Indenture Act . . . . . . . 37
Section 606. Reference in Securities to Amendments . . . . . . 37
ARTICLE SEVEN
Covenants
Section 701. Payment of Amounts, if any, to Holders . . . . . 37
Section 702. Maintenance of Office or Agency . . . . . . . . . 37
Section 703. Money for Security Payments to Be
Held in Trust . . . . . . . . . . . . . . . . . 38
Section 704. Reasonable Diligence . . . . . . . . . . . . . . 39
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ARTICLE EIGHT
Remedies of the Trustee and Holders
on Event of Default
Section 801. Event of Default Defined; Waiver of
Default . . . . . . . . . . . . . . . . . . . . 39
Section 802. Collection of Indebtedness by Trustee;
Trustee May Prove Debt . . . . . . . . . . . . 40
Section 803. Application of Proceeds . . . . . . . . . . . . . 43
Section 804. Suits for Enforcement . . . . . . . . . . . . . . 43
Section 805. Restoration of Rights on Abandonment
of Proceedings . . . . . . . . . . . . . . . . 44
Section 806. Limitations on Suits by Holders . . . . . . . . . 44
Section 807. Unconditional Right of Holders to
Institute Certain Suits . . . . . . . . . . . . 44
Section 808. Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default . . . . . . . 45
Section 809. Control by Holders . . . . . . . . . . . . . . . 45
Section 810. Waiver of Past Defaults . . . . . . . . . . . . . 46
Section 811. Trustee to Give Notice of Default, But
May Withhold in Certain Circumstances . . . . . 46
Section 812. Right of Court to Require Filing of
Undertaking to Pay Costs . . . . . . . . . . . 46
ARTICLE NINE
Consolidation, Merger, Sale or Conveyance
Section 901. Company May Consolidate, etc., on
Certain Terms . . . . . . . . . . . . . . . . . 47
Section 902. Successor Corporation Substituted . . . . . . . . 47
Section 903. Opinion of Counsel to Trustee . . . . . . . . . . 48
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Reconciliation and tie between Trust Indenture Act of 1939 and
Participation Rights Agreement, dated as of December __, 1995 (the
"Agreement")
Trust Indenture Act Section Agreement Section
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Section 310(a)(1) . . . . . . . . . . . . . . . . . . 408
(a)(2) . . . . . . . . . . . . . . . . . . 408
(a)(3) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5) . . . . . . . . . . . . . . . . . . 408
(b) . . . . . . . . . . . . . . . . . . . . 407, 409
Section 311(a) . . . . . . . . . . . . . . . . . . . . 412
(b) . . . . . . . . . . . . . . . . . . . . 412
(b)(2) . . . . . . . . . . . . . . . . . . 503(a)
Section 312(a) . . . . . . . . . . . . . . . . . . . . 501, 502(a)
(b) . . . . . . . . . . . . . . . . . . . . 502(b)
(c) . . . . . . . . . . . . . . . . . . . . 502(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . 503(a)
(b) . . . . . . . . . . . . . . . . . . . . 503(b)
(c) . . . . . . . . . . . . . . . . . . . . 503(a)
(d) . . . . . . . . . . . . . . . . . . . . 503(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . 401(a),(b)
(b) . . . . . . . . . . . . . . . . . . . . 811, 503(a)
(c) . . . . . . . . . . . . . . . . . . . . 401(a)
(d) . . . . . . . . . . . . . . . . . . . . 401(c)
(d)(1) . . . . . . . . . . . . . . . . . . 401(a),(b)
(d)(2) . . . . . . . . . . . . . . . . . . 401(c)(2)
(d)(3) . . . . . . . . . . . . . . . . . . 401(c)(4)
(e) . . . . . . . . . . . . . . . . . . . . 812
Section 316(a) . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . 809
(a)(1)(B) . . . . . . . . . . . . . . . . . 810
(a)(2) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . 807
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . 802
(a)(2) . . . . . . . . . . . . . . . . . . 802
(b) . . . . . . . . . . . . . . . . . . . . 703
Section 318(a) . . . . . . . . . . . . . . . . . . . . 107
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Note: This reconciliation and tie shall not for any purpose be deemed to be a
part of the Agreement.
