As filed with the Securities and Exchange Commission on October 3, 1996
Registration No. 333-
___________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MEDIMMUNE, INC.
(Exact name of registrant as specified in its charter)
Delaware 54-1555759
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
(301) 417-0770
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
Wayne T. Hockmeyer, Ph.D.
Chairman and Chief Executive Officer
MedImmune, Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
(301) 417-0770
(Address, including zip code, and telephone number,
including area code, of agent for service)
_______________
Please send copies of all communications to:
Frederick W. Kanner, Esq.
Dewey Ballantine
1301 Avenue of the Americas
New York, New York 10019
(212) 259-8000
_______________
Approximate date of commencement of proposed sale to public: From time to
time after the effective date of the Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: ____
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. X
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ____
If this form is a post-effective amendment filed pursuant to Rule
462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ____
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. ____
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Each Amount to Maximum Maximum Amount of
Class of be Offering Aggregate Registration
Securities to Registered Price Offering Fee(2)
be Registered Per Unit(1) Price(1)
________________________________________________________________________
_
7% Convertible $60,000,000 100% $60,000,000 $20,690
Subordinated
Notes due 2003
Common Stock, 3,048,780(3) N/A N/A N/A
par value $.01
per share
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 457(i) there is no filing fee with respect to the
shares of Common Stock issuable upon conversion of the Notes because
no additional consideration will be received in connection with the
exercise of the conversion privilege.
(3) Plus such additional indeterminate number of shares as may become
issuable upon conversion of the Notes being registered hereunder by
means of adjustment of the conversion price.
_______________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the Registration Statement
becomes effective. This Prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation, or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED OCTOBER 3, 1996
PROSPECTUS
MEDIMMUNE, INC.
$60,000,000 Principal Amount of 7% Convertible
Subordinated Notes due 2003
(Interest payable January 1 and July 1)
3,048,780 Shares of Common Stock
_______________
This Prospectus relates to $60,000,000 aggregate principal amount of
7% Convertible Subordinated Notes due 2003 (the "Notes") of MedImmune,
Inc., a Delaware corporation ("MedImmune" or the "Company"), and (ii)
3,048,780 shares of common stock, par value $.01 per share (the "Common
Stock"), of the Company which are initially issuable upon conversion of the
Notes plus such additional indeterminate number of shares of Common Stock
as may become issuable upon conversion of the Notes as a result of
adjustments to the conversion price (the "Shares"). The Notes and the
Shares that are being registered hereby are to be offered for the account
of the holders thereof (the "Selling Securityholders'). The Notes were
initially acquired from the Company by Morgan Stanley & Co. Incorporated
(the "Initial Purchaser") in July 1996 in connection with a private
offering. See "Description of the Notes."
The Notes are convertible into Common Stock of the Company at any time
after October 6, 1996 and prior to maturity, unless previously redeemed, at
a conversion price of $19.68 per share, subject to adjustments in certain
events. On October 2, 1996, the closing price of the Common Stock on the
Nasdaq National Market was $14.25 per share. The Common Stock is traded
under the symbol "MEDI."
The Notes do not provide for a sinking fund. The Notes are redeemable
at the option of the Company, in whole or in part, at the redemption prices
set forth in this Prospectus, together with accrued interest, except that
no redemption may be made prior to July 7, 1999. Upon a Fundamental Change
(as defined herein), each holder of Notes shall have the right, at the
holder's option, to require the Company to redeem such holder's Notes at
declining redemption prices, subject to adjustments in certain events as
described herein, together with accrued interest. See "Description of
Notes B Optional Redemption by the Company" and "B Redemption at Option of
the Holder."
The Notes are unsecured obligations of the Company and are
subordinated to all present and future Senior Indebtedness (as defined
herein) of the Company and will be effectively subordinated to all
indebtedness and liabilities of subsidiaries of the Company. The Indenture
(as defined herein) does not restrict the incurrence of any other
indebtedness or liabilities by the Company or its subsidiaries. See
"Description of Notes B Subordination of Notes."
The Notes have been designated for trading in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market. For a
description of certain income tax consequences to holders of the Notes, see
"Certain Federal Income Tax Considerations." The Initial Purchaser has
advised the Company that it intends to make a market in the Notes. The
Initial Purchaser, however, is not obligated to do so and any such market
making may be discontinued at any time without notice, in the sole
discretion of the Initial Purchaser. No assurance can be given that any
market for the Notes will develop or be maintained.
The Notes and the Shares are being registered to permit public
secondary trading of the Notes and, upon conversion, the underlying Common
Stock, by the holders thereof from time to time after the date of this
Prospectus. The Company has agreed, among other things, to bear all
expenses (other than underwriting discounts and commissions and fees and
expenses of counsel and other advisors to the holders of the Notes or the
underlying Common Stock) in connection with the registration and sale of
the Notes and the underlying Common Stock covered by this Prospectus.
The Company will not receive any of the proceeds from sales of Notes
or the Shares by the Selling Securityholders. The Notes and the Shares may
be offered in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution." The Selling Securityholders may be deemed to be
"underwriters" as defined in the Securities Act of 1933, as amended (the
"Securities Act"). If any broker-dealers are used by the Selling
Securityholders, any commissions paid to broker-dealers and, if broker-
dealers purchase any Notes or Shares as principals, any profits received by
such broker-dealers on the resale of the Notes or Shares may be deemed to
be underwriting discounts or commissions under the Securities Act. In
addition, any profits realized by the Selling Securityholders may be deemed
to be underwriting commissions.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DESCRIPTION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is ___________, 1996
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-
3 under the Securities Act with respect to the Notes and the
Shares offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with
respect to the Company and the Notes and the Shares offered
hereby, reference is made to the Registration Statement and to
the exhibits and schedules filed therewith. Statements contained
in this Prospectus as to the contents of any contract or other
document are not necessarily complete and in each instance
reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. The
Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports, proxy statements and
other information with the Commission. Copies of such reports,
proxy statements, the Registration Statement and exhibits thereto
and other information may be inspected without charge at the
offices of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and copies of such documents may be
obtained from the Public Reference Section of the Commission at
its Washington, D.C. or regional offices upon the payment of the
fees prescribed by the Commission. The Commission maintains a
World Wide Web site on the Internet at http://www.sec.gov that
contains reports, proxy and information statements and other
information regarding registrants that file electronically with
the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, the Company's Quarterly Reports on Form
10-Q for the quarters ended March 31 and June 30, 1996 and the
Company's Reports on Form 8-K dated January 5, 19 and 26,
February 5, 6, 14, 15 and 29, April 18 and 25, June 6 and 20,
July 2 and 25 and August 12, 1996, filed with the Commission, are
hereby incorporated by reference in this Prospectus except as
superseded or modified herein. All documents filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the
termination of the offering being made hereby shall be deemed to
be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing of such documents. Any
statement contained in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except
as modified or superseded, to constitute a part of this
Prospectus. The Company will provide without charge to each
person, including any beneficial owner, to whom this Prospectus
is delivered, upon written or oral request of such person, a copy
of any and all of the documents that have been or may be
incorporated by reference herein (other than exhibits to such
documents which are not specifically incorporated by reference
into such documents). Such requests should be directed to
Investor Relations, MedImmune, Inc., 35 West Watkins Mill Road,
Gaithersburg, Maryland 20878, (301) 417-0770.
____________
CytoGam is a registered trademark and RespiGam is a trademark of
the Company.
2
THE COMPANY
MedImmune, Inc. ("MedImmune" or the "Company") is a
biotechnology company focused on developing and marketing
products for the prevention and treatment of infectious disease
and for use in transplantation medicine. The Company was
incorporated in Delaware in June 1987 under the name Molecular
Vaccines, Inc., commenced operations in April 1988 and in
October 1990 changed its name to MedImmune, Inc. The mailing
address of the Company's principal executive offices is 35 West
Watkins Mill Road, Gaithersburg, Maryland 20878, and its
telephone number at that address is (301) 417-0770.
RISK FACTORS
This Prospectus (including the documents incorporated by
reference herein) contains, in addition to historical
information, forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ
materially. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed
below, as well as those discussed elsewhere in this Prospectus
(including the documents incorporated by reference herein).
EARLY STAGE OF PRODUCT DEVELOPMENT
The Company's first product, CytoGam, has been marketed
since 1991, and on January 18, 1996, the Company's second
product, RespiGam, was licensed for marketing by the FDA. Sales
of CytoGam totalled $16.2 million in the year ended December 31,
1995 and $10.5 million for the six months ended June 30, 1996.
Sales of RespiGam commenced in late January 1996 and totaled
$3.0 million for the six months ended June 30, 1996. Gross
profits from these two products currently are not sufficient to
fund the Company's research and development programs,
expenditures for which totalled $26.4 million in the year ended
December 31, 1995 and $12.2 million in the six months ended
June 30, 1996. The Company's other product candidates are in
various stages of research, development or clinical testing, and
none can be sold commercially without first obtaining a license
for marketing from the FDA and, outside the United States, other
regulatory authorities. The process of obtaining such licenses
usually takes a number of years to complete and requires
significant expenditures of funds to conduct clinical trials of
the safety and efficacy of a potential product. Many potential
products fail to demonstrate sufficient safety or efficacy to
warrant licensing by the FDA or other regulatory authorities, and
there can be no assurance that any of the Company's potential
products will obtain the required approval or, if approved, will
obtain sufficient market acceptance to become commercially
successful.
RISKS ASSOCIATED WITH RESPIGAM
RespiGam was licensed for marketing by the FDA on
January 18, 1996. Accordingly, the Company has limited experience
in selling RespiGam and in manufacturing RespiGam in commercial
quantities. The Company expects to incur substantial costs in
connection with the full marketing launch of RespiGam in Fall
1996. The Company anticipates that, at least initially, total
costs may exceed product revenues. In addition, substantial
working capital may be required to fund inventories and
receivables associated with the commercialization of RespiGam.
There can be no assurance that RespiGam will achieve sufficient
market acceptance to become profitable.
In connection with the FDA's licensing of RespiGam for
marketing, the Company agreed to conduct a post-marketing (Phase
4) clinical trial of RespiGam. It is possible that adverse
developments, if any, in that trial could have a material adverse
effect on the Company.
3
RELIANCE ON THIRD PARTY MANUFACTURING; DEPENDENCE ON SUPPLIERS
The Company currently does not have facilities or staff
capable of manufacturing products in commercial quantities. The
Company has relied on contract manufacturing by third parties for
the production of CytoGam and RespiGam according to the Company's
specifications. The Company's manufacturing arrangements with the
Massachusetts Public Health Biologics Laboratories ("MPHBL") are
renegotiated annually, and there can be no assurance that any
modifications to such arrangements will be on terms favorable to
the Company. The product rights to CytoGam and RespiGam are
licensed to the Company by Massachusetts Health Research
Institute ("MHRI"). If MPHBL, which holds the sole product and
establishment licenses from the FDA for the manufacture of
CytoGam and RespiGam, or suppliers of raw material for the
manufacture of CytoGam or RespiGam, are unable to satisfy the
Company's requirements for CytoGam or RespiGam on a timely basis,
or if MPHBL is prevented for any reason from manufacturing
CytoGam or RespiGam, the Company will likely be unable to secure
alternative suppliers or manufacturers without undue and
materially adverse operational disruption. The Company has in the
past experienced product shortages for CytoGam, which have
limited product sales without producing a savings in sales and
marketing costs.
The Company relies on a limited number of suppliers to
provide substantially all of the plasma used as a raw material
for production of CytoGam and RespiGam. Any significant
interruption in the delivery of these products to the Company
could adversely affect the Company's business. Plasma suppliers
obtain their supply, in turn, from human donors who are limited
as to the amount and frequency of donations. Additionally, only a
small proportion of donated plasma is suitable for the production
of CytoGam or RespiGam. Should the supply of suitable plasma
donors decline, the Company's ability to produce and sell such
products could be adversely affected.
The Company expects to require additional manufacturing
capacity and currently intends to obtain this capacity by
constructing its own manufacturing facility. The Company is in
negotiations with MPHBL regarding transfer of production of
CytoGam and RespiGam to such a facility. There can be no
assurances that such negotiations will lead to an agreement. In
addition, construction of such a facility can take substantial
time to complete, and the Company could experience significant
product shortages during that period. The financing, construction
and operation of manufacturing facilities involve substantial
risks that can result in unexpected delays and costs. In
addition, manufacturing facilities and processes must undergo a
comprehensive review before the FDA will issue the establishment
and product licenses necessary to produce and market products
from such a facility. The Company has no prior experience in
operating manufacturing facilities or managing such risks. As a
result, there can be no assurance that the Company will be able
to manufacture CytoGam or RespiGam in commercial volume and on a
cost-effective basis.
HISTORY OF OPERATING LOSSES
The Company has incurred increasing operating losses over
the last four years and had a cumulative deficit of $78.4 million
at June 30, 1996. The Company expects its operating losses to
continue and, even if one or more of its products under
development is licensed for marketing by the FDA and achieves
substantial market acceptance, there can be no assurance that the
Company will achieve profitability. Furthermore, there can be no
assurance that such regulatory approval will be obtained.
RISK OF MANAGING GROWTH
The Company has substantially increased the size of its
sales and marketing staff in connection with the approval of
RespiGam, intends to engage in commercial manufacturing and
anticipates substantial growth in other areas of its business.
This potential rapid growth and expansion of scope of operations
presents a series of new risks to the Company's management which
could result in unanticipated costs, time delays or issues of
quality control, and could materially and adversely affect the
Company.
4
DEPENDENCE ON STRATEGIC ALLIANCES
The Company has entered into strategic alliances relating to
the marketing of RespiGam. Under these arrangements, the Company
is dependent upon its corporate partners to accomplish many of
the Company's sales and marketing goals. If those corporate
partners fail to devote sufficient effort and attention to
achieving those goals, the Company's revenues would be adversely
affected.
PATENTS AND PROPRIETARY TECHNOLOGY
Products currently being developed or considered for
development by the Company are in the area of biotechnology, an
area in which there are extensive patent filings. The patent
position of biotechnology firms generally is highly uncertain and
involves complex legal and factual questions. To date, no
consistent policy has emerged regarding the breadth of claims
allowed in biotechnology patents. Accordingly, there can be no
assurance that patent applications owned or licensed by the
Company will result in patents being issued or that, if issued,
such patents will afford protection against competitors with
similar technology. In addition, there can be no assurance that
products covered by such patents, or any other products developed
by the Company or subject to licenses acquired by the Company,
will not be covered by third party patents, in which case
continued development and marketing of such products would
require a license under such patents. There can be no assurance
that such required licenses will be available to the Company or
its licensees on acceptable terms.
The Company is aware of several patents and patent
applications which may affect the Company's ability to make, use
and sell the Company's products or product candidates, including
the following: (i) three United States patents, directed to
intravenous immune globulin containing high concentrations of
either CMV or RSV antibodies, which have been issued to a major
pharmaceutical company having substantially greater financial
resources than the Company and (ii) United States patents,
directed to mouse monoclonal antibodies against T-cells and the
use thereof, which have been issued to another major
pharmaceutical company having substantially greater financial
resources than the Company. Although the Company believes that
neither its CytoGam and RespiGam technologies, which use
intravenous immune globulins containing high concentrations of
CMV or RSV antibodies, respectively, nor its MEDI-500 and BTI-322
technologies, which use monoclonal antibodies against T-cells,
infringe any valid claims of such patents, the Company can
provide no assurances that if a legal action based on such
patents were brought against the Company, such an action would be
resolved in the Company's favor. If such a dispute were resolved
against the Company, in addition to potential damages, the
manufacturing and sale of such products could be enjoined unless
a license were obtained. There can be no assurances that, if a
license were required, such a license would be made available on
terms acceptable to the Company.
The Company believes that there are other patents issued to
third parties and/or patent applications filed by third parties
which could have applicability to each of the Company's products
and product candidates and could adversely affect the Company's
freedom to make, use or sell such products or use certain
processes for their manufacture. The Company is unable to predict
whether it will ultimately be necessary to seek a license from
such third parties or, if such a license were necessary, whether
such a license would be available on terms acceptable to the
Company. The necessity for such a license could have a material
adverse effect on the Company's business.
There has been substantial litigation regarding patent and
other intellectual property rights in the biotechnology industry.
Litigation may be necessary to enforce certain intellectual
property rights of the Company. Any such litigation could result
in substantial cost to and diversion of effort by the Company.
5
TECHNOLOGY AND COMPETITION
Biotechnology and pharmaceuticals are evolving fields in
which developments are expected to continue at a rapid pace. The
Company's success depends upon developing and maintaining a
competitive position in the development of products and
technologies in its areas of focus. Competition from other
biotechnology and pharmaceutical companies is intense. Many of
these companies have substantially greater research and
development capabilities, experience and marketing, financial and
managerial resources, and represent significant competition for
the Company. Acquisitions of competing biotechnology companies by
large pharmaceutical companies could enhance such competitors'
financial, marketing and other resources. There can be no
assurance that developments by others will not render the
Company's products or technologies noncompetitive or obsolete.
GOVERNMENT REGULATION
Substantially all of the Company's products require
regulatory approval by governmental agencies. In particular,
human therapeutic and vaccine products are subject to rigorous
preclinical and clinical testing for safety and efficacy and
approval processes by the FDA, as well as regulatory authorities
in foreign countries. The process of obtaining such approvals is
costly and time-consuming. There can be no assurance that
required approvals will be obtained. Any failure to obtain, or
delay in obtaining, such approvals could adversely affect the
ability of the Company or its collaborators to market products
successfully and to generate revenues from sales or royalties.
Any approved products are subject to continuing regulation,
and non-compliance with applicable requirements can result in
fines, recall or seizure of products, total or partial suspension
of production, refusal of the government to approve product
license applications, restrictions on the Company's ability to
enter into supply contracts and criminal prosecution. The FDA
also has the authority to revoke product licenses and
establishment licenses previously granted. Further, the
regulation of recombinant DNA technologies and the regulation of
manufacturing facilities by state, local and other authorities is
subject to change.
UNCERTAINTIES REGARDING HEALTH CARE REIMBURSEMENT AND REFORM
The Company's ability to commercialize products successfully
may depend in part on the extent to which reimbursement for the
costs of such products and related treatments will be available
from government health administration authorities, private health
insurers and other organizations. Significant uncertainty exists
as to the reimbursement status of newly approved health care
products, and there can be no assurance that adequate third-party
coverage will be available for the Company to maintain price
levels sufficient for realization of an appropriate return on its
investment in developing new products. Government and other
third-party payors are increasingly attempting to contain health
care costs by limiting both coverage and the level of
reimbursement for new products approved for marketing by the FDA,
and by refusing, in some cases, to provide any coverage for uses
of approved products for indications for which the FDA has not
granted marketing approval. Recent initiatives to reduce the
Federal deficit and to reform health care delivery are increasing
these cost containment efforts. As managed care organizations
continue to expand as a means of containing health care costs,
the Company believes there may be attempts by such organizations
to restrict use or delay authorization to use new products, such
as those being developed by the Company, pending completion of
cost/benefit analyses of such products by those managed care
organizations. If adequate coverage and reimbursement levels are
not provided by government and other third-party payors for uses
of the Company's products, the market acceptance of these
products would be adversely affected.
6
PRODUCT LIABILITY AND INSURANCE
The testing, marketing and sale of health care products
entails an inherent risk that product liability claims will be
asserted against the Company. A product liability claim or recall
could have a material adverse effect on the business or financial
condition of the Company. Blood products, such as the Company's,
involve heightened risks, including the risk of transmission of
blood-borne diseases. Consequently, there are substantial costs
associated with the handling of such products and with the
disposal of the related hazardous waste material. Although the
Company has obtained product liability insurance in an amount it
believes is adequate, there can be no assurance that the Company
will be able to maintain such insurance or that liability will
not exceed its insurance coverage.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends upon the continued
contributions of its executive officers and scientific and
technical personnel. Many key responsibilities within the Company
have been assigned to a relatively small number of individuals.
The competition for qualified personnel is intense, and the loss
of services of certain key personnel could adversely affect the
business of the Company. The Company does not maintain or intend
to purchase "key man" life insurance on any of its personnel.
POSSIBLE PRICE VOLATILITY OF NOTES AND COMMON STOCK
The market prices for securities of biotechnology companies
have been highly volatile. The announcement of technological
innovations or new commercial products by the Company or its
competitors, the impact of health care reform, developments
relating to regulatory matters or to patents or proprietary
rights, publicity regarding actual or potential medical results
with respect to products under development by the Company or
others as well as period-to-period variances in financial results
could cause the market price of the Notes and the Common Stock
into which the Notes are convertible to fluctuate substantially.
In addition, the stock market has experienced extreme price and
volume fluctuations that have particularly affected the market
price for many high technology companies and that have often been
unrelated to the operating performance of these companies. These
broad market fluctuations may adversely affect the market price
of the Notes and the Common Stock into which the Notes are
convertible.
SUBORDINATION
The Notes are unsecured and subordinated in right of payment
in full to all existing and future Senior Indebtedness of the
Company. As a result of such subordination, in the event of
bankruptcy, liquidation or reorganization of the Company or upon
acceleration of the Notes due to an event of default, the assets
of the Company will be available to pay obligations on the Notes
only after all Senior Indebtedness has been paid in full, and
there may not be sufficient assets remaining to pay amounts due
on any or all of the Notes then outstanding. The Notes will be
structurally subordinated to the liabilities, including trade
payables, of any subsidiary of the Company. The Indenture does
not prohibit or limit the incurrence of Senior Indebtedness or
the incurrence of other indebtedness and other liabilities by the
Company or any subsidiary of the Company, and the incurrence of
additional indebtedness and other liabilities by the Company or
any subsidiary of the Company could adversely affect the
Company's ability to pay its obligations on the Notes. As of
June 30, 1996, the Company had approximately $2.0 million of
Senior Indebtedness outstanding. The Company anticipates that
from time to time it will incur additional indebtedness,
including Senior Indebtedness, and that it will, and subsidiaries
of the Company may, from time to time incur other additional
indebtedness and liabilities.
LIMITATIONS ON REPURCHASE OF NOTES UPON FUNDAMENTAL CHANGE
In the event of a Fundamental Change, each holder of the
Notes will have the right, at the holder's option, to require the
Company to repurchase all or a portion of such holder's Notes.
The Company's ability to repurchase the Notes upon a Fundamental
Change may be limited by the terms of the Company's Senior
Indebtedness and the subordination provisions of the Indenture.
Further, the ability of the Company to repurchase the Notes upon
a Fundamental Change will be dependent on the availability of
sufficient funds and compliance with applicable securities laws.
Accordingly, there can be no assurance that the Company will be
able to repurchase the Notes upon a Fundamental Change. Failure
of the Company to repurchase Notes at the option of the holder
upon a Fundamental Change would result in an Event of Default (as
defined in the Indenture) under the Notes, which could in turn
result in acceleration of the payment of other indebtedness of
the Company at the time outstanding pursuant to cross-default
provisions.
The term "Fundamental Change" is limited to certain
specified transactions and may not include other events that
might adversely affect the financial condition of the Company,
nor would the requirement that the Company offer to repurchase
the Notes upon a Fundamental Change necessarily afford holders of
the Notes protection in the event of a highly leveraged
transaction, reorganization, merger or similar transaction
involving the Company.
ABSENCE OF PUBLIC MARKET FOR THE NOTES
Prior to this offering there has been no public trading
market for the Notes, although the Notes have been eligible for
trading through the PORTAL Market. Although the Initial
Purchaser has advised the Company that it currently intends to
make a market in the Notes, it is not obligated to do so and may
discontinue such market making at any time without notice. In
addition, such market making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act.
Accordingly, there can be no assurance that any public market for
the Notes will develop or, if one does develop, that it will be
maintained. If an active public market for the Notes fails to
develop or be sustained, the trading price of such Notes could be
materially adversely affected. The Company does not intend to
apply for listing of the Notes on any securities exchange.
8
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales
of the Notes or the Shares by the Selling Securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to
fixed charges of the Company for the periods indicated:
Six Months
Ended
Year Ended December 31, June 30,
1991 1992 1993 1994 1995 1995 1996
Ratio of earnings to 11.20 * * * * * *
fixed charges
____________________
* The ratio of earnings to fixed charges is computed using pre-tax
income. On this basis, earnings before fixed charges for the years
ended December 31, 1992, 1993, 1994 and 1995 and for the six months ended
June 30, 1995 and 1996 were not adequate to cover fixed charges by
$8.0 million, $12.6 million, $18.2 million, $22.0 million, $10.1 million and
$8.4 million, respectively.
9
The ratio of earnings to fixed charges is computed by
dividing fixed charges into earnings before income taxes plus
fixed charges. Fixed charges consist of interest expense and
that portion of net rental expense (one-third) deemed
representative of the interest factor.
DESCRIPTION OF NOTES
The Notes were issued under an indenture, dated as of
July 8, 1996 (the "Indenture"), between the Company and Norwest
Bank Minnesota, National Association, as trustee (the "Trustee").
Copies of the Indenture and the Registration Rights Agreement (as
defined below) are available from the Trustee upon request by a
registered holder of the Notes. The following summaries of
certain provisions of the Notes, the Indenture and the
Registration Rights Agreement do not purport to be complete and
are subject to, and are qualified in their entirety by reference
to, all the provisions of the Notes, the Indenture and the
Registration Rights Agreement, including the definitions therein
of certain terms which are not otherwise defined in this
Prospectus. Wherever particular provisions or defined terms of
the Indenture (or of the form of Note which is a part thereof) or
the Registration Rights Agreement are referred to, such
provisions or defined terms are incorporated herein by reference.