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AGREEMENT, dated as of December __, 1995, between SCHERING-PLOUGH
CORPORATION, a New Jersey corporation (hereinafter called the "Company"), and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) as trustee (hereinafter called
the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the creation of an issue of
participation rights (hereinafter called the "Securities" or "PRs"), 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, the Company proposes to issue to each holder of common stock,
par value $0.01 per share ("Canji Common Stock"), of Canji, Inc., a Delaware
corporation ("Canji"), and each holder of preferred stock, par value $0.01 per
share ("Canji Preferred Stock," and together with Canji Common Stock, "Canji
Capital Stock"), of Canji one Security for each share of Canji Capital Stock
pursuant to the Agreement and Plan of Merger, dated as of December 8, 1995 (the
"Merger Agreement"), by and among Canji, the Company and Canji Merger Corp., a
Delaware corporation and a wholly owned subsidiary of the Company ("Subcorp"),
providing for the merger (the "Merger") of Subcorp with and into Canji;
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, 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 mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
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(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, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted at
the time of any computation;
(c) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the 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.
"Act" when used with respect to any Holder has the meaning specified in
Section 104.
"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 or cause the direction of 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.
"Board of Directors" means either 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 ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
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▇▇▇▇, ▇▇▇ ▇▇▇▇ are not authorized or obligated by law or executive order to
close and, if the PRs are listed on a national securities exchange, such
exchange is open for trading.
"Combination Factor" means, on a country-by-country basis, a fraction,
the numerator and denominator of which shall be determined as follows:
(i) The numerator of the Combination Factor shall be the seller's price
of an equivalent unit price for the active ingredient which includes the
p53 Gene, and the denominator of the Combination Factor shall be the sum of
the numerator and the seller's price for an equivalent unit price of each
additional active ingredient contained therein.
(ii) If the numerator and denominator of the Combination Factor cannot
be determined in the manner set forth in clause (i) above, then the
numerator of the Combination Factor shall be the cost to seller of the
active ingredient which contains the p53 Gene, and the denominator shall be
the cost to seller of all active ingredients as customarily and
consistently applied by seller.
(iii) In no event shall the Combination Factor be less than fifty
percent (50%).
"Combination Product" means any product which utilizes a Product which
contains the p53 Gene as an active ingredient plus also utilizes other active
ingredients.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person 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 the Trust Indenture Act Sections
310 through 317 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
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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 for each Contingent Payment Period the
amount payable with respect to each PR equal to the product of (x) the quotient
obtained by dividing (I) one by (II) _______________ and (y) (I) the product of
(A) the contingent payment rate of 11% and (B) Net Sales for such Contingent
Payment Period reduced by (II) the Deductible Amount.
"Contingent Payment Date" means with respect to each Contingent Payment
Period the date 60 days following the end of such Contingent Payment Period.
"Contingent Payment Periods" shall be the periods of three calendar
months ended March 31, June 30, September 30 and December 31 of each calendar
year.
"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 Chase Trust Services, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Deductible Amount" shall be, with respect to each Contingent Payment
Period, the aggregate of (1), (2), (3) and (4) below:
(1) All royalties owing from the Company or any of its Affiliates to
any of the Original Owners under any of the Original Agreements accrued or paid
during the respective Contingent Payment Period.
(2) If there is a net reduction in the royalty rates payable by the
Company or any of its Affiliates to the Original Owners as a group, because
of future amendments to the Original Agreements, then half of any such
reduction shall be reflected as a reduction in the future contingent payment
rate payable by the Company hereunder; provided, however, in no event shall
this reduction cause such contingent payment rate to be lower than 8%.
(3) (A) If it is ultimately determined (by final judgment, or by good
faith negotiations which also involve the Trustee) (i) that the Products based
upon Product Patent Rights do in fact infringe on a third party's patent rights,
and (ii) that the Company cannot reasonably make, use or sell said
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Products without infringing on the third party's patent rights, and (iii)
that the Company becomes obligated to pay a royalty to such third party,
then one-half of any such royalty payable to such third party, provided,
however, in no event shall the reduction provided for in this clause (A)
cause the contingent payment rate to be lower than 1% of Net Sales with
respect to such Products, and (B) on a country-by-country basis, and a
Product-by-Product basis, one-half of any reasonable out-of-pocket expense
of defense against any third party's claim of a Product's infringement of
such third party's patent rights, which are reasonably documented, as such
expenses are incurred shall be deducted from the Contingent Payment.