GENERAL
The Notes represent unsecured general obligations of the
Company subordinate in right of payment to certain other
obligations of the Company as described under "Subordination of
Notes" and convertible into Common Stock as described under
"Conversion of Notes." The Notes are limited to $60,000,000
aggregate principal amount, are issuable only in denominations of
$1,000 or multiples thereof and will mature on July 1, 2003,
unless earlier redeemed at the option of the Company or at the
option of the holder upon a Fundamental Change (as defined
below).
The Indenture does not contain any financial covenants or
restrictions on the payment of dividends, the incurrence of
Senior Indebtedness (as defined below under "Subordination of
Notes") or the issuance or repurchase of securities of the
Company. The Indenture contains no covenants or other provisions
to afford protection to holders of the Notes in the event of a
highly leveraged transaction or a change in control of the
Company except to the extent described under "Redemption at
Option of the Holder."
The Notes bear interest at the rate of 7% per annum from
July 8, 1996, payable semi-annually on January 1 and July 1,
commencing on January 1, 1997, to holders of record at the close
of business on the preceding December 15 and June 15,
respectively, except (i) that the interest payable upon
redemption (unless the date of redemption is an interest payment
date) will be payable to the person to whom principal is payable
and (ii) as set forth in the next succeeding sentence. In the
case of any Note (or portion thereof) which is converted into
Common Stock of the Company during the period from (but
excluding) a record date to (but excluding) the next succeeding
interest payment date either (i) if such Note (or portion
thereof) has been called for redemption on a redemption date
which occurs during such period, or is to be redeemed in
connection with a Fundamental Change on a Repurchase Date (as
defined below) which occurs during such period, the Company shall
not be required to pay interest on such interest payment date in
respect of any such Note (or portion thereof) or (ii) if
otherwise, any Note (or portion thereof) submitted for conversion
during such period shall be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the
principal amount so converted (see "Conversion of Notes" below).
Interest may, at the Company's option, be paid either (i) by
check mailed to the address of the person entitled thereto as it
appears in the Note register or (ii) by transfer to an account
maintained by such person located in the United States; provided,
however, that payments to The Depository Trust Company, New York,
New York ("DTC") will be made by wire transfer of immediately
available funds to the account of DTC or its nominee. Interest
will be computed on the basis of a 360-day year composed of
twelve 30-day months.
10
FORM, DENOMINATION AND REGISTRATION
Global Note, Book-Entry Form. Notes are issuable in fully
registered form, without coupons, in denominations of $1,000
principal amount and multiples thereof. Notes sold by the
Selling Securityholders pursuant to the Registration Statement of
which this Prospectus forms a part will be represented by a
global Note (the "Registered Global Note"), except as set forth
below under "Certificated Notes." The Registered Global Note
will be deposited with, or on behalf of, DTC and registered in
the name of Cede & Co. ("Cede") as DTC's nominee. Beneficial
interests in the Registered Global Note will be exchangeable for
definitive certificated Notes only in accordance with the terms
of the Indenture.
Purchasers of the Notes offered hereby may hold their
interests in the Registered Global Note directly through DTC or
indirectly through organizations which are participants in DTC
(the "Participants"). Transfers between Participants will be
effected in the ordinary way in accordance with DTC rules and
will be settled in clearing house funds.
Persons who are not Participants may beneficially own
interests in the Registered Global Note held by DTC only through
Participants or certain banks, brokers, dealers, trust companies
and other parties that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly
("Indirect Participants"). So long as Cede, as the nominee of
DTC, is the registered owner of the Registered Global Note, Cede
for all purposes will be considered the sole holder of the
Registered Global Note. Except as provided below, owners of
beneficial interests in the Registered Global Note will not be
entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of
certificates in definitive form, and will not be considered the
holders thereof.
Payment of interest on and the redemption price of the
Registered Global Note will be made to Cede, the nominee for DTC,
as the registered owner of the Registered Global Note by wire
transfer of immediately available funds on each interest payment
date or the redemption date, as the case may be. Neither the
Company, the Trustee nor any paying agent will have any
responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership
interests in the Registered Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial
ownership interests.
The Company has been informed by DTC that, with respect to
any payment of interest on, or the redemption price of, the
Registered Global Note, DTC's practice is to credit Participants'
accounts on the payment date therefor with payments in amounts
proportionate to their respective beneficial interests in the
principal amount represented by the Registered Global Note as
shown on the records of DTC, unless DTC has reason to believe
that it will not receive payment on such payment date. Payments
by Participants to owners of beneficial interests in the
principal amount represented by the Registered Global Note held
through such Participants will be the responsibility of such
Participants, as is now the case with securities held for the
accounts of customers registered in "street name."
Because DTC can only act on behalf of Participants, who in
turn act on behalf of Indirect Participants and certain banks,
the ability of a person having a beneficial interest in the
principal amount represented by the Registered Global Note to
pledge such interest to persons or entities that do not
participate in the DTC system, or otherwise take actions in
respect of such interest, may be affected by the lack of a
physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any registrar,
paying agent or conversion agent under the Indenture) will have
any responsibility for the performance by DTC or its Participants
or Indirect Participants of their respective obligations under
the rules and procedures governing their operations. DTC has
advised the Company that it will take any action permitted to be
taken by a holder of Notes (including, without limitation, the
presentation of Notes for exchange as described below), only at
the direction of one or more Participants to whose account with
DTC interests in the Registered Global Note are credited, and
only in respect of the principal amount of the Notes represented
by the Registered Global Note as to which such Participant or
Participants has or have given such direction.
11
DTC has advised the Company as follows: DTC is a limited
purpose trust company organized under the laws of the State of
New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code
and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance
and settlement of securities transactions between Participants
through electronic book-entry changes to the accounts of its
Participants, thereby eliminating the need for physical movement
of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may
include certain other organizations. Certain of such
Participants (or their representatives), together with other
entities, own DTC. Indirect access to the DTC system is available
to others such as banks, brokers, dealers and trust companies
that clear through, or maintain a custodial relationship with, a
Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order
to facilitate transfers of interests in the Registered Global
Note among Participants, it is under no obligation to perform or
continue to perform such procedures, and such procedures may be
discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is
not appointed by the Company within 90 days, the Company will
cause Notes to be issued in definitive form in exchange for the
Registered Global Note.
Certificated Notes. Holders of Notes may request that
certificated Notes be issued in lieu of, or in exchange for,
Notes represented by the Registered Global Note. Furthermore,
certificated Notes may be issued in exchange for Notes
represented by the Registered Global Note if no successor
depositary is appointed by the Company as set forth above under
"Global Note, Book-Entry Form."
CONVERSION OF NOTES
The holders of Notes will be entitled at any time after
October 6, 1996 through the close of business on the final
maturity date of the Notes, subject to prior redemption, to
convert any Notes or portions thereof (in denominations of $1,000
or multiples thereof) into Common Stock of the Company, at the
conversion price set forth on the cover page of this Prospectus,
subject to adjustment as described below. Except as described
below, no payment or other adjustment will be made on conversion
of any Notes for interest accrued thereon or for dividends on any
Common Stock issued. If any Notes not called for redemption are
converted after a record date for the payment of interest and
prior to the next succeeding interest payment date, such Notes
must be accompanied by funds equal to the interest payable on
such succeeding interest payment date on the principal amount so
converted. The Company is not required to issue fractional shares
of Common Stock upon conversion of Notes and, in lieu thereof,
will pay a cash adjustment based upon the market price of Common
Stock on the last business day prior to the date of conversion.
In the case of Notes called for redemption, conversion rights
will expire at the close of business on the business day
preceding the day fixed for redemption unless the Company
defaults in the payment of the redemption price. A Note in
respect of which a holder is exercising its option to require
redemption upon a Fundamental Change may be converted only if
such holder withdraws its election to exercise its option in
accordance with the terms of the Indenture.
The initial conversion price of $19.68 per share of Common
Stock is subject to adjustment under formulae as set forth in the
Indenture in certain events, including:
(i) the issuance of Common Stock of the Company as a
dividend or distribution on the Common Stock;
(ii) certain subdivisions and combinations of the Common
Stock;
(iii) the issuance to all holders of Common Stock of certain
rights or warrants to purchase Common Stock;
12
(iv) the distribution to all holders of Common Stock of
capital stock (other than Common Stock) or evidences of
indebtedness of the Company or of assets (including securities,
but excluding those rights, warrants, dividends and distributions
referred to above or paid in cash);
(v) distributions consisting of cash, excluding any
quarterly cash dividend on the Common Stock to the extent that
the aggregate cash dividend per share of Common Stock in any
quarter does not exceed the greater of (x) the amount per share
of Common Stock of the next preceding quarterly cash dividend on
the Common Stock to the extent that such preceding quarterly
dividend did not require an adjustment of the conversion price
pursuant to this clause (v) (as adjusted to reflect subdivisions
or combinations of the Common Stock), and (y) 3.75 percent of the
average of the last reported sales price of the Common Stock
during the ten trading days immediately prior to the date of
declaration of such dividend, and excluding any dividend or
distribution in connection with the liquidation, dissolution or
winding up of the Company. If an adjustment is required to be
made as set forth in this clause (v) as a result of a
distribution that is a quarterly dividend, such adjustment will
be based upon the amount by which such distribution exceeds the
amount of the quarterly cash dividend permitted to be excluded
pursuant to this clause (v). If an adjustment is required to be
made as set forth in this clause (v) as a result of a
distribution that is not a quarterly dividend, such adjustment
would be based upon the full amount of the distribution;
(vi) payment in respect of a tender offer or exchange offer
by the Company or any subsidiary of the Company for the Common
Stock to the extent that the cash and value of any other
consideration included in such payment per share of Common Stock
exceeds the Current Market Price (as defined in the Indenture)
per share of Common Stock on the trading day next succeeding the
last date on which tenders or exchanges may be made pursuant to
such tender or exchange offer;
(vii) payment in respect of a tender offer or exchange offer
by a person other than the Company or any subsidiary of the
Company in which, as of the closing date of the offer, the Board
of Directors is not recommending rejection of the offer. The
adjustment referred to in this clause (vii) will only be made if
the tender offer or exchange offer is for an amount which
increases the offeror's ownership of Common Stock to more than
25% of the total shares of Common Stock outstanding, and if the
cash and value of any other consideration included in such
payment per share of Common Stock exceeds the Current Market
Price per share of Common Stock on the business day next
succeeding the last date on which tenders or exchanges may be
made pursuant to such tender or exchange offer. The adjustment
referred to in this clause (vii) will generally not be made,
however, if, as of the closing of the offer, the offering
documents with respect to such offer disclose a plan or an
intention to cause the Company to engage in a consolidation or
merger of the Company or a sale of all or substantially all of
the Company's assets; and
(viii) the issuance of Common Stock or securities
convertible into, or exchangeable for, Common Stock at a price
per share (or having a conversion or exchange price per share)
that is less than the then Current Market Price of the Common
Stock (but excluding, among other things, issuances: (a) pursuant
to any bona fide plan for the benefit of employees, directors or
consultants of the Company now or hereafter in effect; (b) to
acquire all or any portion of a business in an arm's-length
transaction between the Company and an unaffiliated third party
including, if applicable, issuances upon exercise of options or
warrants assumed in connection with such an acquisition; (c) in a
bona fide public offering pursuant to a firm commitment
underwriting or sales at the market pursuant to a continuous
offering stock program; (d) pursuant to the exercise of warrants,
rights (including, without limitation, earnout rights) or
options, or upon the conversion of convertible securities, which
are issued and outstanding on the date hereof, or which may be
issued in the future at fair value and with an exercise price or
conversion price at least equal to the Current Market Price of
the Common Stock at the time of issuance of such warrant, right,
option or convertible security; and (e) pursuant to a dividend
reinvestment plan or other plan hereafter adopted for the
reinvestment of dividends or interest provided that such Common
Stock is issued at a price at least equal to 95% of the market
price of the Common Stock at the time of such issuance).
13
In the case of (i) any reclassification of the Common Stock,
or (ii) a consolidation, merger or combination involving the
Company or a sale or conveyance to another person of the property
and assets of the Company as an entirety or substantially as an
entirety, in each case as a result of which holders of Common
Stock shall be entitled to receive stock, other securities, other
property or assets (including cash) with respect to or in
exchange for such Common Stock, the holders of the Notes then
outstanding will generally be entitled thereafter to convert such
Notes into the kind and amount of shares of stock, other
securities or other property or assets which they would have
owned or been entitled to receive upon such reclassification,
change, consolidation, merger, combination, sale or conveyance
had such Notes been converted into Common Stock immediately prior
to such reclassification, consolidation, merger, combination,
sale or conveyance assuming that a holder of Notes would not have
exercised any rights of election as to the stock, other
securities or other property or assets receivable in connection
therewith.
In the event of a taxable distribution to holders of Common
Stock or in certain other circumstances requiring conversion
price adjustments, the holders of Notes may, in certain
circumstances, be deemed to have received a distribution subject
to United States income tax as a dividend; in certain other
circumstances, the absence of such an adjustment may result in a
taxable dividend to the holders of Common Stock. See "Certain
Federal Income Tax Considerations" below.
The Company from time to time may to the extent permitted by
law reduce the conversion price by any amount for any period of
at least 20 days, in which case the Company shall give at least
15 days' notice of such reduction, if the Board of Directors has
made a determination that such reduction would be in the best
interests of the Company, which determination shall be
conclusive. The Company may, at its option, make such reductions
in the conversion price, in addition to those set forth above, as
the Board of Directors deems advisable to avoid or diminish any
income tax to holders of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. See "Certain
Federal Income Tax Considerations."
No adjustment in the conversion price will be required
unless such adjustment would require a change of at least 1% in
the conversion price then in effect; provided that any adjustment
that would otherwise be required to be made shall be carried
forward and taken into account in any subsequent adjustment.
Except as stated above, the conversion price will not be adjusted
for the issuance of Common Stock or any securities convertible
into or exchangeable for Common Stock or carrying the right to
purchase any of the foregoing.
OPTIONAL REDEMPTION BY THE COMPANY
The Notes are not entitled to any sinking fund. At any time
on or after July 7, 1999, the Notes will be redeemable at the
Company's option on at least 30 days' notice as a whole or, from
time to time, in part at the following prices (expressed as
percentages of the principal amount), together with accrued
interest to and including the date fixed for redemption.
If redeemed during the 12-month period beginning July 1:
Year Redemption Price
1999 104.00%
2000 103.00
2001 102.00
2002 101.00
and 100% at July 1, 2003; provided that any semi-annual payment
of interest becoming due on the date fixed for redemption shall
be payable to the holders of record on the relevant record date
of the Notes being redeemed.
14
If less than all of the outstanding Notes are to be
redeemed, the Trustee shall select the Notes to be redeemed in
principal amounts of $1,000 or multiples thereof by lot, pro rata
or by another method the Trustee considers fair and appropriate.
If a portion of a holder's Notes is selected for partial
redemption and such holder converts a portion of such Notes, such
converted portion shall be deemed to be of the portion selected
for redemption.
REDEMPTION AT OPTION OF THE HOLDER
If a Fundamental Change (as defined below) occurs at any
time prior to July 1, 2003, each holder of Notes shall have the
right, at the holder's option, to require the Company to redeem
any or all of such holder's Notes on the date (the "Repurchase
Date") that is 30 days after the date of the Company's notice of
such Fundamental Change. The Notes will be redeemable in
multiples of $1,000 principal amount.
The Company shall redeem such Notes at a price (expressed as
a percentage of the principal amount) equal to (i) 107.00% if the
Repurchase Date is during the 12-month period beginning July 1,
1996, (ii) 106.00% if the Repurchase Date is during the 12-month
period beginning July 1, 1997, (iii) 105.00% if the Repurchase
Date is during the 12-month period beginning July 1, 1998 and
(iv) thereafter at the redemption price set forth under "Optional
Redemption by the Company" which would be applicable to a
redemption at the option of the Company on the Repurchase Date;
provided that, if the Applicable Price (as defined) is less than
the Reference Market Price (as defined), the Company shall redeem
such Notes at a price equal to the foregoing redemption price
multiplied by the fraction obtained by dividing the Applicable
Price by the Reference Market Price. In each case, the Company
shall also pay accrued interest on the redeemed Notes to, but
excluding, the Repurchase Date; provided that, if such Repurchase
Date is an interest payment date, then the interest payable on
such date shall be paid to the holder of record of the Notes on
the relevant record date.
The Company is required to mail to all holders of record of
the Notes a notice of the occurrence of a Fundamental Change and
of the redemption right arising as a result thereof on or before
the tenth day after the occurrence of such Fundamental Change.
The Company is also required to deliver the Trustee a copy of
such notice. To exercise the redemption right, a holder of Notes
must deliver, on or before the 30th day after the date of the
Company's notice of a Fundamental Change (the "Fundamental Change
Expiration Time"), written notice of the holder's exercise of
such right, together with the Notes to be so redeemed, duly
endorsed for transfer, to the Company (or an agent designated by
the Company for such purpose). Payment for Notes surrendered for
redemption (and not withdrawn) prior to the Fundamental Change
Expiration Time will be made promptly following the Repurchase
Date.
The term "Fundamental Change" means the occurrence of any
transaction or event in connection with which all or
substantially all Common Stock shall be exchanged for, converted
into, acquired for or constitute the right to receive
consideration which is not all or substantially all common stock
listed (or, upon consummation of or immediately following such
transaction or event, which will be listed) on a United States
national securities exchange or approved for quotation on the
Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices
(whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise). The term "Applicable Price" means
(i) in the event of a Fundamental Change in which the holders of
the Common Stock receive only cash, the amount of cash received
by the holder of one share of Common Stock and (ii) in the event
of any other Fundamental Change, the average of the last reported
sale price for the Common Stock during the ten trading days prior
to the record date for the determination of the holders of Common
Stock entitled to receive cash, securities, property or other
assets in connection with such Fundamental Change, or, if there
is no such record date, the date upon which the holders of the
Common Stock shall have the right to receive such cash,
securities, property or other assets in connection with the
Fundamental Change. The term "Reference Market Price" shall
initially mean $10.67 and in the event of any adjustment to the
conversion price described above pursuant to the provisions of
the Indenture the Reference Market Price shall also be adjusted
so that the ratio of the Reference Market Price to the conversion
price after giving effect to any such adjustment shall always be
the same as the ratio of $10.67 to $19.68.
15
The Company will comply with the provisions of Rule 13e-4
and any other tender offer rules under the Exchange Act which may
then be applicable in connection with the redemption rights of
Note holders in the event of a Fundamental Change. The redemption
rights of the holders of Notes could discourage a potential
acquiror of the Company. The Fundamental Change redemption
feature, however, is not the result of management's knowledge of
any specific effort to obtain control of the Company by means of
a merger, tender offer, solicitation or otherwise, or part of a
plan by management to adopt a series of anti-takeover provisions.
The Company could, in the future, enter into certain
transactions, including certain recapitalizations of the Company,
that would not constitute a Fundamental Change, but that would
increase the amount of Senior Indebtedness outstanding at such
time. Further, the payment of the Fundamental Change redemption
price on the Notes is subordinated to the prior payment of Senior
Indebtedness as described under "Subordination of Notes" below.
There are no restrictions in the Indenture on the creation of
additional Senior Indebtedness or other indebtedness. Under
certain circumstances, the incurrence of additional indebtedness
could have an adverse effect on the Company's ability to service
its indebtedness, including the Notes. If a Fundamental Change
were to occur, there can be no assurance that the Company would
have sufficient funds to pay the Fundamental Change redemption
price for all Notes tendered by the holders thereof. A default by
the Company on its obligations to pay the Fundamental Change
redemption price could result in acceleration of the payment of
other indebtedness of the Company at the time outstanding
pursuant to cross-default provisions.
SUBORDINATION OF NOTES
The Indebtedness evidenced by the Notes is subordinated to
the extent provided in the Indenture to the prior payment in full
of all Senior Indebtedness. Upon any distribution of assets of
the Company upon any dissolution, winding up, liquidation or
reorganization, the payment of the principal of, premium, if any,
and interest on the Notes is to be subordinated to the extent
provided in the Indenture in right of payment to the prior
payment in full in cash of all Senior Indebtedness. In the event
of any acceleration of the Notes because of an Event of Default
(as defined in the Indenture), the holders of any Senior
Indebtedness then outstanding would be entitled to payment in
full in cash of all obligations in respect of such Senior
Indebtedness before the holders of the Notes are entitled to
receive any payment or distribution in respect thereof. The
Indenture will require that the Company promptly notify holders
of Senior Indebtedness if payment of the Notes is accelerated
because of an Event of Default.
The Company also may not make any payment upon or in respect
of the Notes if (i) a default in the payment of the principal of,
premium, if any, interest, rent or other obligations in respect
of Senior Indebtedness occurs and is continuing beyond any
applicable period of grace or (ii) any other default occurs and
is continuing with respect to Designated Senior Indebtedness (as
defined) that permits holders of the Designated Senior
Indebtedness as to which such default relates to accelerate its
maturity and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the Company or other person
permitted to give such notice under the Indenture. Payments on
the Notes may and shall be resumed (a) in case of a payment
default, upon the date on which such default is cured or waived
and (b) in case of a nonpayment default, the earlier of the date
on which such nonpayment default is cured or waived or 179 days
after the date on which the applicable Payment Blockage Notice is
received. No new period of payment blockage may be commenced
pursuant to a Payment Blockage Notice unless and until (i) 365
days have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice and (ii) all scheduled
payments of principal, premium, if any, and interest on the Notes
that have come due have been paid in full in cash. During any
period of payment blockage, any payment that otherwise would have
been made during such period will accrue interest, to the extent
legally permissible, at the annual rate set forth on the cover
page hereof from the date on which such payment was required
under the terms of the Indenture until the date of payment. No
nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be,
or shall be made, the basis for a subsequent Payment Blockage
Notice.
16
By reason of the subordination provisions described above,
in the event of the Company's bankruptcy, dissolution or
reorganization, holders of Senior Indebtedness may receive more,
ratably, and holders of the Notes may receive less, ratably, than
the other creditors of the Company. Such subordination will not
prevent the occurrence of any Event of Default under the
Indenture.
The term "Senior Indebtedness" means the principal of,
premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition interest is
allowable as a claim in any such proceeding) and rent payable on
or in connection with, and all fees, costs, expenses and other
amounts accrued or due on or in connection with, Indebtedness (as
defined below) of the Company, whether outstanding on the date of
this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing), unless in the
case of any particular Indebtedness the instrument creating or
evidencing the same or the assumption or guarantee thereof
expressly provides that such Indebtedness shall not be senior in
right of payment to the Notes or expressly provides that such
Indebtedness is pari passu or junior to the Notes.
Notwithstanding the foregoing, the term Senior Indebtedness shall
not include any Indebtedness of the Company to any subsidiary of
the Company, a majority of the voting stock of which is owned,
directly or indirectly, by the Company.
The term "Indebtedness" means, with respect to any Person
(as defined in the Indenture), and without duplication:
(a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person for borrowed money
(including obligations of the Company in respect of overdrafts,
foreign exchange contracts, currency exchange agreements,
interest rate protection agreements, and any loans or advances
from banks, whether or not evidenced by notes or similar
instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the
whole of the assets of such Person or to only a portion thereof)
(other than any account payable or other accrued current
liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or
services),
(b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters
of credit, bank guarantees or bankers' acceptances,
(c) all obligations and liabilities (contingent or
otherwise) in respect of leases of such Person required, in
conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance
sheet of such Person and all obligations and other liabilities
(contingent or otherwise) under any lease or related document
(including a purchase agreement) in connection with the lease of
real property which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the
leased property and thereby guarantee a minimum residual value of
the leased property to the lessor and the obligations of such
Person under such lease or related document to purchase or to
cause a third party to purchase such leased property,
(d) all obligations of such Person (contingent or otherwise)
with respect to an interest rate or other swap, cap or collar
agreement or other similar instrument or agreement or foreign
currency hedge, exchange, purchase or similar instrument or
agreement,
(e) all direct or indirect guaranties or similar agreements
by such Person in respect of, and obligations or liabilities
(contingent or otherwise) of such Person to purchase or otherwise
acquire or otherwise assure a creditor against loss in respect
of, indebtedness, obligations or liabilities of another Person of
the kind described in clauses (a) through (d),
(f) any indebtedness or other obligations described in
clauses (a) through (d) secured by any mortgage, pledge, lien or
other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other
obligation secured thereby shall have been assumed by such
Person, and
17
(g) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
The term "Designated Senior Indebtedness" means any
particular Senior Indebtedness in which the instrument creating
or evidencing the same or the assumption or guarantee thereof (or
related agreements or documents to which the Company is a party)
expressly provides that such Senior Indebtedness shall be
"Designated Senior Indebtedness" for purposes of the Indenture
(provided that such instrument, agreement or other document may
place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior
Indebtedness).
At June 30, 1996, the Company had approximately $2.0 million
of indebtedness outstanding that would have constituted Senior
Indebtedness. The Indenture does not limit the amount of
additional indebtedness, including Senior Indebtedness, which the
Company can create, incur, assume or guarantee, nor does the
Indenture limit the amount of indebtedness which any subsidiary
can create, incur, assume or guarantee.
In the event that, notwithstanding the foregoing, the
Trustee or any holder of the Notes receives any payment or
distribution of assets of the Company of any kind in
contravention of any of the subordination provisions of the
Indenture, whether in cash, property or securities, including,
without limitation, by way of set-off or otherwise, in respect of
the Notes before all Senior Indebtedness is paid in full, then
such payment or distribution will by held by the recipient in
trust for the benefit of holders of Senior Indebtedness or their
representatives to the extent necessary to make payment in full
of all Senior Indebtedness remaining unpaid, after giving effect
to any concurrent payment or distribution, or provision therefor,
to or for the holders of Senior Indebtedness.
The Company is obligated to pay reasonable compensation to
the Trustee and to indemnify the Trustee against certain losses,
liabilities or expenses incurred by it in connection with its
duties relating to the Notes. The Trustee's claims for such
payments will generally be senior to those of holders of the
Notes in respect of all funds collected or held by the Trustee.