(4) All royalties, other than royalties for which a reduction is made
pursuant to paragraph (1) above, owing from the Company or any of its
Affiliates to any third party with respect to any Product(s) as a result of
any arrangement, agreement or understanding between Canji, Inc. and such
third party which is in effect as of the effective time of the Merger shall
be deducted from the Contingent Payment.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Field" means for prophylactic or therapeutic medical care or treatment
of any disease or condition in humans or animals. Expressly excluded from the
Field are (i) all diagnostic uses or products, and (ii) all research reagents or
research products.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Net Sales" means for any Contingent Payment Period the gross amount
invoiced by the Company, the Company's Affiliates and their sublicensees on
sales of all Products the respective Terms of which have commenced and have not
expired as of the time of determination net of returns and rejections, less all
actual amounts which are included on said invoice or identified in other
documentation for (i) allowances for normal and customary quantity and cash
discounts which reduce the customer's invoice obligation, (ii) rebates including
government mandated rebates which reduce the customer's invoice obligation,
(iii) transportation costs and insurance while in transit which is actually paid
by the Company or its Affiliates or sublicensees, and (iv) any sales or similar
taxes, packaging charges, freight and insurance. For the purposes of
determining Net Sales, a sale shall be deemed to have occurred when an
invoice therefor shall be generated, the Product shipped for
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delivery, or payment therefor is received, whichever shall occur first. Sales
to any Affiliate of the Company shall be excluded until the subsequent sale
by any such Affiliate to a non-Affiliate, which shall then be included
hereunder in the determination of Net Sales. Notwithstanding the foregoing,
Net Sales with respect to any Combination Product shall be equal to Net
Sales with respect thereto, as calculated above, multiplied by the Combination
Factor.
"Officers' Certificate" 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, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Original Agreements" mean (i) the License Agreement, dated August 10,
1990, with the University of California, as licensor, and Canji, Inc., as
licensee; (ii) the Patent License and Option Agreement, dated December 11, 1992,
with the University of Texas, as licensor, and Canji, Inc., as licensee; and
(iii) the Assignment Agreement, dated April 22, 1993, with Research Development
Foundation, as assignor, and Canji, Inc. as assignee.
"Original Owners" mean the licensors and assignor under the Original
Agreements.
"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; and
(b) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Agreement, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands the Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
Outstanding Securities have given any request, demand, direction, consent or
waiver hereunder, Securities owned by the Company or any other obligor upon the
Securities
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or any Affiliate of the Company or such other obligor 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.
"p53 Gene" means the p53 gene sequence as published in Science
250:1576-1580, 1990, entitled "Genetic Mechanisms of Tumor Suppression by the
Human p53 Gene", authored by Phang-Tanz Chen, et al., and any p53 gene fragment,
derivative or analog, or combination of p53 fragments, natural or synthetic or
by recombinant DNA technology and any p53 gene product (as is customarily
scientifically understood e.g., a p53 protein or transcript), and p53 gene
product fragment, derivative or analog, or mimetic or combination of p53 product
fragments, natural or synthetic or by recombinant DNA technology.
"p53 Gene Technology" means any and all technology owned or controlled
in whole or part by Canji, Inc. or its Affiliates as of the effective time of
the Merger by license, assignment or otherwise involving the p53 Gene, together
with any vectors owned or controlled by Canji, Inc. in whole or in part by
license, assignment or otherwise useful with the p53 Gene.
"Participation Certificate" means a certificate representing any of
the PRs.
"Paying Agent" means any Person authorized by the Company to pay the
amount determined pursuant to Section 301, if any, on any Securities on behalf
of the Company.
"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.
"Product" means any pharmaceutical product, device, biological
material, method or process derived from the p53 Gene Technology, and which
includes the p53 Gene as an active ingredient or a material element of an active
ingredient, for use in the Field.
"Product Patent Rights" means (i) the patents or patent applications
listed on Exhibit A to this Agreement, (ii) all existing and future patents
and patent applications owned or controlled in whole or part by license,
assignment or otherwise by Canji, Inc. or Canji, Inc.'s Affiliates which
claim or
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relate to the p53 Gene, the p53 Gene Technology or making, using and selling
Products in the Field, and (iii) any divisions, continuations, continuations-
in-part, reissues, reexaminations, extensions or other governmental actions
which extend any subject matter of a patent, and any substitutions,
confirmations, registrations, revalidations or additions of any of the
foregoing that were in existence as of the effective time of the Merger.