EVENTS OF DEFAULT; NOTICE AND WAIVER
An Event of Default is defined in the Indenture as being:
default in payment of the principal of or premium, if any, on the
Notes; default for 30 days in payment of any installment of
interest on the Notes; default by the Company for 60 days after
notice in the observance or performance of any other covenants in
the Indenture; or certain events involving bankruptcy, insolvency
or reorganization of the Company. The Indenture provides that the
Trustee may withhold notice to the holders of the Notes of any
default (except in payment of principal of, premium, if any, or
interest with respect to the Notes) if the Trustee considers it
in the interest of the holders of the Notes to do so.
The Indenture provides that if an Event of Default shall
have occurred and be continuing, the Trustee or the holders of
not less than 25% in principal amount of the Notes then
outstanding may declare the principal of and accrued interest on
the Notes to be due and payable immediately. In the case of
certain events of bankruptcy or insolvency, the principal of,
premium, if any, and interest on the Notes shall automatically
become and be immediately due and payable. However, if the
Company shall cure all defaults (except the nonpayment of
principal of, premium, if any, and interest on any of the Notes
which shall have become due by acceleration) and certain other
conditions are met, with certain exceptions, such declaration may
be canceled and past defaults may be waived by the holders of a
majority of the principal amount of the Notes then outstanding.
The holders of a majority in principal amount of the Notes
then outstanding shall have the right to direct the time, method
and place of conducting any proceedings for any remedy available
to the Trustee, subject to certain limitations specified in the
Indenture.
18
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in principal amount of the Notes at the time
outstanding, to modify the Indenture or any supplemental
indenture or the rights of the holders of the Notes, except that
no such modification shall (i) extend the fixed maturity of any
Note, reduce the rate or extend the time for payment of interest
thereon, reduce the principal amount thereof or premium, if any,
thereon, reduce any amount payable upon redemption or repurchase
thereof, change the obligation of the Company to repurchase any
Note upon the happening of any Fundamental Change in a manner
adverse to holders of Notes, impair the right of a holder to
institute suit for the payment thereof, change the currency in
which the Notes are payable, impair the right to convert the
Notes into Common Stock subject to the terms set forth in the
Indenture, or modify the provisions of the Indenture with respect
to the subordination of the Notes in a manner adverse to the
holders of the Notes in any material respect, without the consent
of each holder of a Note so affected, or (ii) reduce the
aforesaid percentage of Notes whose holders are required to
consent to any such supplemental indenture, without the consent
of the holders of all of the Notes then outstanding. The
Indenture also provides for certain modifications of its terms
without the consent of holders of the Notes.
REGISTRATION RIGHTS OF THE NOTEHOLDERS
Pursuant to the terms of the Registration Rights Agreement
dated as of July 8, 1996 between the Company and the Initial
Purchaser (the "Registration Rights Agreement"), the Company has
filed with the Commission a registration statement, of which this
Prospectus forms a part, covering resales by holders of the Notes
and the Common Stock issuable upon conversion of the Notes. The
Company has agreed to keep the registration statement effective
until the earlier of (i) the sale pursuant to the registration
statement of all the securities registered thereunder and
(ii) the expiration of the holding period applicable to such
securities under Rule 144(k) under the Securities Act, or any
successor provision. The Registration Rights Agreement provides
that the Company may suspend the use of this Prospectus for a
period not to exceed 30 days in any three-month period, or not to
exceed an aggregate of 60 days in any 12-month period under
certain circumstances relating to pending corporate developments,
public filings with the Commission and similar events. The
Company has agreed to pay predetermined liquidated damages to
those holders of Notes and those holders of Common Stock issued
upon conversion of the Notes who have requested to sell pursuant
to the registration statement if the registration statement is
unavailable for periods in excess of those permitted above. The
Company has further agreed, if such unavailability continues for
an additional thirty-day period, to pay predetermined liquidated
damages to all holders of Notes and all holders of Common Stock
issued upon conversion of the Notes, whether or not such holder
has requested to sell pursuant to the registration statement.
The Registration Rights Agreement provides for Selling
Securityholders to (i) be named as a selling securityholder in a
supplement to this Prospectus and (ii) deliver this Prospectus
together with the relevant Prospectus Supplement to purchasers,
and further provides for Selling Securityholders to be bound by
those provisions of the Registration Rights Agreement which are
applicable to the Selling Securityholders (including
indemnification provisions). The Company has agreed to pay all
expenses incident to the Company's performance of and compliance
with the Registration Rights Agreement, provide to each Selling
Securityholder copies of this Prospectus and the relevant
Prospectus Supplement, notify each Selling Securityholder when
the registration statement has become effective and take certain
other actions as are required to permit, subject to the
foregoing, unrestricted resales of the Notes and the underlying
Common Stock.
INFORMATION CONCERNING THE TRUSTEE
Norwest Bank Minnesota, National Association, as the Trustee
under the Indenture, has been appointed by the Company as paying
agent, conversion agent, registrar and custodian with regard to
the Notes.
19
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of
60,000,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), and 5,524,525 shares of Preferred Stock, par
value $.01 per share (the "Preferred Stock").
COMMON STOCK
At June 30, 1996, there were 21,655,284 shares of Common
Stock outstanding held of record by 370 stockholders. Subject to
preferences that may be applicable to any outstanding shares of
Preferred Stock, the holders of Common Stock are entitled to
receive such dividends, if any, as may be declared from time to
time by the Board of Directors in its discretion from funds
legally available therefor. Upon liquidation or dissolution of
the Company, the holders of Common Stock are entitled to receive,
pro rata, all assets of the Company remaining after payment of
liabilities and the liquidation preference of any outstanding
shares of Preferred Stock. Holders of Common Stock have no
preemptive or other subscription rights, and there are no
conversion rights or redemption or sinking fund provisions with
respect to such shares. The holders of Common Stock are entitled
to one vote for each share held of record on all matters
submitted to a vote of stockholders. The outstanding shares of
Common Stock are, and the shares of Common Stock to be
outstanding upon completion of this offering will be, fully paid
and nonassessable. The Company has not paid and does not
presently intend to pay cash dividends on its Common Stock.
PREFERRED STOCK
At June 30, 1996, the Company had reserved 2,108,652 shares
of Series A Convertible Preferred Stock for issuance upon
exercise of warrants (the "Preferred Stock Warrants"). The
Preferred Stock Warrants expire on January 12, 2000 and are
exercisable at $1.00 per share. Each share of Series A
Convertible Preferred Stock is convertible into one share of
Common Stock. In connection with the initial public offering of
the Common Stock in May 1991, the holders of the Preferred Stock
Warrants agreed that, immediately upon any exercise thereof, such
holders would convert the Series A Convertible Preferred Stock
issuable upon exercise of such warrants into shares of Common
Stock.
The Company's Board of Directors has the authority to issue
up to 3,000,000 additional shares of Preferred Stock from time to
time in one or more series and to fix the number of shares and
the relative rights, conversion rights, voting rights, rights and
terms of redemption, liquidation preferences and any other
preferences, special rights and qualifications of any such
series. If shares of Preferred Stock with voting rights are
issued, such issuance could affect the voting rights of the
holders of the Company's Common Stock by increasing the number of
outstanding shares entitled to vote and by the creation of class
or series voting rights. In addition, any further issuance of
Preferred Stock could, under certain circumstances, have the
effect of delaying or preventing a change in control of the
Company and may adversely affect the rights of holders of Common
Stock. The Company has no present plans to issue any additional
shares of Preferred Stock or to establish or designate any new
series of Preferred Stock.
Other than rights that may be granted to holders of
Preferred Stock, there is no provision in the Company's Restated
Certificate of Incorporation or By-laws that would have the
effect of delaying, deterring or preventing a change in control
in the Company and that would operate only with respect to an
extraordinary corporate transaction involving the Company, such
as a merger, reorganization, tender offer, sale or transfer of
substantially all of the Company's assets, or liquidation.
20
REGISTRATION RIGHTS
In December 1990, the Company entered into a stockholders'
agreement with certain stockholders (the "Stockholders'
Agreement"). The signatories to the Stockholders' Agreement are
entitled to certain rights to registration under the Securities
Act of certain shares of Common Stock held by such persons.
Under the Stockholders' Agreement, these holders may request that
the Company file a registration statement under the Securities
Act and, subject to certain conditions, the Company generally
will be required to use its best efforts to effect any such
registration. The Company is not generally required to effect
more than two such registrations, although under certain
circumstances the holders will have the right to request
additional registrations. In addition, if the Company proposes to
register any of its securities, either for its own account or for
the account of other stockholders, the Company is required, with
certain exceptions, to notify such holders and, subject to
certain limitations, to include in such registration all of the
shares of Common Stock requested to be included by such holders.
The Company is generally obligated to bear the expenses, other
than underwriting discounts and sales commissions, of all of
these registrations. American Home Products Corporation and
Baxter Healthcare Corporation also have certain rights to
registration under the Securities Act of shares of Common Stock
beginning in January 1997. For a description of the Registration
Rights Agreement pursuant to which the Notes and Shares offered
hereby are being registered under the Securities Act, see
"Description of Notes - Registration Rights of the Noteholders."
Any exercise of such registration rights may hinder efforts
by the Company to arrange future financings and may have an
adverse effect on the market price of the Common Stock.
LIMITATION OF LIABILITY
As permitted by the Delaware General Corporation Law, the
Company's Restated Certificate of Incorporation provides that
directors of the Company shall not be personally liable to the
Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation
Law, relating to prohibited dividends or distributions or the
repurchase or redemption of stock, or (iv) for any transaction
from which the director derives an improper personal benefit.
As a result of this provision, the Company and its
stockholders may be unable to obtain monetary damages from a
director for breach of his duty of care. Although stockholders
may continue to seek injunctive or other equitable relief for an
alleged breach of fiduciary duty by a director, stockholders may
not have any effective remedy against the challenged conduct if
equitable remedies are unavailable.
The Company maintains directors, and officers, liability
insurance. In addition, the Company's By-laws provide for
indemnification of all officers and directors against liabilities
or expenses incurred in connection with any action, suit or
proceeding if the director or officer acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the
Company's best interests, unless the action, suit or proceeding
involves liability by the director or officer to the Company and
no court determines that such director or officer is entitled to
indemnification. The Company's by-laws also provide that expenses
incurred by a director or officer in defending any such action
may be advanced by the Company if the director or officer
undertakes to repay such amount in the event it is determined
that he is not entitled to indemnification.
21
BUSINESS COMBINATION PROVISIONS
The business combination provision contained in Section 203
of the Delaware General Corporation Law ("Section 203") generally
defines an interested stockholder as any person that (i) owns,
directly or indirectly 15% or more of the outstanding voting
stock of a corporation or (ii) is an affiliate or associate of a
corporation and was the owner of 15% or more of the outstanding
voting stock at any time within the three-year period immediately
prior to the date on which it is sought to be determined whether
such person is an interested stockholder, and the affiliates and
the associates of such person. Under Section 203, a resident
domestic corporation may not engage in any business combination
with any interested stockholder for a period of three years
following the time such stockholder became an interested
stockholder, unless (i) prior to such time the board of directors
of the corporation approved either the business combination or
the transaction which resulted in the stockholder becoming an
interested stockholder or (ii) upon consummation of the
transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the
time the transaction commenced (excluding, for purposes of
determining the number of shares outstanding shares owned (a) by
persons who are directors and also officers and (b) employee
stock plans, in certain instances), or (iii) at or subsequent to
such time the business combination is approved by the board of
directors and authorized at an annual or special meeting of
stockholders by the affirmative vote of at least 66 2'3% of the
outstanding voting stock which is not owned by the interested
stockholder. The restrictions imposed by Section 203 will not
apply to a corporation if (i) the corporation's original
certificate of incorporation contains a provision expressly
electing not to be governed by Section 203; or (ii) the
corporation by the action of stockholders holding a majority of
the outstanding voting stock adopts an amendment to its
certificate of incorporation or by-laws expressly electing not to
be governed by Section 203 (such amendment will not be effective
until 12 months after adoption and shall not apply to any
business combination between such corporation and any person who
became an interested stockholder of such corporation at or prior
to such adoption).
The Company has not elected out of the statute and,
therefore, the restrictions imposed by Section 203 will apply to
the Company.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is
American Stock Transfer & Trust Company.
22
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary sets forth certain Federal tax
consequences of acquiring and owning the Notes. Tax consequences
that result from the tax status or particular circumstances of
the holder are not addressed. Thus, for example, the summary does
not discuss the treatment of holders that are subject to special
tax rules, such as banks, insurance companies, regulated
investment companies, personal holding companies, corporations
subject to the alternative minimum tax, and tax-exempt entities.
The summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations, court decisions and
Internal Revenue Service rulings now in effect, all of which are
subject to change including changes with retroactive effect. The
summary assumes that Notes will be held as "capital assets" as
defined in the Code and that they were purchased upon their
original issuance at the initial offering price. Prospective
purchasers are advised to consult their own tax advisors
regarding the tax consequences of acquiring, holding or disposing
of Notes in light of their personal investment circumstances, and
the consequences under state, local and foreign tax laws.
NOTES PURCHASED AT A MARKET DISCOUNT
Subject to a de minimis exception, a holder of a Note
acquired at a market discount will generally be required to treat
as ordinary income any gain recognized on the disposition of the
Note to the extent of the accrued market discount on the Note at
the time of disposition. For this purpose, the market discount
on a Note will generally be equal to the amount, if any, by which
the stated redemption price at maturity of the Note immediately
after its acquisition exceeds the holder's tax basis in the Note.
In general, market discount on a Note will be treated as accruing
on a straight-line basis over the term of the Note or, at the
election of the holder, under a constant yield method. A holder
of a Note acquired at a market discount may also be required to
defer the deduction of a portion of the interest on any
indebtedness incurred or maintained to purchase or carry the Note
until the Note is disposed of in a taxable transaction. The
foregoing rules will not apply if the holder elects to include
accrued market discount in income currently. If a holder
acquires a Note at a market discount and receives Common Stock
upon conversion of the Note, the amount of accrued market
discount with respect to the Note through the date of the
conversion will be treated, under regulations to be issued, as
ordinary income on the disposition of the Common Stock.
NOTES PURCHASED AT A PREMIUM
A holder that purchases a Note for an amount in excess of
its principal amount may be entitled to elect to treat a portion
of such excess as "amortizable bond premium," which will reduce
the amount required to be included in the holder's income each
year as interest on the Note by the amount of such premium
allocable to that year based on the Note's yield to maturity.
The amount of amortizable bond premium will not, however, include
any amount attributable to the conversion features of the Note.
An election to amortize bond premium will apply to all bonds
(other than tax-exempt bonds) held by the holder at the beginning
of the taxable year to which the election applies or thereafter
acquired by the holder.
REDEMPTION OR SALE OF NOTES
Generally redemption or sale of the Notes will result in
taxable gain or loss equal to the difference between (i) the
amount of cash and the fair market value of any other property
received and (ii) the holder's tax basis in the Notes. To the
extent that the amount received is attributable to accrued
interest, however, that amount will be taxed as ordinary income.
A holder's tax basis in Notes generally will equal the cost of
the Notes to the holder. Subject to the market discount rules
discussed above, gain or loss on the disposition of Notes will be
capital gain or loss and will be long-term capital gain or loss
if the Notes have been held for more than one year at the time of
disposition.
23
CONVERSION OF NOTES INTO COMMON STOCK
No gain or loss will be recognized upon conversion of Notes
into Common Stock, except with respect to any cash paid in lieu
of fractional shares of Common Stock. The tax basis of the Common
Stock received upon conversion will be equal to the tax basis of
the Notes converted, less any portion thereof allocable to a
fractional share for which cash is received. The holding period
of the Common Stock received upon conversion will include the
holding period of the Notes converted. Under the current ruling
policy of the Internal Revenue Service, cash received in lieu of
a fractional share of Common Stock should generally be treated as
a payment in exchange for such fractional share rather than as a
dividend. Gain or loss recognized on the receipt of cash paid in
lieu of a fractional share generally will be capital gain or loss
and will equal the difference between the amount of cash received
and the amount of tax basis allocable to the fractional share.
ADJUSTMENT OF CONVERSION PRICE
Holders of convertible debt instruments may be deemed to
have received constructive distributions where the conversion
ratio is adjusted to reflect property distributions with respect
to the stock into which such debt instruments are convertible.
Adjustments to the conversion price made pursuant to a bona fide
reasonable adjustment formula which has the effect of preventing
the dilution of the interest of the holders of the debt
instruments, however, will generally not be considered to result
in a constructive distribution of stock. Certain of the possible
adjustments provided in the Notes may not qualify as being
pursuant to a bona fide reasonable adjustment formula. If such
adjustments are made, holders of Notes might be deemed to have
received constructive distributions taxable as dividends.
BACKUP WITHHOLDING
Under the backup withholding provisions of the Code and
applicable Treasury regulations, a holder of Notes or Common
Stock may be subject to backup withholding at the rate of 31%
with respect to dividends or interest paid on, or the proceeds of
a sale, exchange or redemption of Notes or Common Stock, unless
(a) such holder is a corporation or comes within certain other
exempt categories and when required demonstrates this fact or
(b) provides a taxpayer identification number, certifies as to no
loss of exemption from backup withholding, and otherwise complies
with applicable requirements of the backup withholding rules. The
amount of any backup withholding from a payment to a holder will
be allowed as a credit against the holder's Federal income tax
liability and may entitle such holder to a refund, provided that
the required information is furnished to the Internal Revenue
Service.
SPECIAL TAX RULES APPLICABLE TO FOREIGN HOLDERS
For purposes of the following discussion, a "United States
Alien Holder" is any holder who, for United States Federal income
tax purposes, is a foreign corporation, a foreign partnership, a
nonresident alien individual, or an estate or trust other than an
estate or trust the income of which is includible in income for
Federal income tax purposes regardless of its source.
Payments of interest on the Notes to a United States Alien
Holder will not be subject to United States Federal withholding
tax provided that (a) the holder does not actually or
constructively own 10% or more of the total combined voting power
of all classes of stock of the Company entitled to vote, (b) the
holder is not a controlled foreign corporation that is related to
the Company through stock ownership and (c) either (1) the
beneficial owner of the Note, under penalties of perjury,
provides the Company or its agent with such owner's name and
address and certifies that the owner is not a United States
person or (2) a securities clearing organization, bank, or other
financial institution that holds customers' securities in the
ordinary course of its trade or business (a "financial
institution") certifies to the Company or its agent, under
penalties of perjury, that such a statement has been received
from the beneficial owner by it or another financial institution
and furnishes to the Company or its agent a copy thereof.
24
A United States Alien Holder generally will not be subject
to United States Federal income or withholding tax on gain
realized on the sale or exchange of Notes or Common Stock unless
(i) the holder is an individual who was present in the United
States for 183 days or more during the taxable year and (a) such
holder has a "tax home" in the United States or (b) the gain is
attributable to an office or other fixed place of business
maintained in the United States by such holder, (ii) the gain is
effectively connected with the conduct of a trade or business of
the holder in the United States, or (iii) the Company is or has
been a "United States real property holding corporation" at any
time within the shorter of the five-year period preceding such
disposition or such holder's holding period. If the Company
becomes a "United States real property holding corporation," gain
recognized on a disposition of Notes or Common Stock would not be
subject to Federal income tax if (i) the Common Stock is
"regularly traded on an established securities market" within the
meaning of the Code and (ii) either (A) the United States Alien
Holder disposing of Common Stock did not own, actually or
constructively, at any time during the five-year period preceding
the disposition, more than 5% of the Common Stock, or (B) in the
case of a disposition of Notes, the United States Alien Holder
did not own, actually or constructively, Notes which, as of the
date of such holder's most recent acquisition of Notes, had a
fair market value greater than that of 5% of the Common Stock.
The preceding sentence assumes that the Common Stock is and will
continue to be listed on a domestic stock exchange and regularly
quoted by brokers and hence will be "regularly traded" on an
established securities market at the time of disposition.
However, it may be possible to read the temporary regulations
that define "regularly traded" for this purpose as providing that
the Common Stock will not be "regularly traded" for any calendar
quarter during which 100 or fewer persons (treating related
persons as one person) in the aggregate own 50% or more of the
Common Stock. If (i) this interpretation of the temporary
regulations is determined to be correct, (ii) the temporary
regulations as so interpreted are determined to be valid, and
(iii) the Company is a "United States real property holding
corporation" during the relevant time period described above, a
United States Alien Holder (without regard to its ownership
percentage of Common Stock or Notes) will be subject to United
States Federal income tax with respect to gain realized on any
sale or other disposition of the Common Stock or the Notes that
occurs within a calendar quarter during which 50% or more of the
Common Stock is so owned as well as to a withholding tax
(generally at a rate of 10% of the cash proceeds). Any amount
withheld pursuant to such withholding tax will be creditable
against such holder's United States Federal income tax liability.
Income received by a United States Alien Holder in the form
of interest on the Notes or dividends on the Common Stock will be
subject to a United States Federal withholding tax at a 30% rate
upon the actual payment of the dividends or interest except as
described above and except where an applicable tax treaty
provides for the reduction or elimination of such withholding
tax. However, a United States Alien Holder generally will be
taxed in the same manner as a United States corporation or
resident with respect to such income if it is effectively
connected with the conduct of a trade or business in the United
States. Such effectively connected income received by a United
States Alien Holder which is a corporation may in certain
circumstances be subject to an additional "branch profits tax" at
a 30% rate or, if applicable, a lower treaty rate. To determine
the applicability of a tax treaty providing for a lower rate of
withholding, dividends paid to an address in a foreign country
are presumed under current Treasury regulations to be paid to a
resident of that country. Treasury regulations proposed in
April 1996 would, if adopted in final form, require United States
Alien Holders to file a "withholding certificate" with the
Company's withholding agent, or, under certain circumstances, a
"qualified intermediary," to obtain the benefit of an applicable
tax treaty providing for a lower rate of withholding tax. Such
certificate would have to contain the name and address of the
holder and the basis for any reduced rate claimed. These
withholding certificates would be required for payments made
after December 31, 1997.
Dividends paid to United States Alien Holders that are
subject to the withholding tax described above will generally be
exempt from United States backup withholding tax and United
States information reporting requirements, other than reporting
of dividend payments for purposes of the withholding tax noted
above. Backup withholding and information reporting generally
will not apply to payments of interest if the certification
described above is received, provided the payor does not have
actual knowledge that the holder is a United States person.
Payment of the proceeds of the sale of the Notes or the Common
Stock to or through a United States office of a broker will be
subject to information reporting and possible backup withholding
at a rate of 31% unless the owner certifies its non-United States
status under penalties of perjury or otherwise establishes an
exemption. Payment of the proceeds of the sale of the Notes or
the Common Stock to or through a foreign office of a broker
generally will not be subject to backup withholding tax. However,
in the case of the payment of proceeds from the disposition of
the Notes or the Common Stock through a foreign office of a
broker that is (i) a United States person, (ii) a "controlled
foreign corporation" for United States Federal income tax
purposes, or (iii) a foreign person 50% or more of whose gross
income from all sources for a specified period is derived from
activities that are effectively connected with the conduct of a
United States trade or business, information reporting is
required on the payment unless the broker has documentary
evidence in its files that the owner is a non-United States
person and the broker has no actual knowledge to the contrary.
Any amounts withheld under the backup withholding rules from a
payment to a United States Alien Holder will be allowed as a
refund or a credit against such United States Alien Holder's
United States Federal income tax, provided that the required
information is furnished to the Internal Revenue Service.
The backup withholding and information reporting rules would
also be changed by the Treasury regulations proposed in
April 1996. These regulations, if adopted in final form, would
provide that proceeds from the disposition of Common Stock after
December 31, 1997 would be exempt from backup withholding and
information reporting only if the United States Alien Holder
complies with the "withholding certificate" requirements
described above or otherwise establishes an exemption.
Notes held by an individual who at the time of death is not
a United States citizen or resident, as specially defined for
United States estate tax purposes, will not be subject to United
States Federal estate tax provided (i) the Notes were not held in
connection with a United States trade or business and (ii) the
individual does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of the
Company entitled to vote. Common Stock owned by such an
individual at the time of death, and in certain circumstances
transferred before death, will be includible in the taxable
estate and may be subject to United States Federal estate tax
unless otherwise provided by an applicable tax treaty. Estates of
nonresident aliens are generally allowed a statutory credit which
has the effect of offsetting United States Federal estate tax
imposed on the first $60,000 of the taxable estate.
26
SELLING SECURITYHOLDERS
The Notes were originally acquired on July 8, 1996 from
the Company by the Initial Purchaser. The Initial Purchaser
advised the Company that the Initial Purchaser has resold the
Notes in transactions exempt from the registration requirements
of the Securities Act to "qualified institutional buyers" (as
defined in Rule 144A of the Securities Act), certain
institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3), or (7) under the Securities Act) and outside
the United States to non-U.S. persons in offshore transactions in
reliance on Regulation S under the Securities Act. These
subsequent purchasers, or their transferees, pledgees, donees or
successors, may from time to time offer and sell any or all of
the Notes and/or Shares pursuant to this Prospectus.
The Notes and the Shares have been registered pursuant to
the Registration Rights Agreement which provides that the Company
file a registration statement with regard to the Notes and the
Shares within 90 days of the date of original issuance of the
Notes and keep such registration statement effective until the
earlier of (i) the sale pursuant to the registration statement of
all the securities registered thereunder and (ii) the expiration
of the holding period applicable to such securities under Rule
144(k) under the Securities Act or any successor provision.
Although none of the Selling Securityholders has advised the
Company that it currently intends to sell all or any of the Notes
or Shares pursuant to this Prospectus, the Selling
Securityholders may choose to sell the Notes and/or Shares from
time to time upon notice to the Company. See "Plan of
Distribution."