"Record Date" means for the Contingent Payment payable on any
Contingent Payment Date on the PRs, the date specified for that purpose as
contemplated by Section 301, which date shall be the fifteenth day prior to such
Contingent Payment Date whether or not such day shall be a Business Day.
"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.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Subsidiary" means each Person more than 50% of the outstanding Voting
Stock of which is owned, directly or indirectly, by the Company or one or more
Subsidiaries, or by the Company and one or more other Subsidiaries.
"Term" with respect to any Product means, on a country-by-country
basis, (i) for a Product utilizing Product Patent Rights, the period commencing
on the date of this Agreement and ending on the last to expire (and/or to be
declared invalid in a proceeding from which no appeal is or can be taken) of
Product Patent Rights utilized by or in such Product in each such country and
(ii) for a Product not utilizing Product Patent Rights, the twelve-year period
commencing on the date of first commercial sale of the initial Product in such
country.
"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.
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"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 Stock" means stock 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 102. Compliance Certificates 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 all conditions precedent, if
any, provided for in this Agreement (including any covenants compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating 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 has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
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Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, 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, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
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, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous. 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.
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Section 104. 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 401) 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 10 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 501 of this Agreement prior to such solicitation. If a record date is
fixed, those Persons who were Holders of securities at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
take such action by vote or consent or, except with respect to clause (d) below,
to revoke any vote or consent previously given, whether or not such Persons
continue to be Holders after such record date. No such vote or consent shall be
valid or effective for more than 120 days after such record date.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) At any time prior to (but not after) the evidencing to the Trustee,
as provided in this Section 104, 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
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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 104, 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 105. 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, Attention: [ ];
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: [____________], or at any other address previously
furnished in writing to the Trustee by the Company.
Section 106. 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
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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 107. 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 108. 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 109. 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 110. 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 the sole
benefit of the parties hereto and their successors and of the Holders.
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Section 111. Governing Law.
This Agreement and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
Section 112. Legal Holidays.
In the event that any date on which any payment in respect of any
Security is due 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 on the next succeeding Business
Day with the same force and effect as if made on the date due.
Section 113. Separability Clause.
In case any provision in this Agreement or in the PRs 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.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
The Participation Certificates and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article,
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 officers executing such Participation Certificates, as
evidenced by their execution of the Participation Certificates. Any portion of
the text of any Participation Certificate may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Participation
Certificate.
The definitive Participation Certificates shall be 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
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exchange on which the Securities may be listed, all as determined by the
officers executing the Participation Certificates representing such Securities,
as evidenced by their execution of such Participation Certificates.
Section 202. Form of Face of Participation Certificates.
SCHERING-PLOUGH CORPORATION
PARTICIPATION RIGHTS
No. Certificate for Participation Rights
This certifies that , or registered assigns (the
"Holder"), is the registered holder of the number of Participation Rights
("PRs") set forth above. Each PR entitles the Holder, subject to the provisions
contained herein and in the Agreement referred to on the reverse hereof, to
payment from Schering-Plough Corporation, a New Jersey corporation (the
"Company"), with respect to any Contingent Payment Period ending on or after the
date of this Participation Certificate, Contingent Payments at the times and in
the amounts specified in Section 301 of the Agreement.
Payment of said Contingent Payments shall be made, net of any
applicable withholding taxes, at the offices or agencies of the Company
maintained for that purpose in The City of New York, New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts, provided, that such payments
shall be made, unless the Trustee shall agree otherwise, by check mailed to the
address of the person entitled thereto as such address shall appear on the
Securities Register of the Company. The Chase Manhattan Bank (National
Association) has been appointed as paying agent in The City of New York,
New York.
Reference is hereby made to the further provisions of the PRs 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 or on behalf of the Trustee referred to on the reverse hereof by manual
signature, the PRs represented by this Participation Certificate shall not be
entitled to any benefit under the Agreement, or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this in strument to be duly
executed under its corporate seal.
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Dated: SCHERING-PLOUGH CORPORATION
By_____________________________
Attest:
__________________________ [SEAL]
Authorized Signature
Section 203. Form of Reverse of Security.
This Participation Certificate is issued under and in accordance with
the Participation Rights Agreement, dated as of December , 1995 (the
"Agreement"), between the Company and The Chase Manhattan Bank (National
Association), as trustee (the "Trustee", which term includes any successor
Trustee under the Agreement), and is subject to the terms and provisions
contained in the Agreement, to all of which terms and provisions the Holder of
this Participation 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 PRs.
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 under the Agreement at any time by the
Company and the Trustee with the consent of the holders of a majority of the PRs
at the time Outstanding.
No reference herein to the Agreement and no provision of the PRs or of
the Agreement shall alter or impair the obligation of the Company, which is
absolute and unconditional, to make the Contingent Payments on the PRs at the
times and in the amounts and in the coin or currency prescribed in the
Agreement; provided, however, that all such payments will be made net of any
applicable withholding taxes.
The PRs are issuable only in registered form, and Participation
Certificates representing any integral number of PRs may be issued. As provided
in the Agreement and subject to certain limitations therein set forth, the
transfer of the PRs
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represented by this Participation Certificate is registrable on the Security
Register of the Company, upon surrender of this Participation Certificate for
registration of transfer at the office or agency of the Company maintained for
such purpose in The City of New York, 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 Participation
Certificates, for the same number of PRs, will be issued to the designated
transferee or transferees. The Company hereby designates the office of The
Chase Manhattan Bank (National Association) as the office for registration of
transfer of this Participation Certificate.
As provided in the Agreement and subject to certain limitations therein
set forth, this Participation Certificate is exchangeable for one or more
Participation Certificates representing the same number of PRs as represented by
this Participation Certificate as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of PRs, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this Participation 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 Participation
Certificate is registered as the owner hereof for all purposes, subject to the
provisions set forth in the Agreement relating to a record date for the payment
of Contingent Payments, and neither the Company, the Trustee nor any agent shall
be affected by notice to the contrary.
All capitalized terms used in this Participation Certificate without
definition shall have the meanings assigned to them in the Agreement.
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Section 204. Form of Trustee's Certificate of Authentication.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Participation Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Trustee
By_____________________________________
Authorized Officer
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ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
(a) The aggregate number of Participation Certificates which may be
authenticated and delivered under this Agreement is limited to the number equal
to the number of PRs issued by the Company in the Merger pursuant to the Merger
Agreement, except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 304, 305, 306 or 606.
(b) The Securities shall be known and designated as the "Participation
Rights" of the Company.
(c) Each Person who is the Holder of a PR at the close of business on
any Record Date will be entitled to receive in respect of each PR held, on the
Contingent Payment Date, the Contingent Payment with respect to the Contingent
Payment Period last preceding such Record Date determined by the Company
pursuant to this Agreement. Such determinations by the Company absent manifest
error shall be final and binding on the Company and the Holders.
(d) Contingent Payments on each PR shall be calculated to the nearest
cent, with one-half cent rounded for such purpose to the next greater whole
number. No Contingent Payment shall be due or payable for any Contingent Payment
Period for which the Contingent Payment would be less than $0.05 per PR, but any
such unpaid amount shall be cumulated and paid in the next succeeding Contingent
Payment Period for which Contingent Payments, when added to all such previously
unpaid amounts, would be $0.05 per PR or more.
(e) Notwithstanding any provision of this Agreement or the
Participation Certificates to the contrary, other than as expressly provided
under this Agreement, no interest shall accrue on any amounts payable on the PRs
to any Holder.
Section 302. Registrable Form.
The Securities shall be issuable only in registered form.
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Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
chairman of the Board of Directors or any vice chairman of the Board of
Directors or its president or any vice president or its treasurer, under its
corporate seal which may, 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 any time 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 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.
The Person in whose name any Security is registered at the close of
business on any Record Date with respect to any Contingent Payment shall be
entitled to receive such Contingent Payment notwithstanding the cancellation of
the Participation Certificate representing such Security upon any registration
of transfer of such Security or exchange of such Participation Certificate
subsequent to such Record Date and prior to the date on which such Contingent
Payment is required to be paid; provided, however, that if and to the extent the
Company shall default in the payment of such Contingent Payment, such defaulted
Contingent Payment shall be paid to the Persons in whose names Outstanding
Securities are registered at the close
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of business on the record date fixed by the Company for the payment of such
defaulted Contingent Payment.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, substantially of the tenor of the definitive Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine with the concurrence of the Trustee. Temporary
Securities may contain such reference to any provisions of this Agreement as may
be appropriate. Every temporary Security shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 702,
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 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 702 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.