Prior to any use of this Prospectus in connection with an
offering of the Notes and/or Shares, this Prospectus will be
supplemented to set forth the name and number of shares
beneficially owned by the Selling Securityholder intending to
sell such Notes and/or Shares and the number of Notes and/or
Shares to be offered. The Prospectus Supplement will also
disclose whether any Selling Securityholder selling in connection
with such Prospectus Supplement has held any position or office
with, been employed by or otherwise has had a material
relationship with, the Company or any of its affiliates during
the three years prior to the date of the Prospectus Supplement.
27
PLAN OF DISTRIBUTION
The Notes and the Shares are being registered to permit
public secondary trading of such securities by the holders
thereof from time to time after the date of this Prospectus. The
Company has agreed, among other things, to bear all expenses
(other than underwriting discounts and selling commissions and
fees and expenses of counsel and other advisors to holders of the
Notes and the underlying Common Stock) in connection with the
registration and sale of the Notes and the Shares covered by this
Prospectus.
The Company will not receive any of the proceeds from the
offering of Notes and the Shares by the Selling Securityholders.
The Selling Securityholders may sell all or a portion of the
Notes and Shares beneficially owned by them and offered hereby
from time to time on any exchange on which the securities are
listed on terms to be determined at the times of such sales. The
Selling Securityholders may also make private sales directly or
through a broker or brokers. Alternatively, any of the Selling
Securityholders may from time to time offer the Notes or shares
of Common Stock beneficially owned by them through underwriters,
dealers or agents, who may receive compensation in the form of
underwriting discounts, commissions or concessions from the
Selling Securityholders and the purchasers of the Notes or shares
of Common Stock for whom they may act as agent. The aggregate
proceeds to the Selling Securityholders from the sale of the
Notes or shares of Common Stock offered by them hereby will be
the purchase price of such Notes or shares of Common Stock less
discounts and commissions, if any.
The Notes and the Shares may be sold from time to time in
one or more transactions at fixed offering prices, which may be
changed, or at varying prices determined at the time of sale or
at negotiated prices. Such prices will be determined by the
holders of such securities or by agreement between such holders
and underwriters or dealers who may receive fees or commissions
in connection therewith.
The outstanding Common Stock is publicly traded on the
Nasdaq National Market, and the Shares have been approved for
trading on the Nasdaq National Market. The Initial Purchaser has
advised the Company that it is making and currently intends to
continue making a market in the Notes; however, it is not
obligated to do so and any such market-making may be discontinued
at any time without notice, in the sole discretion of the Initial
Purchaser. The Company does not intend to apply for listing of
the Notes on any securities exchange. Accordingly, no assurance
can be given as to the development or liquidity of any trading
market that may develop for the Notes. See "Risk Factors C
Absence of Public Market for the Notes."
In order to comply with the securities laws of certain
states, if applicable, the Notes and Shares will be sold in such
jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the Notes and Shares may
not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the
registration or qualification requirement is available and is
complied with.
The Selling Securityholders and any broker-dealers, agents
or underwriters that participate with the Selling Securityholders
in the distribution of the Notes or the Shares may be deemed to
be "underwriters" within the meaning of the Securities Act, in
which event any commissions received by such broker-dealers,
agents or underwriters and any profits realized by the Selling
Securityholders on the resales of the Notes or the Shares
purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
In addition, any securities covered by this Prospectus which
qualify for sale pursuant to Rule 144, Rule 144A or any other
available exemption from registration under the Securities Act
may be sold under Rule 144, Rule 144A or such other available
exemption rather than pursuant to this Prospectus. There is no
assurance that any Selling Securityholder will sell any or all of
the Notes or Shares described herein, and any Selling
Securityholder may transfer, devise or gift such securities by
other means not described herein.
28
The Notes were originally sold by the Company to the Initial
Purchaser in July 1996 in a private placement. The Company
agreed to indemnify and hold the Initial Purchaser harmless
against certain liabilities under the Securities Act that could
arise in connection with the sale of the Notes by the Initial
Purchaser. The Registration Rights Agreement provides for the
Company and the Selling Securityholders to indemnify each other
against certain liabilities arising under the Securities Act.
The Company has agreed to use its best efforts to cause the
registration statement to which this Prospectus relates to become
effective as promptly as is practicable and to keep the
registration statement effective until the earlier of (i) the
sale pursuant to the registration statement of all the securities
registered thereunder and (ii) the expiration of the holding
period applicable to such securities under Rule 144(k) under the
Securities Act or any successor provision. The Registration
Rights Agreement provides that the Company may suspend the use of
this Prospectus in connection with sales of Notes and Shares by
holders for a period not to exceed 30 days in any three-month
period, or not to exceed an aggregate of 60 days in any 12-month
period, under certain circumstances relating to pending corporate
developments, public filings with the Commission and similar
events. Expenses of preparing and filing the registration
statement and all post-effective amendments will be borne by the
Company.
LEGAL MATTERS
The validity of the Notes and the underlying Common Stock
will be passed upon for the Company by Dewey Ballantine, New
York, New York.
EXPERTS
The balance sheets of the Company as of December 31, 1994
and 1995 and the statements of operations, shareholders' equity
and cash flows for each of the three years in the period ended
December 31, 1995, included in the Company's 1995 Annual Report
to Shareholders, which have been incorporated by reference in
this Prospectus, have been audited by Coopers & Lybrand L.L.P.,
independent public accountants, as set forth in their report
dated February 6, 1996, accompanying such financial statements,
and are incorporated herein by reference in reliance upon the
report of such firm, which report is given on the authority of
said firm as experts in accounting and auditing.
Any financial statements and schedules hereafter
incorporated by reference in the registration statement of which
this Prospectus is a part that have been audited and are the
subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon
the authority of such firms as experts in accounting and auditing
to the extent covered by consents filed with the Commission.
29
No person is authorized in
connection with any offering made
hereby to give any information or to
make any representation not contained MedImmune, Inc.
in this Prospectus, and, if given or
made, such information or
representation must not be relied upon $60,000,000 Principal Amount
as having been authorized by the of
Company. This Prospectus does not 7% Convertible Subordinated
constitute an offer to sell or a Notes
solicitation of an offer to buy any due 2003
security other than the Notes or the
shares of Common Stock offered hereby,
nor does it constitute an offer to
sell or a solicitation of an offer to 3,048,780 Shares of
buy any of the securities offered Common Stock
hereby to any person in any
jurisdiction in which it is unlawful
to make such an offer or solicitation.
Neither the delivery of this
Prospectus nor any sale made hereunder
shall under any circumstances create
any implication that the information
contained herein is correct as of any
date subsequent to the date hereof.
___________________ _____________________________
PROSPECTUS
___________, 1996
____________________________
TABLE OF CONTENTS
Page
Available Information 2
Incorporation of Certain
Documents by Reference 2
The Company 3
Risk Factors 3
Use of Proceeds 9
Ratio of Earnings to
Fixed Charges 9
Description of Notes 10
Description of Capital
Stock 20
Certain Federal Income
Tax Considerations 23
Selling Securityholders 27
Plan of Distribution 28
Legal Matters 29
Experts 29
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Registrant in
connection with the distribution of the securities being
registered are as follows:
SEC Registration Fee $ 20,690
Nasdaq National Market Listing Fee 17,500
Accounting Fees and Expenses 20,000
Legal Fees and Expenses 25,000
Blue Sky Fees and Expenses 5,000
Miscellaneous
11,810
Total $100,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law
of the State of Delaware (the "DGCL") empowers a corporation to
indemnify any person who was or is a party or who is threatened
to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is
or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that such person acted in any
of the capacities set forth above, against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit
if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation,
except that no indemnification may be made in respect of any
claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the
extent that the Delaware Court of Chancery or the court in which
such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the
Delaware Court of Chancery or such other court shall deem proper.
Section 145 further provides that to the extent a director,
officer, employee or agent of a corporation has been successful
on the merits or otherwise in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) of Section 145,
or in defense of any claim, issue or matter therein, he shall be
indemnified
II-1
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may
be entitled; that indemnification provided for by Section 145
shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of such person's
heirs, executors and administrators; and that the corporation is
empowered to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of
the corporation against any liability asserted against him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the
power to indemnify him against such liability under Section 145.
The Company also provides liability insurance for its
directors and officers which provides for coverage against loss
from claims made against directors and officers in their capacity
as such, including liabilities under the Securities Act of 1933,
as amended.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the
personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as
a director, provided that such provision shall not eliminate or
limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal
benefit. Article EIGHTH of the Company's Restated Certificate of
Incorporation limits the liability of directors to the fullest
extent permitted by Section 102(b)(7).
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
4.1 Form of Common Stock certificate(1)
4.2 Indenture dated as of July 8, 1996 between
the Company and Norwest Bank Minnesota, National
Association
4.3 Form of Note (included in Exhibit 4.2)
4.4 Registration Rights Agreement dated as of
July 8, 1996 between the Company and Morgan Stanley
& Co. Incorporated
5.1 Opinion of Dewey Ballantine
12.1 Statement re: calculation of ratio of
earnings to fixed charges
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Dewey Ballantine (included in
Exhibit 5.1)
24.1 Power of Attorney (included on page II-4)
25.1 Statement of Eligibility of the Trustee on
Form T-1
_________________
(1) Filed as an exhibit to the Company's Registration Statement
on Form S-1 (No. 33-39579) and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding)
II-2
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i)To include any prospectus required by section
10(a)(3) of the Securities Act of 1933, as amended;
(ii)To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement.
Provided, however, That paragraphs (1)(i) and (1)(ii) of
this section do not apply if the registration statement is on
Form S-3, Form S-8 or Form F-3, and the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, as amended, each such post-
effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) For purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Gaithersburg, State of Maryland, on the 3rd day of
October, 1996.
MEDIMMUNE, INC.
By: Wayne T. Hockmeyer, Ph.D.
Chairman and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby severally constitutes and appoints
Wayne T. Hockmeyer, Ph.D. and David M. Mott, and each of them,
his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution for him and in his name, place
and stead, in any and all capacities to sign any and all
amendments (including post-effective amendments) to the
Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-
in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or
necessary fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that each said
attorneys-in-fact and agents or any of them or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
/s/Wayne T. Hockmeyer, Ph.D. Chairman, Chief October 3, 1996
Executive Officer and
Director (Principal
/s/David M. Mott President, Chief October 3, 1996
Operating Officer and
Director
(Principal Financial
and Accounting Officer)
/s/Franklin H. Top, Jr., M.D. Executive Vice October 3, 1996
President, Medical
Director and Director
/s/M. James Barrett, Ph.D. Director October 3, 1996
/s/Barbara Hackman Franklin Director October 3, 1996
/s/James H. Cavanaugh, Ph.D. Director October 3, 1996
/s/Lawrence C. Hoff Director October 3, 1996
/s/Gordon S. Macklin Director October 3, 1996
II-4
EXHIBIT 4.2
[CONFORMED COPY]
MEDIMMUNE, INC.
TO
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
INDENTURE
Dated as of July 8, 1996
7% Convertible Subordinated Notes due 2003
MEDIMMUNE, INC.
Reconciliation and Tie Between the Trust Indenture Act
of 1939 and Indenture dated as of July 8, 1996
Trust Indenture Indenture
Act Section Section
Section 310(a)(1) 8.9
Section (a)(2) 8.9
Section (a)(3) Not Applicable
Section (a)(4) Not Applicable
Section (a)(5) 8.9
Section (b) 8.8
8.9
8.10
8.11
Section 311(a)
(b)
(b)(2) 6.3(a)
Section 312(a) 6.1
6.2(a)
(b) 6.2(b)
(c) 6.2(c)
Section 313(a) 6.3(a)
(b) 6.3(a)
(c) 6.3(a)
(d) 6.3(b)
Section 314(a)
(b) Not Applicable
(c)(1) 16.5
(c)(2) 16.5
(c)(3) Not Applicable
(d) Not Applicable
(e) 16.5
Section 315(a) 8.1
(b) 7.8
(c) 8.1
(d) 8.1
(d)(1) 8.1(a)
(d)(2) 8.1(b)
(d)(3) 8.1(c)
(e) 7.9
Section 316(a) 7.7
(a)(1)(A) 7.7
(a)(1)(B) 7.7
(a)(2) Not Applicable
(b) 7.4
Section 317(a)(1) 7.5
(a)(2) 7.5
(b) 5.4
Section 318(a) 16.7
_________________________
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definition 1
Affiliate 2
Applicable Price 2
Board of Directors 2
Closing Price 2
Commission 2
Common Stock 3
Company 3
Conversion Price 3
Corporate Trust Office 3
Custodian 3
default 3
Depositary 3
Designated Senior Indebtedness 4
Exchange Act 4
Event of Default 4
Fundamental Change 4
Indebtedness 4
Indenture 5
Initial Purchaser 5
Note or Notes 5
Noteholder or holder 5
Note register 5
Officers' Certificate 5
Opinion of Counsel 6
outstanding 6
Payment Blockage Notice 6
Person 6
PORTAL Market 6
Predecessor Note 6
QIB 7
Reference Market Price 7
Registration Rights Agreement 7
Regulation S 7
Representative 7
Responsible Officer 7
Restricted Securities 7
Rule 144A 7
Securities Act 7
Senior Indebtedness 8
Subsidiary 8
Trading Day 8
Trigger Event 8
Trust Indenture Act 8
Trustee 9
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 Designation Amount and
Issue of Notes 9
Section 2.2 Form of Notes 9
Section 2.3 Date and Denomination of
Notes; Payments of Interest 10
Section 2.4 Execution of Notes 12
Section 2.5 Exchange and Registration
of Transfer of Notes:
Restrictions on
Transfer; Depositary 12
Section 2.6 Mutilated, Destroyed, Lost
or Stolen Notes 21
Section 2.7 Temporary Notes 22
Section 2.8 Cancellation of Notes
Paid, Etc. 22
ARTICLE III
REDEMPTION OF NOTES
Section 3.1 Redemption Prices 23
Section 3.2 Notice of Redemption;
Selection of Notes 23
Section 3.3 Payment of Notes
Called for Redemption 24
Section 3.4 Conversion Arrangement
on Call for Redemption 25
Section 3.5 Redemption at Option
of Holders 26
ARTICLE IV
SUBORDINATION OF NOTES
Section 4.1 Agreement of Subordination 28
Section 4.2 Payments to Noteholders 29
Section 4.3 Subrogation of Notes 32
Section 4.4 Authorization to Effect
Subordination 33
Section 4.5 Notice to Trustee 33
Section 4.6 Trustee's Relation to
Senior Indebtedness 34
Section 4.7 No Impairment of Subordination 34
Section 4.8 Certain Conversions Deemed
Payment 34
Section 4.9 Article Applicable to
Paying Agents 35
Section 4.10 Senior Indebtedness Entitled
to Rely 35
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium
and Interest 35
Section 5.2 Maintenance of Office or Agency 36
Section 5.3 Appointments to Fill Vacancies
in Trustee's Office 36
Section 5.4 Provisions as to Paying Agent 36
Section 5.5 Corporate Existence 38
Section 5.6 Rule 144A Information Requirement 38
Section 5.7 Stay, Extension and Usury Laws 38
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1 Noteholders' Lists 39
Section 6.2 Preservation and Disclosure
of Lists 39
Section 6.3 Reports by Trustee 39
Section 6.4 Reports by Company 40
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT
Section 7.1 Events of Default 40
Section 7.2 Payments of Notes on
Default; Suit Therefor 42
Section 7.3 Application of Monies Collected
by Trustee 44
Section 7.4 Proceedings by Noteholder 44
Section 7.5 Proceedings by Trustee 45
Section 7.6 Remedies Cumulative and Continuing 46
Section 7.7 Direction of Proceedings and
Waiver of Defaults by Majority
of Noteholders 46
Section 7.8 Notice of Defaults 46
Section 7.9 Undertaking to Pay Costs 47
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities
of Trustee 47
Section 8.2 Reliance on Documents,
Opinions, Etc. 49
Section 8.3 No Responsibility for
Recitals, Etc. 50
Section 8.4 Trustee, Paying Agents,
Conversion Agents or Registrar
May Own Notes 50
Section 8.5 Monies to Be Held in Trust 50
Section 8.6 Compensation and Expenses
of Trustee 50
Section 8.7 Officers' Certificate as Evidence 51
Section 8.8 Conflicting Interests of Trustee 51
Section 8.9 Eligibility of Trustee 51
Section 8.10 Resignation or Removal of Trustee 51
Section 8.11 Acceptance by Successor Trustee 53
Section 8.12 Succession by Merger, Etc. 53
Section 8.13 Limitation on Rights of Trustee as
Creditor 54
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1 Action by Noteholders 54
Section 9.2 Proof of Execution by Noteholders 54
Section 9.3 Who Are Deemed Absolute Owners 55
Section 9.4 Company-Owned Notes Disregarded 55
Section 9.5 Revocation of Consents; Future
Holders Bound 55
ARTICLE X
NOTEHOLDERS' MEETINGS
Section 10.1 Purpose of Meetings 56
Section 10.2 Call of Meetings by Trustee 56
Section 10.3 Call of Meetings by Company or
Noteholders 57
Section 10.4 Qualifications for Voting 57
Section 10.5 Relations 57
Section 10.6 Voting 58
Section 10.7 No Delay of Rights by Meeting 58
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 Supplemental Indentures Without
Consent of Noteholders 59
Section 11.2 Supplemental Indentures with
Consent of Noteholders 60
Section 11.3 Effect of Supplemental Indenture 61
Section 11.4 Notation on Notes 61
Section 11.5 Evidence of Compliance of
Supplemental Indenture to
Be Furnished Trustee 62
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 Company May Consolidate Etc.
on Certain Terms 62
Section 12.2 Successor Corporation to
Be Substituted 62
Section 12.3 Opinion of Counsel to Be
Given Trustee 63
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture 63
Section 13.2 Deposited Monies to Be Held in
Trust by Trustee 64
Section 13.3 Paying Agent to Repay Monies Held 64
Section 13.4 Return of Unclaimed Monies 64
Section 13.5 Reinstatement 65
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 Indenture and Notes Solely
Corporate Obligations 65
ARTICLE XV
CONVERSION OF NOTES
Section 15.1 Right to Convert 65
Section 15.2 Exercise of Conversion Privilege;
Issuance of Common Stock on
Conversion; No Adjustment for
Interest or Dividends 66
Section 15.3 Cash Payments in Lieu of
Fractional Shares 68
Section 15.4 Conversion Price 68
Section 15.5 Adjustment of Conversion Price 68
Section 15.6 Effect of Reclassification,
Consolidation, Merger or Sale 79
Section 15.7 Taxes on Shares Issued 80
Section 15.8 Reservation of Shares; Shares
to Be Fully Paid; Compliance with
Governmental Requirements; Listing
of Common Stock 80
Section 15.9 Responsibility of Trustee 81
Section 15.10 Notice to Holders Prior to
Certain Actions 82
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's
Successors 83
Section 16.2 Official Acts by Successor
Corporation 83
Section 16.3 Addresses for Notices, Etc 83
Section 16.4 Governing Law 83
Section 16.5 Evidence of Compliance with
Conditions Precedent;
Certificates to Trustee 84
Section 16.6 Legal Holidays 84
Section 16.7 Trust Indenture Act 84
Section 16.8 No Security Interest Created 84
Section 16.9 Benefits of Indenture 85
Section 16.10 Table of Contents, Headings, Etc. 85
Section 16.11 Authenticating Agent 85
Section 16.12 Execution in Counterparts 86
INDENTURE dated as of July 8, 1996, between MedImmune, Inc., a
Delaware corporation (hereinafter sometimes called the "Company",
as more fully set forth in Section 1.1), and Norwest Bank
Minnesota, National Association, a national banking association
duly organized and existing under the laws of the United States,
as trustee hereunder (hereinafter sometimes called the "Trustee",
as more fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issue of its 7% Convertible Subordinated
Notes due 2003 (hereinafter sometimes called the "Notes"), in an
aggregate principal amount not to exceed $69,000,000 and, to
provide the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be
borne by the Notes, a form of assignment, a form of option to
elect repayment upon a Fundamental Change, a form of conversion
notice and a certificate of transfer to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when
executed by the Company and authenticated and delivered by the
Trustee or a duly authorized authenticating agent, as in this
Indenture provided, the valid, binding and legal obligations of
the Company, and to constitute these presents a valid agreement
according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes
have in all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Notes are, and are to be, authenticated, issued and
delivered, and in consideration of the premises and of the
purchase and acceptance of the Notes by the holders thereof, the
Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time
of the Notes (except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The terms defined in this Section
1.1 (except as herein otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture
and of any indenture supplemental hereto shall have the
respective meanings
1
specified in this Section 1.1. All other terms used in this
Indenture that are defined in the Trust Indenture Act or which
are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context
otherwise requires) shall have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as
in force at the date of the execution of this Indenture. The
words "herein," "hereof," "hereunder," and words of similar
import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision. The terms
defined in this Article include the plural as well as the
singular.
Affiliate: The term "Affiliate" of any specified Person
shall mean 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.
Applicable Price: The term "Applicable Price" shall mean
(i) in the event of a Fundamental Change in which the holders of
the Common Stock receive only cash, the amount of cash received
by the holder of one share of Common Stock and (ii) in the event
of any other Fundamental Change, the arithmetic average of the
Closing Price for the Common Stock (determined as set forth in
Section 15.5(i)) during the ten Trading Days (as defined in
Section 15.5(i)) prior to the record date for the determination
of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such
Fundamental Change, or, if there is no such record date, the date
upon which the holders of the Common Stock shall have the right
to receive such cash, securities, property or other assets in
connection with the Fundamental Change.
Board of Directors: The term "Board of Directors" shall
mean the Board of Directors of the Company or a committee of such
Board duly authorized to act for it hereunder.
Business Day: The term "Business Day" means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on
which the banking institutions in The City of New York or the
city in which the Corporate Trust Office is located are
authorized or obligated by law or executive order to close or be
closed.
Closing Price: The term "Closing Price" shall have the
meaning specified in Section 15.5(i)(1).
Commission: The term "Commission" shall mean the Securities
and Exchange Commission.
2
Common Stock: The term "Common Stock" shall mean any stock
of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject
to the provisions of Section 15.6, however, shares issuable on
conversion of Notes shall include only shares of the class
designated as common stock of the Company at the date of this
Indenture or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no
preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption
by the Company; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
Company: The term "Company" shall mean MedImmune, Inc., a
Delaware corporation, and subject to the provisions of Article
XII, shall include its successors and assigns.
Conversion Price: The term "Conversion Price" shall have the
meaning specified in Section 15.4.
Corporate Trust Office: The term "Corporate Trust Office"
or other similar term, shall mean the principal office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office is, at
the date as of which this Indenture is dated, located at Norwest
Center, Sixth and Marquette, Minneapolis, MN 55479-0069,
Attention: Corporate Trust Office.
Custodian: The term "Custodian" shall mean Norwest Bank
Minnesota, National Association, as custodian with respect to the
Notes in global form, or any successor entity thereto.
default: The term "default" shall mean any event that is,
or after notice or passage of time, or both, would be, an Event
of Default.
Depositary: The term "Depositary" means, with respect to
the Notes issuable or issued in whole or in part in global form,
the person specified in Section 2.5(d) as the Depositary with
respect to such Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or
include such successor.
3
Designated Senior Indebtedness: The term "Designated Senior
Indebtedness" means any particular Senior Indebtedness in which
the instrument creating or evidencing the same or the assumption
or guarantee thereof (or related agreements or documents to which
the Company is a party) expressly provides that such Senior
Indebtedness shall be "Designated Senior Indebtedness" for
purposes of the Indenture (provided that such instrument,
agreement or other document may place limitations and conditions
on the right of such Senior Indebtedness to exercise the rights
of Designated Senior Indebtedness). If any payment made to any
holder of any Designated Senior Indebtedness or its
Representative with respect to such Designated Senior
Indebtedness is rescinded or must otherwise be returned by such
holder or Representative upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, the reinstated
Indebtedness of the Company arising as a result of such
rescission or return shall constitute Designated Senior
Indebtedness effective as of the date of such rescission or
return.
Exchange Act: The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, as in effect from time to
time.
Event of Default: The term "Event of Default" shall mean
any event specified in Section 7.1(a), (b), (c), (d) or (e).
Fundamental Change: The term "Fundamental Change" means the
occurrence of any transaction or event in connection with which
all or substantially all the Common Stock shall be exchanged for,
converted into, acquired for or constitute the right to receive
consideration (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) which is not all
or substantially all common stock which is (or, upon consummation
of or immediately following such transaction or event, will be)
listed on a United States national securities exchange or
approved for quotation on the Nasdaq National Market or any
similar United States system of automated dissemination of
quotations of securities prices.
Indebtedness: The term "Indebtedness" means, with respect
to any Person, and without duplication, (a) all indebtedness,
obligations and other liabilities (contingent or otherwise) of
such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts,
currency exchange agreements, interest rate protection
agreements, and any loans or advances from banks, whether or not
evidenced by notes or similar instruments) or evidenced by bonds,
debentures, notes or similar instruments (whether or not the
recourse of the lender is to the whole of the assets of such
Person or to only a portion thereof) (other than any account
payable or other accrued current liability or obligation incurred
in the ordinary course of business in connection with the
obtaining of materials or services), (b) all reimbursement
obligations and other liabilities (contingent or otherwise) of
such Person with respect to letters of credit, bank guarantees or
4
bankers' acceptances, (c) all obligations and liabilities
(contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease obligations
on the balance sheet of such Person and all obligations and other
liabilities (contingent or otherwise) under any lease or related
document (including a purchase agreement) in connection with the
lease of real property which provides that such Person is
contractually obligated to purchase or cause a third party to
purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the lessor and the
obligations of such Person under such lease or related document
to purchase or to cause a third party to purchase such leased
property, (d) all obligations of such Person (contingent or
otherwise) with respect to an interest rate or other swap, cap or
collar agreement or other similar instrument or agreement or
foreign currency hedge, exchange, purchase or similar instrument
or agreement, (e) all direct or indirect guaranties or similar
agreements by such Person in respect of, and obligations or
liabilities (contingent or otherwise) of such Person to purchase
or otherwise acquire or otherwise assure a creditor against loss
in respect of indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d), (f) any
indebtedness or other obligations described in clauses (a)
through (d) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by such
Person, regardless of whether the indebtedness or other
obligation secured thereby shall have been assumed by such Person
and (g) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
Indenture: The term "Indenture" shall mean this instrument
as originally executed or, if amended or supplemented as herein
provided, as so amended or supplemented.