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Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 702, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Participation
Certificates representing the same aggregate number of PRs represented by the
Participation 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 Participation Certificates represented
by such Participation Certificate that are not to be transferred.
At the option of the Holder, Participation Certificates may be
exchanged for other Participation Certificates that represent in the aggregate
the same number of PRs as the Participation Certificates surrendered at such
office or agency. Whenever any Participation Certificates are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Participation 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
right, and entitled to the same benefits under this Agreement, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304 or 606 not involving any transfer.
Section 306. 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
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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 its written request 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
Participation Certificate of like tenor and amount of PRs, bearing a number not
contemporaneously outstanding.
Upon the issuance of any new Securities under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Agreement equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payments Under Participation Certificate.
Payment of Contingent Payments on the PRs shall be made, net of any
applicable withholding taxes, at the offices or agencies of the Company
maintained for that purpose in The City of New York, New York, 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, that such payments shall be made,
unless the Trustee shall agree otherwise, by check mailed to the address of the
Holders entitled thereto by first-class mail as such address shall appear on the
Securities Register. The Chase Manhattan Bank (National Association) has been
appointed as paying agent in The City of New York, New York.
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Section 308. 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 any such payment 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 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled 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 cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Agreement. All cancelled Securities held
by the Trustee shall be disposed of as directed by a Company Order.
ARTICLE FOUR
THE TRUSTEE
Section 401. Certain Duties and Responsibilities.
(a) With respect to the Holders of Securities issued hereunder, 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. 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. Further, with respect to the Company's obligations under
Section 704 (Reasonable Diligence) and Section 505 (Reports by Company
Regarding Commercialization Efforts), the Trustee shall make such inquiries and
obtain such evidence as a prudent business person would do under the
circumstances in order to monitor and verify the Company's proper performance
of the Company's obligations pursuant to said Sections 704 and 505.
(b) In the absence of bad faith on its part, prior to the occurrence of
an Event of Default and after the curing
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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
(1) this Subsection (c) shall not be construed to limit the effect of
Subsections (a) and (b) of this Section;
(2) 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;
(3) 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
(4) 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 809 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.
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Section 402. Certain Rights of Trustee.
Subject to the provisions of Section 401:
(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;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(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;
(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) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
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notice, request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper ordocument unless requested in
writing to do so by the Holders of not less than a majority of the
Securities then Outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation shall be
paid by the Company or, if paid by the Trustee or any predecessor Trustee,
shall be repaid by the Company upon demand; and
(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.
Section 403. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Agreement or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
Section 404. 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 407 and 412, 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 405. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder.
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Section 406. 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 its negligence or bad
faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, 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.
Section 407. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any conflicting interest within the
meaning of the Trust Indenture Act, it shall, within 90 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.
Section 408. 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 $50,000,000. 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
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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 409. 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 410.
(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 30 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 407 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 408 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee
or (ii) the Holder of any Security who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
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(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 such resignation, removal or incapability, or the
occurrence of such vacancy, 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 410, 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 so accepted appointment, 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 410. Acceptance of Appointment by 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, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
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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 411. 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 412. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or shall become a creditor, directly
or indirectly, secured or unsecured, 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 FIVE
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 501. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee (a)
semiannually, not later than [May 1] and [November 1], a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders as
of
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[April 15] and [October 15], respectively, and (b) at such times as the Trustee
may request in writing, within 30 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 15 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 502. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 501 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 501 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 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 503. Reports by Trustee.
(a) Within 60 days after [May 15] of each year commencing with the
first [May 15] after the first issuance of Securities, 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 upon which the
Securities are listed, with the Commission and also with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
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Section 504. Reports by Company.
The Company shall:
(a) file with the Trustee, within 15 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; or,
if the Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee
and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may 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;
(b) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Agreement as may be
required from time to time by such rules and regulations;
(c) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 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 Subsections (a) and (b) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission;
(d) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Agreement
(for purpose of this paragraph, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Agreement); and
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(e) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, at periodic intervals, but no less
frequently than annually, a report summarizing the present status of the
Company's p53 gene research and development and of Product production, and
describing any significant developments relating to the p53 gene project
which have occurred since the date of the last such report; provided,
however, that no such report shall contain any information that has not
been disclosed to shareholders of the Company generally.
ARTICLE SIX
AMENDMENTS
Section 601. Amendments Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more amendments hereto, in form satisfactory to the Trustee, 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
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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
rights of the Holders of a majority of the Outstanding Securities to
waive such an Event of Default;
(d) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Agreement; provided that in each case, such
provisions shall not adversely affect the interests of the Holders; or
(e) to make any amendments or changes necessary to comply or maintain
compliance with the Trust Indenture Act.
Promptly following any amendment of this Agreement or the Securities in
accordance with this Section 601, 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 602. 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
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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 Contingent Payment Period, Contingent
Payment, Contingent Payment Date, Deductible Amount, Net Sales, Term,
Product, Product Patent Rights or otherwise reduce the amounts payable in
respect of the Securities;
(b) reduce the amount of the Outstanding Securities, the consent of
whose Holders is required for any such amendment; or
(c) modify any of the provisions of this Section or Section 810, except
to increase any such percentage or to provide that certain other provisions
of this Agreement cannot be modified or waived without the consent of the
Holder of each Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
amendment pursuant to the provisions of this Section, 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 603. Execution of Amendments.
In executing any amendment permitted by this Article, the Trustee shall
be entitled to receive, and (subject to Section 401) 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 may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement or otherwise.
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Section 604. Effect of Amendments.
Upon the execution of any amendment under this Article, this Agreement
and the Securities shall be modified in accordance therewith, and such amendment
shall form a part of this Agreement and the Securities for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 605. Conformity with Trust Indenture Act.
Every amendment executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
Section 606. 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 SEVEN
COVENANTS
Section 701. 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.
Section 702. Maintenance of Office or Agency.
As long as any of the Securities remain Outstanding, the Company will
maintain in The City of New York, New York, an office or agency (i) where
Securities may be surrendered for registration of transfer or exchange and (ii)
where notices and demands to or upon the Company in respect of the Securities
and this Agreement may be served. The Company hereby designates the office of
The Chase Manhattan Bank (National Association) as such office
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or agency of the Company, unless the Company shall designate and maintain some
other office or agency for one or more of such purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York, 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 City of New York, 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. The Company also designates the Corporate Trust Office as one of such
offices.
Section 703. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of any amount due on any of the PRs, 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 each due date of any amount due on any of the
PRs, 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 (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 such amount has become due and payable, 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 704. Reasonable Diligence.
The Company shall use commercially reasonable, diligent and good faith
efforts to bring Products to market, and to make sales of such Products at
commercially reasonable volumes taking into due account applicable
considerations, if any, arising with respect to possible claims by any third
party alleging infringement of such third party's patent rights by Products sold
by the Company. Said reasonable diligence shall be at least up to the level of
efforts that the Company devotes to the commercialization of its other products
of similar market value and therapeutic and developmental status. Without
limiting the generality of the foregoing, the Company and its Affiliates and
sublicensees will not develop, manufacture or market any pharmaceutical,
therapeutic or prophylactic product for use in humans or animals utilizing the
p53 Gene, unless the same is done as a Product pursuant to this Agreement and
treated as such for all purposes hereunder, including for purposes of
calculating Net Sales[; provided, however, in no event shall the contingent
payment rate with respect to such a product be greater than 6% if Net Sales
with respect to such product are less than $10 million or be greater than 5% if
Net Sales with respect to such product are greater than $10 million]. To the
extent any such pharmaceutical, therapeutic or prophylactic product is done
or treated as a Product as provided in the preceding sentence, although
such product would not otherwise be a Product as defined herein but for this
paragraph, all royalties owing from the Company or any of its Affiliates to
any third party related to any such product accrued or paid during any
Contingent Payment Period shall be included in and treated as part of the
Deductible Amount.
ARTICLE EIGHT
REMEDIES OF THE TRUSTEE AND HOLDERS
ON EVENT OF DEFAULT
Section 801. Event of Default Defined; Waiver of Default.
"Event of Default" with respect to Securities, means any of the
following events which shall have occurred and be continuing (whatever the
reason for such Event of
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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 any Contingent Payment when the same
shall become due and payable, and continuance of such default for a period
of 30 days; or
(b) default in the performance, or breach, of any covenant of the
Company in this Agreement (other than a covenant or 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 90 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
25% 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 60 consecutive days; or
(d) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee or sequestrator or
similar official, of the Company or for any substantial part of its
property, or make any general assignment for the benefit of creditors.