Initial Purchaser: The term "Initial Purchaser" means
Morgan Stanley & Co. Incorporated.
Note or Notes: The terms "Note" or "Notes" shall mean any
Note or Notes, as the case may be, authenticated and delivered
under this Indenture, including the 144A Global Note and the
Regulation S Global Note.
Noteholder or holder: The terms "Noteholder" or "holder" as
applied to any Note, or other similar terms (but excluding the
term "beneficial holder"), shall mean any person in whose name at
the time a particular Note is registered on the Note registrar's
books.
Note register: The term "Note register" shall have the
meaning specified in Section 2.5.
Officers' Certificate: The term "Officers' Certificate,"
when used with respect to the Company, shall mean a certificate
signed by both (a) the President, the Chief Executive
5
Officer, Executive or Senior Vice President or any Vice President
(whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and (b)
by the Treasurer or any Assistant Treasurer or Secretary or any
Assistant Secretary of the Company.
Opinion of Counsel: The term "Opinion of Counsel" shall
mean an opinion in writing signed by legal counsel, who may be an
employee of or counsel to the Company, or other counsel
acceptable to the Trustee.
outstanding: The term "outstanding," when used with
reference to Notes, shall, subject to the provisions of Section
9.4, mean, as of any particular time, all Notes authenticated and
delivered by the Trustee under this Indenture, except
(a) Notes theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Notes, or portions thereof, (i) for the redemption
of which monies in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent
(other than the Company) or (ii) which shall have been
otherwise defeased in accordance with Article XIII;
(c) Notes in lieu of which, or in substitution for
which, other Notes shall have been authenticated and
delivered pursuant to the terms of Section 2.6; and
(d) Notes converted into Common Stock pursuant to
Article XV and Notes deemed not outstanding pursuant to
Article III.
Payment Blockage Notice: The term "Payment Blockage Notice"
has the meaning specified in Section 4.2.
Person: The term "Person" shall mean a corporation, an
association, a partnership, an individual, a joint venture, a
joint stock company, a trust, an unincorporated organization or a
government or an agency or a political subdivision thereof.
PORTAL Market: The term "PORTAL Market" shall mean the
Private Offerings, Resales and Trading through Automated Linkages
Market operated by the National Association of Securities
Dealers, Inc. or any successor thereto.
Predecessor Note: The term "Predecessor Note" of any
particular Note shall mean every previous Note evidencing all or
a portion of the same debt as that evidenced by such particular
Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.6 in lieu of a lost,
destroyed or stolen Note shall be deemed to evidence the
6
same debt as the lost, destroyed or stolen Note that it
replaces.
QIB: The term "QIB" shall mean a "qualified institutional
buyer" as defined in Rule 144A.
Reference Market Price: The term "Reference Market Price"
shall initially mean $10.67 and in the event of any adjustment to
the Conversion Price pursuant to Sections 15.5(a), (b), (c), (d),
(e), (f), (g) or (h) the Reference Market Price shall also be
adjusted so that the ratio of the Reference Market Price to the
Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of $10.67 to the initial
Conversion Price specified in the form of Note attached hereto
(without regard to any adjustment thereto).
Registration Rights Agreement: The term "Registration
Rights Agreement" means that certain Registration Rights
Agreement, dated as of July 8, 1996, between the Company and the
Initial Purchaser.
Regulation S: The term "Regulation S" shall mean Regulation
S as promulgated under the Securities Act.
Representative: The term "Representative" means the (a)
indenture trustee or other trustee, agent or representative for
any Senior Indebtedness or (b) with respect to any Senior
Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness
issued pursuant to an agreement providing for voting arrangements
as among the holders or owners of such Senior Indebtedness, any
holder or owner of such Senior Indebtedness acting with the
consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all
other such Senior Indebtedness, the holder or owner of such
Senior Indebtedness.
Responsible Officer: The term "Responsible Officer," when
used with respect to the Trustee, shall mean an officer of the
Trustee in the Corporate Trust Office assigned and duly
authorized by the Trustee to administer its corporate trust
matters.
Restricted Securities: The term "Restricted Securities" has
the meaning specified in Section 2.5.
Rule 144A: The term "Rule 144A" shall mean Rule 144A as
promulgated under the Securities Act.
Securities Act: The term "Securities Act" shall mean the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
7
Senior Indebtedness: The term "Senior Indebtedness" means
the principal of, premium, if any, interest (including all
interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for
post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or in connection with, and all
fees, costs, expenses and other amounts accrued or due on or in
connection with, Indebtedness of the Company, whether outstanding
on the date of this Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company
(including all deferrals, renewals, extensions or refundings of,
or amendments, modifications or supplements to, the foregoing),
unless in the case of any particular Indebtedness the instrument
creating or evidencing the same or the assumption or guarantee
thereof expressly provides that such Indebtedness shall not be
senior in right of payment to the Notes or expressly provides
that such Indebtedness is "pari passu" or "junior" to the Notes.
Notwithstanding the foregoing, the term Senior Indebtedness shall
not include any Indebtedness of the Company to any subsidiary of
the Company, a majority of the voting stock of which is owned,
directly or indirectly, by the Company. If any payment made to
any holder of any Senior Indebtedness or its Representative with
respect to such Senior Indebtedness is rescinded or must
otherwise be returned by such holder or Representative upon the
insolvency, bankruptcy or reorganization of the Company or
otherwise, the reinstated Indebtedness of the Company arising as
a result of such rescission or return shall constitute Senior
Indebtedness effective as of the date of such rescission or
return.
Subsidiary: The term "Subsidiary" means, with respect to
any person, (i) any corporation, association or other business
entity of which more than 50% of the total voting power of shares
of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly
or indirectly, by such person or one or more of the other
subsidiaries of that person (or a combination thereof) and (ii)
any partnership (a) the sole general partner or managing general
partner of which is such person or a subsidiary of such person or
(b) the only general partners of which are such person or of one
or more subsidiaries of such person (or any combination thereof).
Trading Day: The term "Trading Day" shall have the meaning
specified in Section 15.5(i)(5).
Trigger Event: The term "Trigger Event" shall have the
meaning specified in Section 15.5(d).
Trust Indenture Act: The term "Trust Indenture Act" shall
mean the Trust Indenture Act of 1939, as amended, as it was in
force at the date of execution of this Indenture, except as
provided in Sections 11.3 and 15.6; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after the
date hereof, the term "Trust Indenture Act" shall mean, to the
extent required by such amendment, the Trust Indenture Act of
1939 as so
8
amended.
Trustee: The term "Trustee" shall mean Norwest Bank
Minnesota, National Association and its successors and any
corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee
hereunder.
The definitions of certain other terms are as specified in
Sections 2.5 and 3.5 and Article XV.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 Designation Amount and Issue of Notes. The
Notes shall be designated as "7% Convertible Subordinated Notes
due 2003." Notes not to exceed the aggregate principal amount of
$60,000,000 (or $69,000,000 if the over-allotment option set
forth in Section 7 of the Placement Agreement dated July 1, 1996
(as amended from time to time by the parties thereto) by and
between the Company and the Initial Purchaser is exercised in
full) (except pursuant to Sections 2.5, 2.6, 3.3, 3.5 and 15.2
hereof) upon the execution of this Indenture, or from time to
time thereafter, may be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order
of the Company, signed by its (a) Chief Executive Officer,
President, Executive or Senior Vice President or any Vice
President (whether or not designated by a number or numbers or
word or words added before or after the title "Vice President")
and (b) Treasurer or Assistant Treasurer or its Secretary or any
Assistant Secretary, without any further action by the Company
hereunder.
Section 2.2 Form of Notes. The Notes and the Trustee's
certificate of authentication to be borne by such Notes shall be
substantially in the form set forth in Exhibit A, which is
incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other
marks of identification and such notations, legends and
endorsements as the officers executing the same may approve
(execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange or automated quotation
system on which the Notes may be listed, or to conform to usage.
9
Any Note in global form shall represent such of the
outstanding Notes as shall be specified therein and shall provide
that it shall represent the aggregate amount of outstanding Notes
from time to time endorsed thereon and that the aggregate amount
of outstanding Notes represented thereby may from time to time be
increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the
amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the holder of such Notes in accordance
with this Indenture. Payment of principal of and interest and
premium, if any, on any Note in global form shall be made to the
holder of such Note.
The terms and provisions contained in the form of Note
attached as Exhibit A hereto shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.3 Date and Denomination of Notes; Payments of
Interest. The Notes shall be issuable in registered form without
coupons in denominations of $1,000 principal amount and integral
multiples thereof. Every Note shall be dated the date of its
authentication and shall bear interest from the applicable date
in each case as specified on the face of the form of Note
attached as Exhibit A hereto. Interest on the Notes shall be
computed on the basis of a 360-day year comprised of twelve
30-day months.
The person in whose name any Note (or its Predecessor Note)
is registered on the Note register at the close of business on
any record date with respect to any interest payment date shall
be entitled to receive the interest payable on such interest
payment date, except (i) that the interest payable upon
redemption (unless the date of redemption is an interest payment
date) will be payable to the person to whom principal is payable
and (ii) as set forth in the next succeeding sentence. In the
case of any Note (or portion thereof) which is converted into
Common Stock of the Company during the period from (but
excluding) a record date to (but excluding) the next succeeding
interest payment date either (i) if such Note (or portion
thereof) has been called for redemption on a redemption date
which occurs during such period, or is to be redeemed in
connection with a Fundamental Change on a Repurchase Date (as
defined in Section 3.5) which occurs during such period, the
Company shall not be required to pay interest on such interest
payment date in respect of any such Note (or portion thereof)
except to the extent required to be paid upon redemption of such
Note or portion thereof pursuant to Section 3.3 or 3.5 hereof or
(ii) if otherwise, any Note (or portion thereof) submitted for
conversion during such period shall be accompanied by funds equal
to the interest payable on such succeeding interest payment date
on the principal amount so converted. Interest may, as the
Company shall specify to the paying agent in writing by each
record date, be paid either (i) by check mailed to the address of
the person entitled thereto as it appears in the Note register or
(ii) by transfer to an account maintained
10
by such person located in the United States; provided, however,
that payments to the Depositary will be made by wire transfer of
immediately available funds to the account of the Depositary or
its nominee. The term "record date" with respect to any interest
payment date shall mean the December 15 or June 15 preceding said
January 1 or July 1, respectively.
Any interest on any Note which is payable, but is not
punctually paid or duly provided for, on any said January 1 or
July 1 (herein called "Defaulted Interest") shall forthwith cease
to be payable to the Noteholder on the relevant record date by
virtue of his having been such Noteholder; and such Defaulted
Interest shall be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below;
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Notes
(or their respective Predecessor Notes) are registered at
the close of business on a special record date for the
payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee
in writing of the amount of Defaulted Interest to be paid on
each Note and the date of the payment (which shall be not
less than twenty-five (25) days after the receipt by the
Trustee of such notice, unless the Trustee shall consent to
an earlier date), and at the same time the Company shall
deposit with the Trustee an amount of money equal to the
aggregate amount to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such
Defaulted Interest which shall be not more than fifteen (15)
days and not less than ten (10) days prior to the date of
the proposed payment and not less than ten (10) days after
the receipt by the Trustee of the notice of the proposed
payment The Trustee shall promptly notify the Company of
such special record date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment
of such Defaulted Interest and the special record date
therefor to be mailed, first-class postage prepaid, to each
Noteholder at his address as it appears in the Note
register, not less than ten (10) days prior to such special
record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor
having been so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Notes (or their respective
Predecessor Notes) were registered at the close of business
on such special record date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with
the requirements of any securities exchange or automated
quotation system on which the Notes may be listed or
designated for issuance, and upon such notice as may be
required by such exchange or automated
11
quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the
Trustee.
Section 2.4 Execution of Notes. The Notes shall be signed
in the name and on behalf of the Company by the facsimile
signature of its Chief Executive Officer, President, any
Executive or Senior Vice President or any Vice President (whether
or not designated by a number or numbers or word or words added
before or after the title "Vice President") and attested by the
facsimile signature of its Secretary or any of its Assistant
Secretaries or Treasurer or any of its Assistant Treasurers
(which may be printed, engraved or otherwise reproduced thereon,
by facsimile or otherwise). Only such Notes as shall bear
thereon a certificate of authentication substantially in the form
set forth on the form of Note attached as Exhibit A hereto,
manually executed by the Trustee (or an authenticating agent
appointed by the Trustee as provided by Section 16.11), shall be
entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee (or
such an authenticating agent) upon any Note executed by the
Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any
of the Notes shall cease to be such officer before the Notes so
signed shall have been authenticated and delivered by the
Trustee, or disposed of by the Company, such Notes nevertheless
may be authenticated and delivered or disposed of as though the
person who signed such Notes had not ceased to be such officer of
the Company; and any Note may be signed on behalf of the Company
by such persons as, at the actual date of the execution of such
Note, shall be the proper officers of the Company, although at
the date of the execution of this Indenture any such person was
not such an officer.
Section 2.5 Exchange and Registration of Transfer of Notes:
Restrictions on Transfer; Depositary
(a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained
in such office and in any other office or agency of the
Company designated pursuant to Section 5.2 being herein
sometimes collectively referred to as the "Note register")
in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of
Notes and of transfers of Notes. The Note register shall be
in written form or in any form capable of being converted
into written form within a reasonably prompt period of time.
The Trustee is hereby appointed "Note registrar" for the
purpose of registering Notes and transfers of Notes as
herein provided. The Company may appoint one or more
co-registrars in accordance with Section 5.2.
12
Upon surrender for registration of transfer of any Note
to the Note registrar or any co-registrar, and satisfaction
of the requirements for such transfer set forth in this
Section 2.5, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes
of any authorized denominations and of a like aggregate
principal amount and bearing such restrictive legends as may
be required by this Indenture.
Notes may be exchanged for other Notes of any
authorized denominations and of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at any
such office or agency maintained by the Company pursuant to
Section 5.2. Whenever any Notes are so surrendered for
exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Noteholder
making the exchange is entitled to receive bearing
registration numbers not contemporaneously outstanding.
All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon
such registration of transfer or exchange.
All Notes presented or surrendered for registration of
transfer or for exchange, redemption or conversion shall (if
so required by the Company or the Note registrar) be duly
endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company,
and the Notes shall be duly executed by the Noteholder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax, assessment or
other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes.
Neither the Company nor the Trustee nor any Note
registrar or any Company registrar shall be required to
exchange or register a transfer of (a) any Notes for a
period of fifteen (15) days next preceding any selection of
Notes to be redeemed or (b) any Notes or portions thereof
called for redemption pursuant to Article III or (c) any
Notes or portion thereof surrendered for conversion pursuant
to Article XV.
(b) So long as the Notes are eligible for book-entry
settlement with the Depositary, or unless otherwise required
by law, all Notes that are so eligible may be represented by
one or more Notes in global form registered in the name of
the Depositary or the nominee of the Depositary, except as
otherwise specified below. The transfer and exchange of
beneficial interests in any such Note in global form shall
13
be effected through the Depositary in accordance with this
Indenture and the procedures of the Depositary therefor.
Notes that upon initial issuance are beneficially owned
by QIBs will be represented by a global Note (the "144A
Global Note"), and Notes that upon initial issuance are
beneficially owned by Non-U.S. Persons will be represented
by another global Note (the "Regulation S Global Note").
Transfers of interests in the Notes between the 144A Global
Note and the Regulation S Global Note will be made in
accordance with the standing instructions and procedures of
the Depositary and its participants. The Trustee shall make
appropriate endorsements to reflect increases or decreases
in the principal amounts of such global Notes as set forth
on the face of the Note ("Principal Amount") to reflect any
such transfers.
Except as provided below, beneficial owners of a Note
in global form shall not be entitled to have certificates
registered in their names, will not receive or be entitled
to receive physical delivery of certificates in definitive
form and will not be considered Holders of such Notes in
global form.
(c) So long as the Notes are eligible for book-entry
settlement, or unless otherwise required by law, upon any
transfer of a definitive Note to a QIB in accordance with
Rule 144A or to a Non-U.S. Person in accordance with
Regulation S, and upon receipt of the definitive Note or
Notes being so transferred, together with a certification
from the transferor that the transfer is being made in
compliance with Rule 144A or Regulation S, as the case may
be (or other evidence satisfactory to the Trustee), the
Trustee shall make an endorsement on the 144A Global Note or
the Regulation S Global Note, as the case may be, to reflect
an increase in the aggregate Principal Amount of the Notes
represented by such Note in global form, the Trustee shall
cancel such definitive Note or Notes in accordance with the
standing instructions and procedures of the Depositary, the
aggregate Principal Amount of Notes represented by such Note
in global form to be increased accordingly; provided that no
definitive Note, or portion thereof, in respect of which the
Company or an Affiliate of the Company held any beneficial
interest shall be included in such Note in global form until
such definitive Note is freely tradable in accordance with
Rule 144(k); provided further that the Trustee shall issue
Notes in definitive form upon any transfer of a beneficial
interest in the Note in global form to the Company or any
Affiliate of the Company.
Any Note in global form may be endorsed with or have
incorporated in the text thereof such legends or recitals or
changes not inconsistent with the provisions of this
Indenture as may be required by the Custodian, the
Depositary or by the National Association of Securities
Dealers, Inc. in order for the Notes to be tradeable on the
PORTAL Market or as may be required for the Notes to be
tradeable on any other
14
market developed for trading of securities pursuant to Rule
144A or Regulation S or required to comply with any
applicable law or any regulation thereunder or with the
rules and regulations of any securities exchange or
automated quotation system upon which the Notes may be
listed or traded or to conform with any usage with respect
thereto, or to indicate any special limitations or
restrictions to which any particular Notes are subject.
(d) Every Note that bears or is required under this
Section 2.5(d) to bear the legend set forth in this Section
2.5(d) (together with any Common Stock issued upon
conversion of the Notes and required to bear the legend set
forth in Section 2.5(e), collectively, the "Restricted
Securities") shall be subject to the restrictions on
transfer set forth in this Section 2.5 (d) (including those
set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent
of the Company, and the holder of each such Restricted Note,
by such Noteholder's acceptance thereof, agrees to be bound
by all such restrictions on transfer. As used in Sections
2.5(d) and 2.5(e), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any
Restricted Security.
Until the expiration of the holding period applicable
to sales thereof under Rule 144(k) under the Securities Act
(or any successor provision), any certificate evidencing
such Note (and all securities issued in exchange therefor or
substitution thereof, other than Common Stock, if any,
issued upon conversion thereof, which shall bear the legend
set forth in Section 2.5(e), if applicable) shall bear a
legend in substantially the following form, unless such Note
has been sold pursuant to a registration statement that has
been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer), or
unless otherwise agreed by the Company in writing, with
written notice thereof to the Trustee:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT,
15
PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH NOTE EXCEPT (A) TO MEDIMMUNE, INC.
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTE
EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL
FURNISH TO NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX
SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH
16
TRANSFER AND SUBMIT THIS CERTIFICATE TO NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A
PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL
BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE NOTE
EVIDENCED HEREBY PURSUANT TO CLAUSE 1(F) ABOVE OR UPON
ANY TRANSFER OF THE NOTE EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Any Note (or security issued in exchange or
substitution therefor) as to which such restrictions on
transfer shall have expired in accordance with their terms
or as to the conditions for removal of the foregoing legend
set forth therein have been satisfied may, upon surrender of
such Note for exchange to the Note registrar in accordance
with the provisions of this Section 2.5, be exchanged for a
new Note or Notes, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required
by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in the second paragraph
of Section 2.5(b) and in this Section 2.5(d)), a Note in
global form may not be transferred as a whole or in part
except by the Depositary to a nominee of the Depositary or
by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such
successor Depositary.
The Depositary shall be a clearing agency registered
under the Exchange Act. The Company initially appoints The
Depository Trust Company to act as Depositary with respect
to the Notes in global form. Initially, the 144A Global
Note and the
17
Regulation S Global Note shall be issued to the Depositary,
registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Custodian for Cede & Co.
If at any time the Depositary for a Note in global form
notifies the Company that it is unwilling or unable to
continue as Depositary for such Note, the Company may
appoint a successor Depositary with respect to such Note.
If a successor Depositary is not appointed by the Company
within ninety (90) days after the Company receives such
notice, the Company will execute, and the Trustee, upon
receipt of an Officers' Certificate for the authentication
and delivery of Notes, will authenticate and deliver, Notes
in certificated form, in aggregate principal amount equal to
the principal amount of such Note in global form, in
exchange for such Note in global form.
If a Note in certificated form is issued in exchange
for any portion of a Note in global form after the close of
business at the office or agency where such exchange occurs
on any record date and before the opening of business at
such office or agency on the next succeeding interest
payment date, interest will not be payable on such interest
payment date in respect of such Note, but will be payable on
such interest payment date, subject to the provisions of
Section 2.3, only to the person to whom interest in respect
of such portion of such Note in global form is payable in
accordance with the provisions of this Indenture.
Notes in certificated form issued in exchange for all
or a part of a Note in global form pursuant to this Section
2.5 shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication,
the Trustee shall deliver such Notes in certificated form to
the persons in whose names such Notes in certificated form
are so registered.
At such time as all interests in a Note in global form
have been redeemed, converted, canceled, exchanged for Notes
in certificated form, or transferred to a transferee who
receives Notes in certificated form thereof, such Note in
global form shall, upon receipt thereof, be canceled by the
Trustee in accordance with standing procedures and
instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any
interest in a global Note is exchanged for Notes in
certificated form, redeemed, converted, repurchased or
canceled, exchanged for Notes in certificated form or
transferred to a transferee who receives Notes in
certificated form therefor or any Note in certificated form
is exchanged or transferred for part of a Note in global
form, the principal amount of such Note in global form
shall, in accordance with the standing procedures and
instructions existing between the Depositary and the
Custodian, be appropriately reduced or increased, as the
case may
18
be, and an endorsement shall be made on such Note in global
form, by the Trustee or the Custodian, at the direction of
the Trustee, to reflect such reduction or increase.
(e) Until the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision), any stock
certificate representing Common Stock issued upon conversion
of such Note shall bear a legend in substantially the
following form, unless such Common Stock has been sold
pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to
be effective at the time of such transfer) or such Common
Stock has been issued upon conversion of Notes that have
been transferred pursuant to a registration statement that
has been declared effective under the Securities Act, or
unless otherwise agreed by the Company in writing with
written notice thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT
UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A)
TO MEDIMMUNE, INC. OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) THAT PRIOR TO SUCH TRANSFER
FURNISHES TO AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION
19
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (F) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL
FURNISH TO AMERICAN STOCK TRANSFER & TRUST COMPANY, AS
TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3)
IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(F) ABOVE) A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(F) ABOVE OR
UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES"
AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on
transfer shall have expired in accordance with their terms
or as to which the conditions for removal of the foregoing
legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of
Common Stock for exchange in accordance with the procedures
of the transfer agent for the Common Stock, be exchanged for
a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive
legend required by this Section 2.5(e).
(f) Any Note or Common Stock issued upon the
conversion or exchange of a Note that, prior to the expiration of
the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), is
purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from
the registration
20
requirements of the Securities Act in a transaction which results
in such Notes or Common Stock, as the case may be, no longer
being "restricted securities" (as defined under Rule 144).
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes. In
case any Note shall become mutilated or be destroyed, lost or
stolen, the Company in its discretion may execute, and upon its
written request the Trustee or an authenticating agent appointed
by the Trustee shall authenticate and deliver, a new Note,
bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated Note, or in lieu of and in
substitution for the Note so destroyed, lost or stolen. In every
case the applicant for a substituted Note shall furnish to the
Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft,
the applicant shall also furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent evidence to
their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.
Following receipt by the Trustee or such authenticating
agent, as the case may be, of satisfactory security or indemnity
and evidence, as described in the preceding paragraph, the
Trustee or such authenticating agent may authenticate any such
substituted Note and deliver such Note. Upon the issuance of any
substituted Note, 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 connected
therewith. In case any Note which has matured or is about to
mature or has been called for redemption or is about to be
converted into Common Stock shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of or convert or
authorize the conversion of the same (without surrender thereof
except in the case of a mutilated Note), as the case may be, if
the applicant for such payment or conversion shall furnish to the
Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such
substitution, and, in case of destruction, loss or theft,
evidence satisfactory to the Company, the Trustee and, if
applicable, any paying agent or conversion agent of the
destruction, loss or theft of such Note and of the ownership
thereof.
Every substitute Note issued pursuant to the provisions of
this Section 2.6 by virtue of the fact that any Note is
destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company, whether or not the
destroyed, lost or stolen Note shall be found at any time, and
shall be entitled to all the benefits of (but shall be subject to
all the limitations set forth in) this Indenture equally and
proportionately with any and all other Notes duly issued
hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing
provisions are exclusive with respect to
21
the replacement or payment or conversion of mutilated, destroyed,
lost or stolen Notes and shall preclude any and all other rights
or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement
or payment or conversion of negotiable instruments or other
securities without their surrender.
Section 2.7 Temporary Notes. Pending the preparation of
Notes in certificated form, the Company may execute and the
Trustee or an authenticating agent appointed by the Trustee
shall, upon the written request of the Company, authenticate and
deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and
substantially in the form of the Notes in certificated form, but
with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the
Company. Every such temporary Note shall be executed by the
Company and authenticated by the Trustee or such authenticating
agent upon the same conditions and in substantially the same
manner, and with the same effect, as the Notes in certificated
form. Without unreasonable delay the Company will execute and
deliver to the Trustee or such authenticating agent Notes in
certificated form (other than in the case of Notes in global
form) and thereupon any or all temporary Notes (other than any
such Note in global form) may be surrendered in exchange
therefor, at each office or agency maintained by the Company
pursuant to Section 5.2 and the Trustee or such authenticating
agent shall authenticate and deliver in exchange for such
temporary Notes an equal aggregate principal amount of Notes in
certificated form. Such exchange shall be made by the Company at
its own expense and without any charge therefor. Until so
exchanged, the temporary Notes shall in all respects be entitled
to the same benefits and subject to the same limitations under
this Indenture as Notes in certificated form authenticated and
delivered hereunder.
Section 2.8 Cancellation of Notes Paid, Etc. All Notes
surrendered for the purpose of payment, redemption, conversion,
exchange or registration of transfer, shall, if surrendered to
the Company or any paying agent or any Note registrar or any
conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Notes shall be issued in lieu
thereof except as expressly permitted by any of the provisions of
this Indenture. The Trustee shall destroy canceled Notes (unless
the Company directs it in writing to do otherwise) and, after
such destruction, shall, if requested in writing by the Company,
deliver a certificate of such destruction to the Company. If the
Company shall acquire any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness
represented by such Notes unless and until the same are delivered
to the Trustee for cancellation.
22
ARTICLE III
REDEMPTION OF NOTES
Section 3.1 Redemption Prices. The Company may not redeem
the Notes prior to July 7, 1999. At any time on or after July 7,
1999, the Company may, at its option, redeem all or from time to
time any part of the Notes on any date prior to maturity, upon
notice as set forth in Section 3.2, and at the optional
redemption prices set forth in the form of Note attached as
Exhibit A hereto, together with accrued interest to, but
excluding, the date fixed for redemption.
Section 3.2 Notice of Redemption; Selection of Notes. In
case the Company shall desire to exercise the right to redeem all
or, as the case may be, any part of the Notes pursuant to Section
3.1, it shall fix a date for redemption and it or, at its written
request received by the Trustee not fewer than forty-five (45)
days prior (or such shorter period of time as may be acceptable
to the Trustee) to the date fixed for redemption, the Trustee in
the name of and at the expense of the Company, shall mail or
cause to be mailed a notice of such redemption at least 30 days
prior to the date fixed for redemption to the holders of Notes so
to be redeemed as a whole or in part at their last addresses as
the same appear on the Note register (provided that if the
Company shall give such notice, it shall also give written
notice, and written notice of the Notes to be redeemed, to the
Trustee). Such mailing shall be by first class mail. The notice
if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice
by mail or any defect in the notice to the holder of any Note
designated for redemption as a whole or in part shall not affect
the validity of the proceedings for the redemption of any other
Note.
Each such notice of redemption shall specify the aggregate
principal amount of Notes to be redeemed, the date fixed for
redemption which shall be a Business Day, the redemption price at
which Notes are to be redeemed, the place or places of payment,
that payment will be made upon presentation and surrender of such
Notes, that interest accrued to the date fixed for redemption
will be paid as specified in said notice, and that on and after
said date interest thereon or on the portion thereof to be
redeemed will cease to accrue. Such notice shall also state the
current Conversion Price and the date on which the right to
convert such Notes or portions thereof into Common Stock will
expire. If fewer than all the Notes are to be redeemed, the
notice of redemption shall identify the Notes to be redeemed. In
case any Note is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date
fixed for redemption, upon surrender of such Note, a new Note or
Notes in principal amount equal to the unredeemed portion thereof
will be issued.
On or prior to the redemption date specified in the notice
of redemption given as
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provided in this Section 3.2, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is
acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 5.4) an amount of money sufficient
to redeem on the redemption date all the Notes (or portions
thereof) so called for redemption (other than those theretofore
surrendered for conversion into Common Stock) at the appropriate
redemption price, together with accrued interest to, but
excluding, the date fixed for redemption; provided that if such
payment is made on the redemption date it must be received by the
Trustee or paying agent, as the case may be, by 10:00 a.m. New
York City time, on such date. If any Note called for redemption
is converted pursuant hereto, any money deposited with the
Trustee or any paying agent or so segregated and held in trust
for the redemption of such Note shall be paid to the Company upon
its written request, or, if then held by the Company shall be
discharged from such trust. Whenever any Notes are to be
redeemed, the Company will give the Trustee written notice in the
form of an Officers' Certificate not fewer than forty-five (45)
days (or such shorter period of time as may be acceptable to the
Trustee) prior to the redemption date as to the aggregate
principal amount of Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Trustee
shall select the Notes or portions thereof of the 144A Note, the
Regulation S Note or the Notes in certificated form to be
redeemed (in principal amounts of $1,000 or integral multiples
thereof), by lot or, in its discretion, on a pro rata basis. If
any Note selected for partial redemption is converted in part
after such selection, the converted portion of such Note shall be
deemed (so far as may be) to be the portion to be selected for
redemption. The Notes (or portions thereof) so selected shall be
deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Note is converted as a whole or in
part before the mailing of the notice of redemption.
Upon any redemption of less than all Notes, the Company and
the Trustee may (but need not) treat as outstanding any Notes
surrendered for conversion during the period of fifteen (15) days
next preceding the mailing of a notice of redemption and may (but
need not) treat as outstanding any Note authenticated and
delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.
Section 3.3 Payment of Notes Called for Redemption. If
notice of redemption has been given as above provided, the Notes
or portion of Notes with respect to which such notice has been
given shall, unless converted into Common Stock pursuant to the
terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at
the applicable redemption price, together with interest accrued
to (but excluding) the date fixed for redemption, and on and
after said date (unless the Company shall default in the payment
of such Notes at the redemption price, together with interest
accrued to said date) interest on the Notes or portion of Notes
so called for redemption shall cease to accrue and such Notes
shall cease after the close of business on the Business Day
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next preceding the date fixed for redemption to be convertible
into Common Stock and, except as provided in Sections 8.5 and
13.4, to be entitled to any benefit or security under this
Indenture, and the holders thereof shall have no right in respect
of such Notes except the right to receive the redemption price
thereof and unpaid interest to (but excluding) the date fixed for
redemption. On presentation and surrender of such Notes at a
place of payment in said notice specified, the said Notes or the
specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with
interest accrued thereon to (but excluding) the date fixed for
redemption; provided that, if the applicable redemption date is
an interest payment date, the semi-annual payment of interest
becoming due on such date shall be payable to the holders of such
Notes registered as such on the relevant record date instead of
the holders surrendering such Notes for redemption on such date.
Upon presentation of any Note redeemed in part only, the
Company shall execute and the Trustee shall authenticate and
deliver to the holder thereof, at the expense of the Company, a
new Note or Notes, of authorized denominations, in principal
amount equal to the unredeemed portion of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem
any Notes or mail any notice of optional redemption during the
continuance of a default in payment of interest or premium on the
Notes or of any Event of Default of which, in the case of any
Event of Default other than under Sections 7.1 (a) or 7.1 (b), a
Responsible Officer of the Trustee has knowledge. If any Note
called for redemption shall not be so paid upon surrender thereof
for redemption, the principal and premium, if any, shall, until
paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Note and such Note shall
remain convertible into Common Stock until the principal and
premium, if any, shall have been paid or duly provided for.
Section 3.4 Conversion Arrangement on Call for Redemption.
In connection with any redemption of Notes, the Company may
arrange for the purchase and conversion of any Notes by an
agreement with one or more investment bankers or other purchasers
to purchase such Notes by paying to the Trustee in trust for the
Noteholders, on or before the date fixed for redemption, an
amount not less than the applicable redemption price, together
with interest accrued to (but excluding) the date fixed for
redemption, of such Notes. Notwithstanding anything to the
contrary contained in this Article III, the obligation of the
Company to pay the redemption price of such Notes, together with
interest accrued to (but excluding) the date fixed for
redemption, shall be deemed to be satisfied and discharged to the
extent such amount is so paid by such purchasers. If such an
agreement is entered into, a copy of which will be filed with the
Trustee prior to the date fixed for redemption, any Notes not
duly surrendered for conversion by the holders thereof may, at
the option of the Company, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such holders
and (notwithstanding anything to the contrary contained in
Article XV)
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surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the date fixed for
redemption (and the right to convert any such Notes shall be
extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Company, the
Trustee shall hold and dispose of any such amount paid to it in
the same manner as it would monies deposited with it by the
Company for the redemption of Notes. Without the Trustee's prior
written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Notes shall
increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in
this Indenture.
Section 3.5 Redemption at Option of Holders.
(a) If there shall occur a Fundamental Change, then each
Noteholder shall have the right, at such holder's option, to
require the Company to redeem all of such holder's Notes, or any
portion thereof that is an integral multiple of $1,000 principal
amount, on the date (the "Repurchase Date") that is 30 days after
the date of the Company Notice (as defined in Section 3.5(b)
below) of such Fundamental Change (or, if such 30th day is not a
Business Day, the next succeeding Business Day). Such repayment
shall be made at the following prices (expressed as percentages
of the principal amount) in the event of a Repurchase Date
occurring during the 12-month period beginning July 1:
Year Percentage Year Percentage
1996 107.00% 2000 103.00%
1997 106.00 2001 102.00
1998 105.00 2002 101.00
1999 104.00
and 100% at July 1, 2003; provided that if the Applicable Price
with respect to the Fundamental Change is less than the Reference
Market Price, the Company shall redeem such Notes at a price
equal to the foregoing redemption price multiplied by the
fraction obtained by dividing the Applicable Price by the
Reference Market Price; provided that if such repayment date is
January 1 or July 1, then the interest payable on such date shall
be paid to the holder of record of the Note on the next preceding
December 15 or June 15. In each case, the Company shall also pay
to such holders accrued interest to, but excluding, the
Repurchase Date on the redeemed Notes.
Upon presentation of any Note redeemed in part only, the
Company shall execute and, upon the Company's written direction
to the Trustee, the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Company, a new Note or
Notes, of authorized denominations, in principal amount equal to
the unredeemed portion of the Notes so presented.
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(b) On or before the tenth day after the occurrence of a
Fundamental Change, the Company, or, at its written request
(which must be received by the Trustee at least five Business
Days prior to the date the Trustee is requested to give notice as
described below), the Trustee in the name of and at the expense
of the Company, shall mail or cause to be mailed to all holders
of record on the date of the Fundamental Change a notice (the
"Company Notice") of the occurrence of such Fundamental Change
and of the redemption right at the option of the holders arising
as a result thereof. Such notice shall be mailed in the manner
and with the effect set forth in the first paragraph of Section
3.2. The Company shall also deliver a copy of the Company Notice
to the Trustee at such time as it is mailed to Noteholders.
Each Company Notice shall specify the circumstances
constituting the Fundamental Change, the Repurchase Date, the
price at which the Company shall be obligated to redeem Notes,
the latest time on the Repurchase Date by which the holder must
exercise the redemption right (the "Fundamental Change Expiration
Time"), that the holder shall have the right to withdraw any
Notes surrendered prior to the Fundamental Change Expiration
Time, a description of the procedure which a Noteholder must
follow to exercise such redemption right and to withdraw any
surrendered Notes, the place or places where the holder is to
surrender such holder's Notes, and the amount of interest accrued
on each Note to the Repurchase Date.
No failure of the Company to give the foregoing notices and
no defect therein shall limit the Noteholders' redemption rights
or affect the validity of the proceedings for the repurchase of
the Notes pursuant to this Section 3.5.
(c) For a Note to be so repaid at the option of the holder,
the Company must receive at the office or agency of the Company
maintained for that purpose or, at the option of such holder, the
Corporate Trust Office, such Note with the form entitled "Option
to Elect Repayment Upon A Fundamental Change" on the reverse
thereof duly completed, together with such Notes duly endorsed
for transfer, on or before the Fundamental Change Expiration
Time. All questions as to the validity, eligibility (including
time of receipt) and acceptance of any Note for repayment shall
be determined by the Company, whose determination shall be final
and binding absent manifest error.
(d) On or prior to the Repurchase Date, the Company will
deposit with the Trustee or with one or more paying agents (or,
if the Company is acting as its own paying agent, set aside,
segregate and hold in trust as provided in Section 5.4) an amount
of money sufficient to repay on the Repurchase Date all the Notes
to be repaid on such date at the appropriate redemption price,
together with accrued interest to (but excluding) the Repurchase
Date; provided that if such payment is made on the Repurchase
Date it must be received by the Trustee or paying agent, as the
case may be, by 10:00 a.m. New York City time, on such date.
Payment for Notes surrendered for redemption (and not withdrawn)
27
prior to the Fundamental Change Expiration Time will be made
promptly (but in no event more than five Business Days) following
the Repurchase Date by mailing checks for the amount payable to
the holders of such Notes entitled thereto as they shall appear
on the registry books of the Company.
(e) In the case of a consolidation, merger, conveyance,
transfer or lease to which Section 15.6 applies, in which the
Common Stock of the Company is changed or exchanged as a result
into the right to receive securities, cash or other property
which includes shares of Common Stock of the Company or another
person that are, or upon issuance will be, traded on a United
States national securities exchange or approved for trading on an
established automated over-the-counter trading market in the
United States and such shares constitute at the time such change
or exchange becomes effective in excess of 50% of the aggregate
fair market value of such securities, cash and other property (as
determined by the Company, which determination shall be
conclusive and binding), then the person formed by such
consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of
Counsel that such supplemental indenture complies with the Trust
Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of this
Indenture relating to the right of holders of the Notes to cause
the Company to repurchase the Notes following a Fundamental
Change, including without limitation the applicable provisions of
this Section 3.5 and the definitions of the Applicable Price,
Common Stock, Fundamental Change and Reference Market Price, as
appropriate, as determined in good faith by the Company (which
determination shall be conclusive and binding), to make such
provisions apply to the common stock and the issuer thereof if
different from the Company and Common Stock of the Company (in
lieu of the Company and the Common Stock of the Company).
ARTICLE IV
SUBORDINATION OF NOTES
Section 4.1 Agreement of Subordination. The Company
covenants and agrees, and each holder of Notes issued hereunder
by his acceptance thereof likewise covenants and agrees, that all
Notes shall be issued subject to the provisions of this Article
IV; and each Person holding any Note, whether upon original issue
or upon transfer, assignment or exchange thereof, accepts and
agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and
interest on all Notes (including, but not limited to, the
redemption price with respect to the Notes called for redemption
in accordance with Section 3.2 or submitted for redemption in
accordance with Section 3.5, as the case may be, as provided in
the Indenture) issued hereunder shall, to the
28
extent and in the manner hereinafter set forth, be subordinated
and subject in right of payment to the prior payment in full of
all Senior Indebtedness, whether outstanding at the date of this
Indenture or thereafter incurred.
No provision of this Article IV shall prevent the occurrence
of any default or Event of Default hereunder.
Section 4.2 Payments to Noteholders. No payment shall be
made with respect to the principal of, or premium, if any, or
interest on the Notes (including, but not limited to, the
redemption price with respect to the Notes to be called for
redemption in accordance with Section 3.2 or submitted for
redemption in accordance with Section 3.5, as the case may be, as
provided in this Indenture), except payments and distributions
made by the Trustee as permitted by the first or second paragraph
of Section 4.5, if:
(i) a default in the payment of principal, premium, if
any, interest, rent or other obligations in respect of
Senior Indebtedness occurs and is continuing (or, in the
case of Senior Indebtedness for which there is a period of
grace, in the event of such a default that continues beyond
the period of grace, if any, specified in the instrument or
lease evidencing such Senior Indebtedness), unless and until
such default shall have been cured or waived or shall have
ceased to exist; or
(ii) a default, other than a payment default, on any
Designated Senior Indebtedness occurs and is continuing that
then permits holders of such Designated Senior Indebtedness
to accelerate its maturity and the Trustee receives a notice
of the default (a "Payment Blockage Notice") from a
Representative or the Company.
If the Trustee receives any Payment Blockage Notice pursuant
to clause (ii) above, no subsequent Payment Blockage Notice shall
be effective for purposes of this Section unless and until (A) at
least 365 days shall have elapsed since the initial effectiveness
of the immediately prior Payment Blockage Notice, and (B) all
scheduled payments of principal, premium, if any, and interest on
the Notes that have come due have been paid in full in cash. No
nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and
distributions in respect of the Notes upon the earlier of:
(1) the date upon which the default is cured or waived or
ceases to exist, or
29
(2) in the case of a default referred to in clause (ii)
above, 179 days pass after notice is received if the maturity of
such Designated Senior Indebtedness has not been accelerated,
unless this Article IV otherwise prohibits the payment or
distribution at the time of such payment or distribution.
Upon any payment by the Company, or distribution of assets
of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become
due upon all Senior Indebtedness shall first be paid in full in
cash or other payment satisfactory to the holders of such Senior
Indebtedness, or payment thereof in accordance with its terms
provided for in cash or other payment satisfactory to the holders
of such Senior Indebtedness before any payment is made on account
of the principal of, premium, if any, or interest on the Notes
(except payments made pursuant to Article XIII from monies
deposited with the Trustee pursuant thereto prior to commencement
of proceedings for such dissolution, winding-up, liquidation or
reorganization); and upon any such dissolution or winding-up or
liquidation or reorganization of the Company or bankruptcy,
insolvency, receivership or other proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the
holders of the Notes or the Trustee would be entitled, except for
the provision of this Article IV, shall (except as aforesaid) be
paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or
distribution, or by the holders of the Notes or by the Trustee
under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by
such holders, or as otherwise required by law or a court order)
or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay
all Senior Indebtedness in full, in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness, before any payment or
distribution is made to the holders of the Notes or to the
Trustee.
For purposes of this Article IV, the words, "cash, property
or securities" shall not be deemed to include shares of stock of
the Company as reorganized or readjusted, or securities of the
Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article IV
with respect to the Notes to the payment of all Senior
Indebtedness which may at the time be outstanding; provided that
(i) the Senior Indebtedness is assumed by the new corporation, if
any, resulting from any reorganization or readjustment, and (ii)
the rights of
30
the holders of Senior Indebtedness (other than leases which are
not assumed by the Company or the new corporation, as the case
may be) are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the
Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation
upon the terms and conditions provided for in Article XII shall
not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 4.2 if such other
corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in
Article XII.
In the event of the acceleration of the Notes because of an
Event of Default, no payment or distribution shall be made to the
Trustee or any holder of Notes in respect of the principal of,
premium, if any, or interest on the Notes (including, but not
limited to, the redemption price with respect to the Notes called
for redemption in accordance with Section 3.2 or submitted for
redemption in accordance with Section 3.5, as the case may be, as
provided in the Indenture), except payments and distributions
made by the Trustee as permitted by the first or second paragraph
of Section 4.5, until all Senior Indebtedness has been paid in
full in cash or other payment satisfactory to the holders of
Senior Indebtedness or such acceleration is rescinded in
accordance with the terms of this Indenture. If payment of the
Notes is accelerated because of an Event of Default, the Company
shall promptly notify holders of Senior Indebtedness of the
acceleration.
In the event that, notwithstanding the foregoing provisions,
any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (including,
without limitation, by way of setoff or otherwise), prohibited by
the foregoing provisions in this Section 4.2, shall be received
by the Trustee or the holders of the Notes before all Senior
Indebtedness is paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, or
provision is made for such payment thereof in accordance with its
terms in cash or other payment satisfactory to the holders of
such Senior Indebtedness, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or
delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing
any Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for
application to the payment of any Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in
full in cash or other payment satisfactory to the holders of such
Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior
Indebtedness.
Nothing in this Section 4.2 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 8.6. This
Section 4.2 shall be subject to the further provisions of Section
4.5.
31
Section 4.3 Subrogation of Notes. Subject to the payment
in full of all Senior Indebtedness, the rights of the holders of
the Notes shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article IV (equally and
ratably with the holders of all indebtedness of the Company which
by its express terms is subordinated to other indebtedness of the
Company to substantially the same extent as the Notes are
subordinated and is entitled to like rights of subrogation) to
the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness until the
principal, premium, if any, and interest on the Notes shall be
paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the
holders of the Notes or the Trustee would be entitled except for
the provisions of this Article IV, and no payment over pursuant
to the provisions of this Article IV, to or for the benefit of
the holders of Senior Indebtedness by holders of the Notes or the
Trustee, shall, as between the Company, its creditors other than
holders of Senior Indebtedness, and the holders of the Notes, be
deemed to be a payment by the Company to or on account of the
Senior Indebtedness; and no payments or distributions of cash,
property or securities to or for the benefit of the holders of
the Notes pursuant to the subrogation provisions of this Article
IV, which would otherwise have been paid to the holders of Senior
Indebtedness shall be deemed to be a payment by the Company to or
for the account of the Notes. It is understood that the
provisions of this Article IV are and are intended solely for the
purposes of defining the relative rights of the holders of the
Notes, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Notes, the obligation of the
Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of (and premium, if any) and
interest on the Notes as and when the same shall become due and
payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Notes and
creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the
Trustee or the holder of any Note from exercising all remedies
otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article IV
of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise
of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article IV, the Trustee, subject to the
provisions of Section 8.1, and the holders of the Notes shall be
entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent
32
or other person making such payment or distribution, delivered to
the Trustee or to the holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable
thereon and all other facts pertinent thereto or to this Article
IV.
Section 4.4 Authorization to Effect Subordination. Each
holder of a Note by the holder's acceptance thereof authorizes
and directs the Trustee on the holder's behalf to take such
action as may be necessary or appropriate to effectuate the
subordination as provided in this Article IV and appoints the
Trustee to act as the holder's attorney-in-fact for any and all
such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding
referred to in the third paragraph of Section 7.2 hereof at least
30 days before the expiration of the time to file such claim, the
holders of any Senior Indebtedness or their representatives are
hereby authorized to file an appropriate claim for and on behalf
of the holders of the Notes.
Section 4.5 Notice to Trustee. The Company shall give
prompt written notice in the form of an Officers' Certificate to
a Responsible Officer of the Trustee and to any paying agent of
any fact known to the Company which would prohibit the making of
any payment of monies to or by the Trustee or any paying agent in
respect of the Notes pursuant to the provisions of this Article
IV. Notwithstanding the provisions of this Article IV or any
other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would
prohibit the making of any payment of monies to or by the Trustee
in respect of the Notes pursuant to the provisions of this
Article IV, unless and until a Responsible Officer of the Trustee
shall have received written notice thereof at the Corporate Trust
Office from the Company (in the form of an Officers' Certificate)
or a Representative or a holder or holders of Senior Indebtedness
or from any trustee thereof; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section
8.1, shall be entitled in all respects to assume that no such
facts exist; provided that if on a date not less than two
Business Days prior to the date upon which by the terms hereof
any such monies may become payable for any purpose (including,
without limitation, the payment of the principal of, or premium,
if any, or interest on any Note) the Trustee shall not have
received, with respect to such monies, the notice provided for in
this Section 4.5, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority
to apply moneys received to the purpose for which they were
received, and shall not be affected by any notice to the contrary
which may be received by it on or after such prior date.
Notwithstanding anything in this Article IV to the contrary,
nothing shall prevent any payment by the Trustee to the
Noteholders of monies deposited with it pursuant to Section 13.1,
and any such payment shall not be subject to the provisions of
Section 4.1 or 4.2.
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The Trustee, subject to the provisions of Section 8.1, shall
be entitled to rely on the delivery to it of a written notice by
a Representative or a person representing himself to be a holder
of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a Representative or
a holder of Senior Indebtedness or a trustee on behalf of any
such holder or holders. The Trustee shall not be required to
make any payment or distribution to or on behalf of a holder of
Senior Indebtedness pursuant to this Article IV unless it has
received satisfactory evidence as to the amount of Senior
Indebtedness held by such person, the extent to which such person
is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such person under this
Article IV.
Section 4.6 Trustee's Relation to Senior Indebtedness. The
Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article IV in respect of any Senior
Indebtedness at any time held by it, to the same extent as any
other holder of Senior Indebtedness, and nothing in Section 8.13
or elsewhere in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this
Article IV, and no implied covenants or obligations with respect
to the holders of Senior Indebtedness shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Indebtedness
and, subject to the provisions of Section 8.1, the Trustee shall
not be liable to any holder of Senior Indebtedness (i) for any
failure to make any payments or distributions to such holder or
(ii) if it shall pay over or deliver to holders of Notes, the
Company or any other person money or assets to which any holder
of Senior Indebtedness shall be entitled by virtue of this
Article IV or otherwise.
Section 4.7 No Impairment of Subordination. No right of
any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
Section 4.8 Certain Conversions Deemed. For the purposes
of this Article IV only, (1) the issuance and delivery of junior
securities upon conversion of Notes in accordance with Article XV
shall not be deemed to constitute a payment or distribution on
account of the principal of (or premium, if any) or interest on
Notes or on account of the purchase or other acquisition of
Notes, and (2) the payment, issuance or delivery of cash (except
in satisfaction of fractional shares pursuant to Section 15.2),
property or securities
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(other than junior securities) upon conversion of a Note shall be
deemed to constitute payment on account of the principal of such
Note. For the purposes of this Section 4.8, the term "junior
securities" means (a) shares of any stock of any class of the
Company, or (b) securities of the Company which are subordinated
in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater
extent than, the Notes are so subordinated as provided in this
Article. Nothing contained in this Article IV or elsewhere in
this Indenture or in the Notes is intended to or shall impair, as
among the Company, its creditors (other than holders of Senior
Indebtedness) and the Noteholders, the right, which is absolute
and unconditional, of the Holder of any Note to convert such Note
in accordance with Article XV.