Section 802. Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Company covenants that in case default shall be made in the payment of
any Contingent Payment when and as the same shall have become due and payable
and such default continues for the period of 30 days, 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 then
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due and payable; 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.
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
any 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 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, 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
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relative to the Company or other obligor upon the Securities, or to the
creditors or property of the Company or such other obligor;
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings; and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Holders to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making
of payments directly to the Holders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or
bad faith and all other amounts due to the Trustee or any predecessor
Trustee pursuant to Section 406.
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 relative thereto, and any such action or 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.
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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 803. Application of Proceeds. Any moneys 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 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 negligence or
bad faith, and all other amounts due to the Trustee or any predecessor
Trustee pursuant to Section 406;
SECOND: To the payment of Contingent Payments on the Securities, in the
order of such Contingent Payments, and in case such moneys 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
THIRD: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.
Section 804. 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 and 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.
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Section 805. Restoration of Rights on Abandonment of Proceedings. In
case the Trustee or 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 Holder
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 806. 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
25% of the Securities then Outstanding shall have made written request upon the
Trustee to institute such action or proceedings in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 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 809; 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 807. 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
Contingent
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Payments payable in respect of such Security on or after the respective
Contingent Payment Dates, or to institute suit for the enforcement of any such
payment on or after such respective Contingent Payment Dates, shall not be
impaired or affected without the consent of such Holder.
Section 808. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 806, 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 806, 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 809. 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 401) the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, shall determine that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith by its board
of directors, the executive committee, or a trust committee of directors or
responsible officers of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or if
the Trustee in good faith shall so determine that the actions or forebearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities not joining in the giving of said
direction, it being understood that the Trustee
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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 810. Waiver of Past Defaults. In the case of a default or an
Event of Default specified in clause (b), (c) or (d) of Section 801, 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 811. 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, such notice to be transmitted within 90 days
after the occurrence thereof, unless such defaults shall have been cured before
the giving of such notice (the term "default" or "defaults" for the purposes of
this Section being hereby defined to mean any event or condition which is, or
with notice or lapse of time or both would become, an Event of Default);
provided that, except in the case of default in the payment of the amounts
payable in respect of any of the Securities, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
Section 812. Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Agreement agree,
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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 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
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith or 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 10% 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 NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 901. 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) either the Company shall be the continuing corporation, or the
successor corporation or the Person which acquires by sale or conveyance
substantially all the assets of the Company (if other than the Company) shall be
a Person organized under the laws of the United States of America or any State
thereof and shall expressly assume 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, by supplemental agreement satisfactory to
the Trustee, executed and delivered to the Trustee by such corporation, and (ii)
the Company or such successor corporation, 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 902. Successor Corporation Substituted. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein. Such successor corporation 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
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Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company 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, lease 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 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 903. Opinion of Counsel to Trustee. The Trustee may receive an
opinion of Counsel, prepared in accordance with Sections 103 and 104, as
conclusive evidence that any such consolidation, merger, sale, lease or
conveyance, and any such assumption, and any such liquidation or dissolution,
complies with the applicable provisions of this Agreement.
* * * * *
This Agreement may 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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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
SCHERING-PLOUGH CORPORATION
By_________________________
Title:
Attest:____________________
Title:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By_________________________
Title:
Attest:____________________
Title:
49
56
STATE OF )
: ss.:
COUNTY OF )
On the day of , 1995, before me personally
came , to me known, who, being by me duly sworn,
did depose and say that s/he resides at
; that s/he is of ,
one of the corporations described in and which executed the above instrument;
that s/he knows the corporate seal of such corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed pursuant to
authority of the Board of Directors of such corporation; and that s/he signed
her/his name thereto pursuant to like authority.
(NOTARIAL SEAL)
-------------------------
57
STATE OF )
: ss.:
COUNTY OF )
On the day of , 1995, before me personally came
, to me known, who, being by me duly sworn, did depose and
say that s/he resides at ; that s/he is
of , one of the corporations described in and which
executed the above instrument; that s/he knows the corporate seal of such
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed pursuant to authority of the Board of Directors of such
corporation; and that s/he signed her/his name thereto pursuant to like
authority.
(NOTARIAL SEAL)
-------------------------