Section 4.9 Article Applicable to Paying Agents. If at any
time any paying agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall (unless the context
otherwise requires) be construed as extending to and including
such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article in
addition to or in place of the Trustee; provided, however, that
the first paragraph of Section 4.5 shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as
paying agent.
The Trustee shall not be responsible for the actions or
inactions of any other paying agents (including the Company if
acting as its own paying agent) and shall have no control of any
funds held by such other paying agents.
Section 4.10 Senior Indebtedness Entitled to Rely. The
holders of Senior Indebtedness (including, without limitation,
Designated Senior Indebtedness) shall have the right to rely upon
this Article IV, and no amendment or modification of the
provisions contained herein shall diminish the rights of such
holders unless such holders shall have agreed in writing thereto.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually
pay or cause to be paid the principal of and premium, if any, and
interest on each of the Notes at the places, at the respective
times and in the manner provided herein and in the Notes. Each
installment of interest on the Notes due on any semi-annual
interest payment date may be paid either (i) by check mailed to
the address of the person entitled thereto as it appears in the
Note register or (ii) by transfer to
35
an account maintained by such person located in the United
States; provided, however, that payments to the Depositary will
be made by wire transfer of immediately available funds to the
account of Depositary or its nominee.
Section 5.2 Maintenance of Office or Agency. The Company
will maintain an office or agency where the Notes may be
surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and
where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency not
designated or appointed by the Trustee. 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.
The Company may also from time to time designate co-
registrars and one or more other offices or agencies where the
Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations.
The Company will give prompt written notice to any such
designation or rescission and of any change in the location of
any such other office or agency.
The Company hereby initially designates the Trustee as
paying agent, Note registrar, Custodian and conversion agent, and
each of the Corporate Trust Office of the Trustee and the office
of the Trustee (which shall initially be Norwest Trust Company of
New York, an agent of the Trustee located at 15th Floor, 3 New
York Plaza, New York, New York, 10004), one such office or agency
of the Company for each of the aforesaid purposes.
So long as the Trustee is the Note registrar, the Trustee
agrees to mail, or cause to be mailed, the notices set forth in
Section 8.10(a) and the third paragraph of Section 8.11. If co-
registrars have been appointed in accordance with this Section,
the Trustee shall only mail such notices to the Company and the
holders of Notes it can identify from its records.
Section 5.3 Appointments to Fill Vacancies in Trustee's
Office. The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner
provided in Section 8.10, a Trustee, so that there shall at all
times be a Trustee hereunder.
Section 5.4 Provisions as to Paying Agent.
(a) If the Company shall appoint a paying agent other than
the Trustee, or if the Trustee shall appoint such a paying agent,
it will cause such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 5.4:
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(1) that it will hold all sums held by
it as such agent for the payment of the principal of
and premium, if any, or interest on the Notes (whether
such sums have been paid to it by the Company or by any
other obligor on the Notes) in trust for the benefit of
the holders of the Notes;
(2) that it will give the Trustee
notice of any failure by the Company (or by any other
obligor on the Notes) to make any payment of the
principal of and premium, if any, or interest on the
Notes when the same shall be due and payable; and
(3) that at any time during the
continuance of an Event of Default, upon request of the
Trustee, it will forthwith pay to the Trustee all sums
so held in trust.
The Company shall, on or before each due date of the
principal of, premium, if any, or interest on the Notes,
deposit with the paying agent a sum sufficient to pay such
principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly
notify the Trustee of any failure to take such action;
provided that if such deposit is made on the due date, such
deposit shall be received by the paying agent by 10:00 a.m.
New York City time, on such date.
(b) If the Company shall act as its own paying agent, it
will, on or before each due date of the principal of, premium, if
any, or interest on the Notes, set aside, segregate and hold in
trust for the benefit of the holders of the Notes a sum
sufficient to pay such principal, premium, if any, or interest so
becoming due and will notify the Trustee of any failure to take
such action and of any failure by the Company (or any other
obligor under the Notes) to make any payment of the principal of,
premium, if any, or interest on the Notes when the same shall
become due and payable.
(c) Anything in this Section 5.4 to the contrary
notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge of this Indenture, or for
any other reason, pay or cause to be paid to the Trustee all sums
held in trust by the Company or any paying agent hereunder as
required by this Section 5.4, such sums to be held by the Trustee
upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such
paying agent shall be released from all further liability with
respect to such sums.
(d) Anything in this Section 5.4 to the contrary
notwithstanding, the agreement to hold sums in trust as provided
in this Section 5.4 is subject to Sections 13.3 and 13.4.
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(e) The Trustee shall not be responsible for the actions
of any other paying agents (including the Company if acting as
its own paying agent) and shall have no control of any funds held
by such other paying agents.
Section 5.5 Corporate Existence. Subject to Article XII,
the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence.
Section 5.6 Rule 144A Information Requirement. Within the
period prior to the expiration of the holding period applicable
to sales thereof under Rule 144(k) under the Securities Act (or
any successor provision), the Company covenants and agrees that
it shall, during any period in which it is not subject to Section
13 or 15(d) under the Exchange Act, make available to any holder
or beneficial holder of Notes or any Common Stock issued upon
conversion thereof which continue to be Restricted Securities in
connection with any sale thereof and any prospective purchaser of
Notes or such Common Stock from such holder or beneficial holder,
the information required pursuant to Rule 144A(d)(4) under the
Securities Act upon the request of any holder or beneficial
holder of the Notes or such Common Stock and it will take such
further action as any holder or beneficial holder of such Notes
or such Common Stock may reasonably request, all to the extent
required from time to time to enable such holder or beneficial
holder to sell its Notes or Common Stock without registration
under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to
time. Upon the request of any holder or any beneficial holder of
the Notes or such Common Stock, the Company will deliver to such
holder a written statement as to whether it has complied with
such requirements.
Section 5.7 Stay, Extension and Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the
principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which
may affect the covenants or the performance of this Indenture and
the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such
power as though no such law has been enacted.
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ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1 Noteholders' Lists. The Company covenants and
agrees that it will furnish or cause to be furnished to the
Trustee, semiannually, not more than fifteen (15) days after each
December 15 and June 15 in each year beginning with January 1,
1997, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of
any such request (or such lesser time as the Trustee may
reasonably request in order to enable it to timely provide any
notice to be provided by it hereunder), a list in such form as
the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days
(or such other date as the Trustee may reasonably request in
order to so provide any such notices) prior to the time such
information is furnished, except that no such list need be
furnished so long as the Trustee is acting as the sole Note
registrar.
Section 6.2 Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and
addresses of the holders of Notes contained in the most recent
list furnished to it as provided in Section 6.1 or maintained by
the Trustee in its capacity as Note registrar or co-registrar in
respect of the Notes, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 6.1 upon receipt of a
new list so furnished.
(b) The rights of Noteholders to communicate with other
holders of Notes with respect to their rights under this
Indenture or under the Notes, and the corresponding rights and
duties of the Trustee, shall be as provided by the Trust
Indenture Act.
(c) Every Noteholder, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to
names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.
Section 6.3 Reports by Trustee.
(a) Within 60 days after May 31 of each year commencing
with the year 1996, the Trustee shall transmit to holders of
Notes such reports dated as of May 31 of the year in which such
reports are made concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
39
(b) A copy of such report shall, at the time of such
transmission to holders of Notes, be filed by the Trustee with
each stock exchange and automated quotation system upon which the
Notes are listed and with the Company. The Company will notify
the Trustee in writing within a reasonable time when the Notes
are listed on any stock exchange or automated quotation system.
Section 6.4 Reports by Company. The Company shall file
with the Trustee (and the Commission if at any time after the
Indenture becomes qualified under the Trust Indenture Act), and
transmit to holders of Notes, such information, documents and
other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is
so required to be filed with the Commission.
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT
Section 7.1 Events of Default. In case one or more of the
following Events of Default (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any installment of
interest upon any of the Notes as and when the same shall
become due and payable, and continuance of such default for
a period of thirty (30) days, whether or not such payment is
permitted under Article IV hereof; or
(b) default in the payment of the principal of and
premium, if any, on any of the Notes as and when the same
shall become due and payable either at maturity or in
connection with any redemption pursuant to Article III, by
acceleration or otherwise, whether or not such payment is
permitted under Article IV hereof; or
(c) failure on the part of the Company duly to observe
or perform any other of the covenants or agreements on the
part of the Company in the Notes or in this Indenture (other
than a covenant or agreement a default in whose performance
or whose breach is elsewhere in this Section 7.1
specifically dealt with) continued for a period of sixty
(60) days after the date on which written notice of such
failure,
40
requiring the Company to remedy the same, shall have been
given to the Company by the Trustee, or to the Company and a
Responsible Officer of the Trustee by the holders of at
least 25 percent in aggregate principal amount of the Notes
at the time outstanding determined in accordance with
Section 9.4; or
(d) the Company shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its
debts as they become due; or
(e) an involuntary case or other proceeding shall be
commenced against the Company seeking liquidation,
reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of ninety (90)
consecutive days;
then, and in each and every such case (other than an Event of
Default specified in Section 7.1 (d) or (e)), unless the
principal of all of the Notes shall have already become due and
payable, either the Trustee or the holders of not less than 25
percent in aggregate principal amount of the Notes then
outstanding hereunder determined in accordance with Section 9.4,
by notice in writing to the Company (and to the Trustee if given
by Noteholders), may declare the principal of all the Notes and
the interest accrued thereon to be due and payable immediately,
and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the
Notes contained to the contrary notwithstanding. If an Event of
Default specified in Section 7.1(d) or (e) occurs, the principal
of all the Notes and the interest accrued thereon shall be
immediately and automatically due and payable without necessity
of further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes
shall have been so declared due and payable, and before any
judgment or decree for the payment of the monies due shall have
been obtained or entered as hereinafter provided, the Company
shall pay or shall deposit with the Trustee a sum sufficient to
pay all matured installments of interest upon all Notes and the
principal of and premium, if any, on any and all Notes which
shall have become due otherwise than by acceleration (with
interest on overdue installments of interest (to the extent that
payment of such interest is enforceable under applicable law) and
on such principal and premium, if any, at the rate borne by the
Notes, to the date of
41
such payment or deposit) and amounts due to the Trustee pursuant
to Section 8.6, and if any and all defaults under this Indenture,
other than the nonpayment of principal of and premium, if any,
and accrued interest on Notes which shall have become due by
acceleration, shall have been cured or waived pursuant to Section
7.7 -- then and in every such case the holders of a majority in
aggregate principal amount of the Notes then outstanding, by
written notice to the Company and to the Trustee, may waive all
defaults or Events of Default and rescind and annul such
declaration and its consequences; but no such waiver or
rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right
consequent thereon. The Company shall notify a Responsible
Officer of the Trustee, promptly upon becoming aware thereof, of
any Event of Default.
In case the Trustee shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been
discontinued or abandoned because of such waiver or rescission
and annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be
restored respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the Company,
the holders of Notes, and the Trustee shall continue as though no
such proceeding had been taken.
Section 7.2 Payments of Notes on Default; Suit. The
Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Notes as
and when the same shall become due and payable, and such default
shall have continued for a period of thirty (30) days, or (b) in
case default shall be made in the payment of the principal of or
premium, if any, on any of the Notes as and when the same shall
have become due and payable, whether at maturity of the Notes or
in connection with any redemption, by or under this Indenture
declaration or otherwise -- then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders
of the Notes, the whole amount that then shall have become due
and payable on all such Notes for principal and premium, if any,
or interest, or both, as the case may be, with interest upon the
overdue principal and premium, if any, and (to the extent that
payment of such interest is enforceable under applicable law)
upon the overdue installments of interest at the rate borne by
the Notes; 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, its agents,
attorneys and counsel, and any expenses or liabilities incurred
by the Trustee hereunder other than through its negligence or bad
faith. Until such demand by the Trustee, the Company may pay the
principal of and premium, if any, and interest on the Notes to
the registered holders, whether or not the Notes are overdue.
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 actions or proceedings at law or in equity for the collection
of the sums so due and unpaid, and may prosecute any such action
or proceeding to judgment or final
42
decree, and may enforce any such judgment or final decree against
the Company or any other obligor on the Notes and collect in the
manner provided by law out of the property of the Company or any
other obligor on the Notes wherever situated the monies adjudged
or decreed to be payable.
In the case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other
obligor on the Notes under Title 11 of the United States Code, or
any other applicable 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 such other obligor, the property of
the Company or such other obligor, or in the case of any other
judicial proceedings relative to the Company or such other
obligor upon the Notes, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable
as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 7.2, shall be entitled
and empowered, by intervention in such proceedings or otherwise,
to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in
respect of the Notes, and, in case of any judicial proceedings,
to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the
Trustee and of the Noteholders allowed in such judicial
proceedings relative to the Company or any other obligor on the
Notes, its or their creditors, or its or their property, and to
collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after
the deduction of any amounts due the Trustee under Section 8.6;
and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is
hereby authorized by each of the Noteholders to make such
payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due it for
reasonable compensation, expenses, advances and disbursements,
including counsel fees incurred by it up to the date of such
distribution. To the extent that such payment of reasonable
compensation, expenses, advances and disbursements out of the
estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be
paid out of, any and all distributions, dividends, monies,
securities and other property which the holders of the Notes may
be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the
Trustee without the possession of any of the Notes, or the
production thereof at any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall, after provision for
the payment of the reasonable
43
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the holders of the Notes.
In any proceedings brought by the Trustee (and in any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party) the Trustee
shall be held to represent all the holders of the Notes, and it
shall not be necessary to make any holders of the Notes parties
to any such proceedings.
Section 7.3 Application of Monies Collected by Trustee.
Any monies collected by the Trustee pursuant to this Article VII
shall be applied in the order following, at the date or dates
fixed by the Trustee for the distribution of such monies, upon
presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if
fully paid:
First: To the payment of all amounts due the Trustee
under Section 8.6;
Second: Subject to the provisions of Article IV, in
case the principal of the outstanding Notes shall not have
become due and be unpaid, to the payment of interest on the
Notes in default in the order of the maturity of the
installments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon
the overdue installments of interest at the rate borne by
the Notes, such payments to be made ratably to the persons
entitled thereto;
Third: Subject to the provisions of Article IV, in
case the principal of the outstanding Notes shall have
become due, by declaration or otherwise, and be unpaid to
the payment of the whole amount then owing and unpaid upon
the Notes for principal and premium, if any, and interest,
with interest on the overdue principal and premium, if any,
and (to the extent that such interest has been collected by
the Trustee) upon overdue installments of interest at the
rate borne by the Notes; and in case such monies shall be
insufficient to pay in full the whole amounts so due and
unpaid upon the Notes, then to the payment of such principal
and premium, if any, and interest without preference or
priority of principal and premium, if any, over interest, or
of interest over principal and premium, if any, or of any
installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the
aggregate of such principal and premium, if any, and accrued
and unpaid interest; and
Fourth: Subject to the provisions of Article IV, to
the payment of the remainder, if any, to the Company or any
other person lawfully entitled thereto.
Section 7.4 Proceedings by Noteholder. No holder of any
Note shall have any right by virtue of or by availing of any
provision of this Indenture to institute any suit, action
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or proceeding in equity or at law upon or under or with respect
to this Indenture, or for the appointment of a receiver, trustee,
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 an Event of Default and of the
continuance thereof, as hereinbefore provided, and unless also
the holders of not less than 25 percent in aggregate principal
amount of the Notes then outstanding shall have made written
request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for sixty (60) days
after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action,
suit or proceeding and no direction inconsistent with such
written request shall have been given to the Trustee pursuant to
Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with
every other taker and holder and the Trustee, that no one or more
holders of Notes shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other holder of
Notes, or to obtain or seek to obtain priority over or preference
to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Notes (except
as otherwise provided herein). For the protection and
enforcement of this Section 7.4, each and every Noteholder and
the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and
any provision of any Note, the right of any holder of any Note to
receive payment of the principal of and premium, if any, and
interest on such Note, on or after the respective due dates
expressed in such Note, or to institute suit for the enforcement
of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of
such holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of
either the Trustee or the holder of any other Note, in his own
behalf and for his own benefit, may enforce, and may institute
and maintain any proceeding suitable to enforce, his rights of
conversion as provided herein.
Section 7.5 Proceedings by Trustee. In case of an Event of
Default the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy
or otherwise, whether for the specific enforcement of any
covenant or agreement contained in this Indenture or in aid of
the exercise of any power granted in this Indenture, or to
enforce any other legal or equitable right vested in the Trustee
by this Indenture or by law.
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Section 7.6 Remedies Cumulative and Continuing. Except as
provided in Section 2.6, all powers and remedies given by this
Article VII to the Trustee or to the Noteholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive
of any thereof or of any other powers and remedies available to
the Trustee or the holders of the Notes, by judicial proceedings
or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no
delay or omission of the Trustee or of any holder of any of the
Notes to exercise any right or power accruing upon any default or
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 default or any acquiescence therein; and,
subject to the provisions of Section 7.4, every power and remedy
given by this Article VII or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Noteholders.
Section 7.7 Direction of Proceedings and Waiver of Defaults
by Majority of Noteholders. The holders of a majority in
aggregate principal amount of the Notes at the time outstanding
determined in accordance with Section 9.4 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; provided, however, that (a)
such direction shall not be in conflict with any rule of law or
with this Indenture, and (b) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent
with such direction. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined
in accordance with Section 9.4 may on behalf of the holders of
all of the Notes waive any past default or Event of Default
hereunder and its consequences except (i) a default in the
payment of interest or premium, if any, on, or the principal of,
the Notes, (ii) a failure by the Company to convert any Notes
into Common Stock, (iii) a default in the payment of redemption
price pursuant to Article III or (iv) a default in respect of a
covenant or provisions hereof which under Article XI cannot be
modified or amended without the consent of the holders of all
Notes then outstanding. Upon any such waiver the Company, the
Trustee and the holders of the Notes shall be restored to their
former positions and rights hereunder; but no such waiver shall
extend to any subsequent or other default or Event of Default or
impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by
this Section 7.7, said default or Event of Default shall for all
purposes of the Notes and this Indenture be deemed to have been
cured and to be not continuing; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair
any right consequent thereon.
Section 7.8 Notice of Defaults. The Trustee shall, within
ninety (90) days after a Responsible Officer of the Trustee has
knowledge of the occurrence of a default, mail to all
Noteholders, as the names and addresses of such holders appear
upon the Note register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured
or waived before the giving of such notice; and provided that,
except in the case of default in the payment of the principal of,
or premium, if any, or interest on any of the
46
Notes, the Trustee shall be protected in withholding such notice
if and so long as a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interests of the
Noteholders.
Section 7.9 Undertaking to Pay Costs. All parties to this
Indenture agree, and each holder of any Note 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 Indenture, 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 of the claims or defenses
made by such party litigant; provided that the provisions of this
Section 7.9 (to the extent permitted by law) shall not apply to
any suit instituted by the Trustee, to any suit instituted by any
Noteholder, or group of Noteholders, holding in the aggregate
more than ten percent in principal amount of the Notes at the
time outstanding determined in accordance with Section 9.4, or to
any suit instituted by any Noteholder for the enforcement of the
payment of the principal of or premium, if any, or interest on
any Note on or after the due date expressed in such Note or to
any suit for the enforcement of the right to convert any Note in
accordance with the provisions of Article XV.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee. The
Trustee, prior to the occurrence of an Event of Default and after
the curing 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 Indenture. In case an Event of
Default has occurred (which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
No provision of this Indenture 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
(a) prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which
may have occurred:
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(1) the duties and obligations of the
Trustee shall be determined solely by the express
provisions of this Indenture and the Trust Indenture
Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this
Indenture and the Trust Indenture Act against the
Trustee; and
(2) in the absence of bad faith and
willful misconduct on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any
such certificates or opinions which by any provisions
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 Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Officers of the Trustee, unless the Trustee was negligent in
ascertaining the pertinent facts;
(c) 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 written direction of the holders of
not less than a majority in principal amount of the Notes at
the time outstanding determined as provided in Section 9.4
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 Indenture;
(d) whether or not therein provided, every provision
of this Indenture relating to the conduct or affecting the
liability of, or affording protection to, the Trustee shall
be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of
any payment (as to the correctness of amount, entitlement to
receive or any other matters relating to payment) or notice
effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Notes;
and
(f) if any party fails to deliver a notice relating to
an event the fact of which, pursuant to this Indenture,
requires notice to be sent to the Trustee, the Trustee may
conclusively rely on its failure to receive such notice as
reason to act as if no such event occurred.
48
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
Section 8.2 Reliance on Documents, Opinions, Etc. Except as
otherwise provided in Section 8.1:
(a) the Trustee may rely and shall be protected in
acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent,
order, bond, debenture, note, coupon or other paper or
document believed by it in good faith to be genuine and to
have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the
Company mentioned herein shall be sufficiently evidenced by
an Officers' Certificate (unless other evidence in respect
thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the
Trustee by a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;
(c) the Trustee may consult with counsel and any
advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken
or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the
Noteholders pursuant to the provisions of this Indenture,
unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally
or by agent or attorney; and
49
(f) 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 by
it with due care hereunder.
Section 8.3 No Responsibility for Recitals, Etc. The
recitals contained herein and in the Notes (except in the
Trustee's certificate of authentication) shall be taken as the
statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee
makes no representations as to the validity or sufficiency of
this Indenture or of the Notes. The Trustee shall not be
accountable for the use or application by the Company of any
Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 8.4 Trustee, Paying Agents, Conversion Agents or
Registrar May Own Notes. The Trustee, any paying agent, any
conversion agent or Note registrar, in its individual or any
other capacity, may become the owner or pledgee of Notes with the
same rights it would have if it were not Trustee, paying agent,
conversion agent or Note registrar.
Section 8.5 Monies to Be Held in Trust. Subject to the
provisions of Section 13.4 and Section 4.2, all monies received
by the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received.
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 except as may be agreed from time to
time by the Company and the Trustee.
Section 8.6 Compensation and Expenses of Trustee. The
Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable
compensation for all services rendered by it hereunder in any
capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as
mutually agreed to in writing between the Company and the
Trustee, and the Company will pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and
advances reasonably incurred or made by the Trustee in accordance
with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except
any such expense, disbursement or advance as may arise from its
negligence, willful misconduct, recklessness or bad faith. The
Company also covenants to indemnify the Trustee in any capacity
under this Indenture and its agents and any authenticating agent
for, and to hold them harmless against, any loss, liability or
expense incurred without negligence, willful misconduct,
recklessness, or bad faith on the part of the Trustee or such
agent or authenticating agent, as the case may be, and arising
out of or in connection with the acceptance or administration of
this trust or in any other capacity hereunder, including the
costs and expenses of defending themselves against any claim of
liability in the premises.
50
The obligations of the Company under this Section 8.6 to
compensate or indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall be secured
by a lien prior to that of the Notes upon all property and funds
held or collected by the Trustee as such, except funds held in
trust for the benefit of the holders of particular Notes. The
obligation of the Company under this Section shall survive the
satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent
incur expenses or render services after an Event of Default
specified in Section 7.1(d) or (e) occurs, the expenses and the
compensation for the services are intended to constitute expenses
of administration under any bankruptcy, insolvency or similar
laws.
Section 8.7 Officers' Certificate as Evidence. Except as
otherwise provided in Section 8.1, whenever in the administration
of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established
prior to taking or omitting any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful
misconduct, recklessness, or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by
an Officers' Certificate delivered to the Trustee.
Section 8.8 Conflicting Interests of Trustee. If the
Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
Section 8.9 Eligibility of Trustee. There shall at all
times be a Trustee hereunder which shall be a Person 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 person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or
examining authority, then for the purposes of this Section, the
combined capital and surplus of such person shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
Section 8.10 Resignation or Removal of Trustee
(a) The Trustee may at any time resign by giving written
notice of such resignation to the Company and to the holders of
Notes. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor trustee by written instrument,
in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor
51
trustee shall have been so appointed and have accepted
appointment sixty (60) days after the mailing of such notice of
resignation to the Noteholders, the resigning Trustee may
petition any court of competent jurisdiction for the appointment
of a successor trustee, or any Noteholder who has been a bona
fide holder of a Note or Notes for at least six months may,
subject to the provisions of Section 7.9, on behalf of himself
and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
(1) the Trustee shall fail to comply
with Section 8.8 after written request therefor by the
Company or by any Noteholder who has been a bona fide
holder of a Note or Notes for at least six months; or
(2) the Trustee shall cease to be
eligible in accordance with the provisions of Section
8.9 and shall fail to resign after written request
therefor by the Company or by any such Noteholder; 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 such case, the Company may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee, or, subject to the provisions of
Section 7.9, any Noteholder who has been a bona fide holder of a
Note or Notes 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. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount
of the Notes at the time outstanding may at any time remove the
Trustee and nominate a successor trustee which shall be deemed
appointed as successor trustee unless within ten ( 10) days after
notice to the Company of such nomination the Company objects
thereto, in which case the Trustee so removed or any Noteholder,
upon the terms and conditions and otherwise as in Section 8.10(a)
provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.
52
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the
provisions of this Section 8.10 shall become effective upon
acceptance of appointment by the successor trustee as provided in
Section 8.11.
Section 8.11 Acceptance by Successor Trustee. Any successor
trustee appointed as provided in Section 8.10 shall execute,
acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Company
or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the
provisions of Section 8.6, execute and deliver an instrument
transferring to such successor trustee all the rights and powers
of the trustee so ceasing to act. Upon request of any such
successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in
and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a
lien upon all property and funds held or collected by such
trustee as such, except for funds held in trust for the benefit
of holders of particular Notes, to secure any amounts then due it
pursuant to the provisions of Section 8.6.
No successor trustee shall accept appointment as provided in
this Section 8.11 unless at the time of such acceptance such
successor trustee shall be qualified under the provisions of
Section 8.8 and be eligible under the provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.11, the Company (or the former
trustee, at the written direction of the Company) shall mail or
cause to be mailed notice of the succession of such trustee
hereunder to the holders of Notes at their addresses as they
shall appear on the Note register. If the Company fails to mail
such notice within ten (10) days after acceptance of appointment
by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
Section 8.12 Succession by Merger, Etc. 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 (including any
trust created by this Indenture), shall be the successor to the
Trustee hereunder without the execution or filing of any paper or
any further act on the part of any of the parties hereto,
provided that in the case of any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee
such corporation shall be qualified under the provisions of
Section 8.8 and eligible under the provisions of Section 8.9.
53
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture, any of the Notes
shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall
not have been authenticated, any successor to the Trustee or an
authenticating agent appointed by such successor trustee may
authenticate such Notes either in the name of any predecessor
trustee hereunder or in the name of the successor trustee; and in
all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that
the certificate of the Trustee shall have; provided, however,
that the right to adopt the certificate of authentication of any
predecessor Trustee or authenticate Notes in the name of any
predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
Section 8.13 Limitation on Rights of Trustee as Creditor.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Notes), the Trustee shall
be subject to the provisions of the Trust Indenture Act regarding
the collection of the claims against the Company (or any such
other obligor).
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1 Action by Noteholders. Whenever in this
Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Notes may take
any action (including the making of any demand or request, the
giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such
action, the holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by Noteholders in person or
by agent or proxy appointed in writing, or (b) by the record of
the holders of Notes voting in favor thereof at any meeting of
Noteholders duly called and held in accordance with the
provisions of Article X, or (c) by a combination of such
instrument or instruments and any such record of such a meeting
of Noteholders. Whenever the Company or the Trustee solicits the
taking of any action by the holders of the Notes, the Company or
the Trustee may fix in advance of such solicitation, a date as
the record date for determining holders entitled to take such
action. The record date shall be not more than fifteen (15) days
prior to the date of commencement of solicitation of such action.
Section 9.2 Proof of Execution by Noteholders. Subject to
the provisions of Sections 8.1, 8.2 and 10.5, proof of the
execution of any instrument by a Noteholder or his agent or proxy
shall be sufficient if made in accordance with such reasonable
rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to
54
the Trustee. The holding of Notes shall be proved by the
registry of such Notes or by a certificate of the Note registrar.
The record of any Noteholders' meeting shall be proved in
the manner provided in Section 10.6.
Section 9.3 Who Are Deemed Absolute. The Company, the
Trustee, any paying agent, any conversion agent and any Note
registrar may deem the person in whose name such Note shall be
registered upon the Note register to be, and may treat him as,
the absolute owner of such Note (whether or not such Note shall
be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on
account of the principal of, premium, if any, and interest on
such Note, for conversion of such Note and for all other
purposes; and neither the Company nor the Trustee nor any paying
agent nor any conversion agent nor any Note registrar shall be
affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall
be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies
payable upon any such Note.
Section 9.4 Company-Owned Notes Disregarded. In
determining whether the holders of the requisite aggregate
principal amount of Notes have concurred in any direction,
consent, waiver or other action under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or any
Affiliate of the Company or any other obligor on the Notes shall
be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of
determining whether the Trustee shall be protected in relying on
any such direction, consent, waiver or other action only Notes
which a Responsible Officer knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this
Section 9.4 if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right to vote such Notes and that the
pledgee is not the Company, any other obligor on the Notes or any
Affiliate of the Company or any such other obligor. In the case
of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the
Trustee. Upon request of the Trustee, the Company shall furnish
to the Trustee promptly an Officers' Certificate listing and
identifying all Notes, if any, known by the Company to be owned
or held by or for the account of any of the above described
persons; and, subject to Section 8.1, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all
Notes not listed therein are outstanding for the purpose of any
such determination.
Section 9.5 Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 9.1, of the taking of any action
by the holders of the percentage in aggregate principal amount of
the Notes specified in this Indenture in connection with such
action, any holder of a Note which is shown by the
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evidence to be included in the Notes the holders of which have
consented to such action may, by filing written notice with the
Trustee at its Corporate Trust Office and upon proof of holding
as provided in Section 9.2, revoke such action so far as concerns
such Note. Except as aforesaid, any such action taken by the
holder of any Note shall be conclusive and binding upon such
holder and upon all future holders and owners of such Note and of
any Notes issued in exchange or substitution therefor,
irrespective of whether any notation in regard thereto is made
upon such Note or any Note issued in exchange or substitution
therefor.
ARTICLE X
NOTEHOLDERS' MEETINGS
Section 10.1 Purpose of Meetings. A meeting of Noteholders
may be called at any time and from time to time pursuant to the
provisions of this Article X for any of the following purposes:
(1) to give any notice to the Company or to the
Trustee or to give any directions to the Trustee permitted
under this Indenture, or to consent to the waiving of any
default or Event of Default hereunder and its consequences,
or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article
VII;
(2) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article VIII;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of
Section 11.2; or
(4) to take any other action authorized to be
taken by or on behalf of the holders of any specified
aggregate principal amount of the Notes under any other
provision of this Indenture or under applicable law.
Section 10.2 Call of Meetings by Trustee. The Trustee may
at any time call a meeting of Noteholders to take any action
specified in Section 10.1, to be held at such time and at such
place as the Trustee shall determine. Notice of every meeting of
the Noteholders, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at
such meeting and the establishment of any record date pursuant to
Section 9.1, shall be mailed to holders of Notes at their
addresses as they shall appear on the Note register. Such notice
shall also be mailed to the Company. Such notices
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shall be mailed not less than twenty (20) nor more than ninety
(90) days prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if
the holders of all Notes then outstanding are present in person
or by proxy or if notice is waived before or after the meeting by
the holders of all Notes outstanding, and if the Company and the
Trustee are either present by duly authorized representatives or
have, before or after the meeting, waived notice.
Section 10.3 Call of Meetings by Company or Noteholders.
In case at any time the Company, pursuant to a resolution of its
Board of Directors, or the holders of at least ten percent in
aggregate principal amount of the Notes then outstanding, shall
have requested the Trustee to call a meeting of Noteholders, by
written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not
have mailed the notice of such meeting within twenty (20) days
after receipt of such request, then the Company or such
Noteholders may determine the time and the place for such meeting
and may call such meeting to take any action authorized in
Section 10.1, by mailing notice thereof as provided in Section
10.2.
Section 10.4 Qualifications for Voting. To be entitled to
vote at any meeting of Noteholders a person shall (a) be a holder
of one or more Notes on the record date pertaining to such
meeting or (b) be a person appointed by an instrument in writing
as proxy by a holder of one or more Notes. The only persons who
shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting
and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
Section 10.5 Relations. Notwithstanding any other
provisions of this Indenture, the Trustee may make such
reasonable regulations as it may deem advisable for any meeting
of Noteholders, in regard to proof of the holding of Notes and of
the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have
been called by the Company or by Noteholders as provided in
Section 10.3, in which case the Company or the Noteholders
calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of
the holders of a majority in principal amount of the Notes
represented at the meeting and entitled to vote at the meeting.
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Subject to the provisions of Section 9.4, at any meeting
each Noteholder or proxyholder shall be entitled to one vote for
each $1,000 principal amount of Notes held or represented by him;
provided, however, that no vote shall be cast or counted at any
meeting in respect of any Note challenged as not outstanding and
ruled by the chairman of the meeting to be not outstanding. The
chairman of the meeting shall have no right to vote other than by
virtue of Notes held by him or instruments in writing as
aforesaid duly designating him as the proxy to vote on behalf of
other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.2 or 10.3 may be
adjourned from time to time by the holders of a majority of the
aggregate principal amount of Notes represented at the meeting,
whether or not constituting a quorum, and the meeting may be held
as so adjourned without further notice.
Section 10.6 Voting. The vote upon any resolution
submitted to any meeting of Noteholders shall be by written
ballot on which shall be subscribed the signatures of the holders
of Notes or of their representatives by proxy and the principal
amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes
cast at the meeting. A record in duplicate of the proceedings of
each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was mailed as provided in
Section 10.2. The record shall show the principal amount of the
Notes voting in favor of or against any resolution. The record
shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one of the duplicates
shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting.
Any record so signed and verified shall be conclusive
evidence of the matters therein stated.
Section 10.7 No Delay of Rights by Meeting. Nothing in
this Article X contained shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of
Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the
Trustee or to the Noteholders under any of the provisions of this
Indenture or of the Notes.
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ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 Supplemental Indentures Without Consent of
Noteholders. The Company, when authorized by the resolutions of
the Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) to make provision with respect to the
conversion rights of the holders of Notes pursuant to the
requirements of Section 15.6 and the redemption obligations
of the Company pursuant to the requirements of Section
3.5(e);
(b) subject to Article IV, to convey, transfer,
assign, mortgage or pledge to the Trustee as security for
the Notes, any property or assets;
(c) to evidence the succession of another
corporation to the Company, or successive successions, and
the assumption by the successor corporation of the
covenants, agreements and obligations of the Company
pursuant to Article XII;
(d) to add to the covenants of the Company such
further covenants, restrictions or conditions as the Board
of Directors and the Trustee shall consider to be for the
benefit of the holders of Notes, and to make the occurrence,
or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default
or an Event of Default permitting the enforcement of all or
any of the several remedies provided in this Indenture as
herein set forth; provided, however, that in respect of any
such additional covenant, restriction or condition such
supplemental indenture 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 default
or may limit the remedies available to the Trustee upon such
default;
(e) to provide for the issuance under this
Indenture of Notes in coupon form (including Notes
registrable as to principal only) and to provide for
exchangeability of such Notes with the Notes issued
hereunder in fully registered form and to make all
appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or
supplement any provision contained herein or in any
supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in
any supplemental indenture, or to make such other provisions
in regard to matters or questions arising
59
under this Indenture which shall not materially adversely
affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to
the Notes; or
(h) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary to
effect the qualifications of this Indenture under the Trust
Indenture Act, or under any similar federal statute
hereafter enacted.
Upon the written request of the Company, accompanied by a
copy of the resolutions of the Board of Directors certified by
its Secretary or Assistant Secretary authorizing the execution of
any supplemental indenture, the Trustee is hereby authorized to
join with the Company in the execution of any such supplemental
indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder,
but the Trustee shall not be obligated to, but may in its
discretion, enter into any supplemental indenture which affects
the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 11.1 may be executed by the Company and the Trustee
without the consent of the holders of any of the Notes at the
time outstanding, notwithstanding any of the provisions of
Section 11.2.
Section 11.2 Supplemental Indentures with Consent of
Noteholders. With the consent (evidenced as provided in Article
IX) of the holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, the
Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or any
supplemental indenture or of modifying in any manner the rights
of the holders of the Notes; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any
Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on
redemption thereof, or impair the right of any Noteholder to
institute suit for the payment thereof, or make the principal
thereof or interest or premium, if any, thereon payable in any
coin or currency other than that provided in the Notes, or modify
the provisions of this Indenture with respect to the
subordination of the Notes in a manner adverse to the Noteholders
in any material respect, or change the obligation of the Company
to redeem any Note upon the happening of a Fundamental Change in
a manner adverse to the holder of Notes, or impair the right to
convert the Notes into Common Stock subject to the terms set
forth herein, including Section 15.6, without the consent of the
holder of each Note so affected, or (ii) reduce the aforesaid
percentage of
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Notes, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all
Notes then outstanding.
Upon the written request of the Company, accompanied by a
copy of the resolutions of the Board of Directors certified by
its Secretary or Assistant Secretary authorizing the execution of
any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Noteholders as aforesaid,
the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects
the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in is
discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Noteholders
under this Section 11.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if
such consent shall approve the substance thereof.
Section 11.3 Effect of Supplemental Indenture. Any
supplemental indenture executed pursuant to the provisions of
this Article XI shall comply with the Trust Indenture Act, as
then in effect; provided that this Section 11.3 shall not require
such supplemental indenture or the Trustee to be qualified under
the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or
the Indenture has been qualified under the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any
party to such supplemental indenture that any such qualification
is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the
Indenture has been qualified under the Trust Indenture Act. Upon
the execution of any supplemental indenture pursuant to the
provisions of this Article XI, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and
the holders of Notes shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of
any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all
purposes.
Section 11.4 Notation on Notes. Notes authenticated and
delivered after the execution of any supplemental indenture
pursuant to the provisions of this Article XI may bear a notation
in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of
this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the
Company, authenticated by the Trustee (or an authenticating agent
duly appointed by the Trustee pursuant to Section 16.11) and
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delivered in exchange for the Notes then outstanding, upon
surrender of such Notes then outstanding.
Section 11.5 Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee. Prior to entering into any
supplemental indenture, the Trustee may request an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant hereto complies with
the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 Company May Consolidate Etc. on Certain Terms.
Subject to the provisions of Section 12.2, nothing contained in
this Indenture or in any of the Notes shall prevent any
consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the
Company or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance or lease (or
successive sales, conveyances or leases) of all or substantially
all of the property of the Company, to any other corporation
(whether or not affiliated with the Company), authorized to
acquire and operate the same and which shall be organized under
the laws of the United States of America, any state thereof or
the District of Columbia; provided, that upon any such
consolidation, merger, sale, conveyance or lease, the due and
punctual payment of the principal of and premium, if any, and
interest on all of the Notes, according to their tenor, and the
due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the
Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to
the Trustee by the corporation (if other than the Company) formed
by such consolidation, or into which the Company shall have been
merged, or by the corporation which shall have acquired or leased
such property, and such supplemental indenture shall provide for
the applicable conversion rights set forth in Section 15.6.
Section 12.2 Successor Corporation to Be Substituted. In
case of any such consolidation, merger, sale, conveyance or lease
and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on
all of the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by
the Company, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had
been named herein as the party of the first part. Such successor
corporation thereupon may cause to be signed, and may issue
either in its own name or in
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the name of MedImmune, Inc. any or all of the Notes issuable
hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all
the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or
cause to be authenticated and delivered, any Notes which
previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Notes
which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All the
Notes so issued shall in all respects have the same legal rank
and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the
execution hereof. In the event of any such consolidation,
merger, sale, conveyance or lease, the person named as the
"Company" in the first paragraph of this Indenture or any
successor which shall thereafter have become such in the manner
prescribed in this Article XII may be dissolved, wound up and
liquidated at any time thereafter and such person shall be
released from its liabilities as obligor and maker of the Notes
and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance
or lease, such changes in phraseology and form (but not in
substance) may be made in the Notes thereafter to be issued as
may be appropriate.
Section 12.3 Opinion of Counsel to Be Given Trustee. The
Trustee shall receive an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any such consolidation,
merger, sale, conveyance or lease and any such assumption
complies with the provisions of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture. When (a) the Company
shall deliver to the Trustee for cancellation all Notes
theretofore authenticated (other than any Notes which have been
destroyed, lost or stolen and in lieu of or in substitution for
which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not
theretofore canceled or delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company
shall deposit with the Trustee, in trust, funds sufficient to pay
at maturity or upon redemption of all of the Notes (other than
any Notes which shall have been mutilated, destroyed, lost or
stolen and in lieu of or in substitution for which other Notes
shall have been authenticated and delivered) not
63
theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and
interest due or to become due to such date of maturity or
redemption date, as the case may be, accompanied by a
verification report, as to the sufficiency of the deposited
amount, from an independent certified accountant or other
financial professional satisfactory to the Trustee, and if the
Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be
of further effect (except as to (i) remaining rights of
registration of transfer, substitution and exchange and
conversion of Notes, (ii) rights hereunder of Noteholders to
receive payments of principal of and premium, if any, and
interest on, the Notes and the other rights, duties and
obligations of Noteholders, as beneficiaries hereof with respect
to the amounts, if any, so deposited with the Trustee and (iii)
the rights, obligations and immunities of the Trustee hereunder),
and the Trustee, on written demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel as required by
Section 16.5 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agreeing
to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred by the Trustee and to compensate
the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the
Notes.
Section 13.2 Deposited Monies to Be Held in Trust by
Trustee. Subject to Section 13.4, all monies deposited with the
Trustee pursuant to Section 13.1, provided such deposit was not
in violation of Article IV, shall be held in trust for the sole
benefit of the Noteholders and not to be subject to the
subordination provisions of Article IV, and such monies shall be
applied by the Trustee to the payment, either directly or through
any paying agent (including the Company if acting as its own
paying agent), to the holders of the particular Notes for the
payment or redemption of which such monies have been deposited
with the Trustee, of all sums due and to become due thereon for
principal and interest and premium, if any.
Section 13.3 Paying Agent to Repay Monies Held. Upon the
satisfaction and discharge of this Indenture, all monies then
held by any paying agent of the Notes (other than the Trustee)
shall, upon written request of the Company, be repaid to it or
paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
Section 13.4 Return of Unclaimed Monies. Subject to the
requirements of applicable law, any monies deposited with or paid
to the Trustee for payment of the principal of, premium, if any,
or interest on Notes and not applied but remaining unclaimed by
the holders of Notes for two years after the date upon which the
principal of, premium, if any, or interest on such Notes, as the
case may be, shall have become due and payable, shall be repaid
to the Company by the Trustee on demand and all liability of the
Trustee shall thereupon cease with respect to such monies; and
the holder of any of the Notes shall
64
thereafter look only to the Company for any payment which such
holder may be entitled to collect unless an applicable abandoned
property law designates another Person.
Section 13.5 Reinstatement. If the Trustee or the paying
agent is unable to apply any money in accordance with Section
13.2 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under
this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 13.1 until
such time as the Trustee or the paying agent is permitted to
apply all such money in accordance with Section 13.2; provided,
however, that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the
holders of such Notes to receive such payment from the money held
by the Trustee or paying agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 Indenture and Notes Solely Corporate
Obligations. No recourse for the payment of the principal of or
premium, if any, or interest on any Note, or for any claim based
thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture or in any Note, or
because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee,
agent, officer, or director or subsidiary, as such, past, present
or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue
of the Notes.
ARTICLE XV
CONVERSION OF NOTES
Section 15.1 Right to Convert. Subject to and upon
compliance with the provisions of this Indenture, including
without limitation Article IV, the holder of any Note shall have
the right, at his option, at any time after ninety (90) days
following the latest date of original issuance of the Notes and
prior to the close of business on July 1, 2003 (except
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that, with respect to any Note or portion of a Note which shall
be called for redemption, such right shall terminate, except as
provided in Section 15.2 or Section 3.4, at the close of business
on the Business Day next preceding the date fixed for redemption
of such Note or portion of a Note unless the Company shall
default in payment due upon redemption thereof) to convert the
principal amount of any such Note, or any portion of such
principal amount which is $1,000 or an integral multiple thereof,
into that number of fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted) obtained
by dividing the principal amount of the Note or portion thereof
surrendered for conversion by the Conversion Price in effect at
such time, by surrender of the Note so to be converted in whole
or in part in the manner provided, together with any required
funds, in Section 15.2. A holder of Notes is not entitled to any
rights of a holder of Common Stock until such holder has
converted his Notes to Common Stock, and only to the extent such
Notes are deemed to have been converted to Common Stock under
this Article XV.
Section 15.2 Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for Interest or
Dividends. In order to exercise the conversion privilege with
respect to any Note in certificated form, the holder of any such
Note to be converted in whole or in part shall surrender such
Note, duly endorsed, at an office or agency maintained by the
Company pursuant to Section 5.2, accompanied by the funds, if
any, required by the penultimate paragraph of this Section 15.2,
and shall give written notice of conversion in the form provided
on the Notes (or such other notice which is acceptable to the
Company) to the office or agency that the holder elects to
convert such Note or the portion thereof specified in said
notice. Such notice shall also state the name or names (with
address or addresses) in which the certificate or certificates
for shares of Common Stock which shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer
taxes, if required pursuant to Section 15.7. Each such Note
surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the registration
of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly
executed by, the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect
to any interest in a Note in global form, the beneficial holder
must complete the appropriate instruction form for conversion
pursuant to the Depository's book-entry conversion program,
deliver by book-entry delivery an interest in such Note in global
form, furnish appropriate endorsements and transfer documents if
required by the Company or the Trustee or conversion agent, and
pay the funds, if any, required by this Section 15.2 and any
transfer taxes if required pursuant to Section 15.7.
As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to
compliance with any restrictions on transfer if shares issuable
on conversion are to be issued in a name other than that of the
Noteholder (as if such transfer
66
were a transfer of the Note or Notes (or portion thereof) so
converted), the Company shall issue and shall deliver to such
holder at the office or agency maintained by the Company for such
purpose pursuant to Section 5.2, a certificate or certificates
for the number of full shares of Common Stock issuable upon the
conversion of such Note or portion thereof in accordance with the
provisions of this Article and a check or cash in respect of any
fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 15.3. In case any
Note of a denomination greater than $1,000 shall be surrendered
for partial conversion, and subject to Section 2.3, the Company
shall execute and the Trustee shall authenticate and deliver to
the holder of the Note so surrendered, without charge to him, a
new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the
surrendered Note.
Each conversion shall be deemed to have been effected as to
any such Note (or portion thereof) on the date on which the
requirements set forth above in this Section 15.2 have been
satisfied as to such Note (or portion thereof), and the person in
whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to
have become on said date the holder of record of the shares
represented thereby; provided, however, that any such surrender
on any date when the stock transfer books of the Company shall be
closed shall constitute the person in whose name the certificates
are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price in
effect on the date upon which such Note shall be surrendered.
Any Note or portion thereof surrendered for conversion
during the period from the close of business on the record date
for any interest payment date to the close of business on the
Business Day next preceding the following interest payment date
shall (unless such Note or portion thereof being converted shall
have been called for redemption on a redemption date which occurs
during the period from the close of business on such record date
to the close of business on the Business Day next preceding the
following interest payment date) be accompanied by payment, in
New York Clearing House funds or other funds acceptable to the
Company, of an amount equal to the interest otherwise payable on
such interest payment date on the principal amount being
converted; provided, however, that no such payment need be made
if there shall exist at the time of conversion a default in the
payment of interest on the Notes. Except as provided above in
this Section 15.2, no payment or other adjustment shall be made
for interest accrued on any Note converted or for dividends on
any shares issued upon the conversion of such Note as provided in
this Article.
Upon the conversion of an interest in a Note in global form,
the Trustee (or other conversion agent appointed by the Company),
or the Custodian at the direction of the Trustee (or other
conversion agent appointed by the Company), shall make a notation
on such Note in global form as to the reduction in the principal
amount represented thereby. The
67
Company shall notify the Trustee in writing of any conversions of
Notes effected through any conversion agent other than the
Trustee.
Section 15.3 Cash Payments in Lieu of Fractional Shares.
No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon conversion of Notes. If
more than one Note shall be surrendered for conversion at one
time by the same holder, the number of full shares which shall be
issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Notes (or specified portions
thereof to the extent permitted hereby) so surrendered. If any
fractional share of stock would be issuable upon the conversion
of any Note or Notes, the Company shall make an adjustment and
payment therefor in cash at the current market value thereof to
the holder of Notes. The current market value of a share of
Common Stock shall be the Closing Price on the first Business Day
immediately preceding the day on which the Notes (or specified
portions thereof) are deemed to have been converted.
Section 15.4 Conversion Price. The conversion price shall
be as specified in the form of Note (herein called the
"Conversion Price") attached as Exhibit A hereto, subject to
adjustment as provided in this Article XV.
Section 15.5 Adjustment of Conversion Price. The
Conversion Price shall be adjusted from time to time by the
Company as follows:
(a) In case the Company shall hereafter pay a
dividend or make a distribution to all holders of the
outstanding Common Stock in shares of Common Stock, the
Conversion Price in effect at the opening of business on the
date following the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such Conversion
Price by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or
other distribution, such reduction to become effective
immediately after the opening of business on the day
following the date fixed for such determination. The
Company will not pay any dividend or make any distribution
on shares of Common Stock held in the treasury of the
Company. If any dividend or distribution of the type
described in this Section 15.5(a) is declared but not so
paid or made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if
such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or
warrants to all holders of its outstanding shares of Common
Stock entitling them (for a period expiring within 45 days
after the date fixed for determination of stockholders
entitled to receive such rights or warrants) to subscribe
for or purchase shares of Common Stock
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at a price per share less than the Current Market Price (as
defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants,
the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date
fixed for determination of stockholders entitled to receive
such rights or warrants by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for determination of
stockholders entitled to receive such rights and warrants
plus the number of shares which the aggregate offering price
of the total number of shares so offered would purchase at
such Current Market Price, and of which the denominator
shall be the number of shares of Common Stock outstanding on
the date fixed for determination of stockholders entitled to
receive such rights and warrants plus the total number of
additional shares of Common Stock offered for subscription
or purchase. Such adjustment shall be successively made
whenever any such rights and warrants are issued, and shall
become effective immediately after the opening of business
on the day following the date fixed for determination of
stockholders entitled to receive such rights or warrants.
To the extent that shares of Common Stock are not delivered
after the expiration of such rights or warrants, the
Conversion Price shall be readjusted to the Conversion Price
which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common
Stock actually delivered. In the event that such rights or
warrants are not so issued, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be
in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market
Price, and in determining the aggregate offering price of
such shares of Common Stock, there shall be taken into
account any consideration received by the Company for such
rights or warrants, the value of such consideration, if
other than cash, to be determined by the Board of Directors.
(c) In case outstanding shares of Common Stock
shall be subdivided into a greater number of shares of
Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such
subdivision becomes effective shall be proportionately
reduced, and conversely, in case outstanding shares of
Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Price in effect at
the opening of business on the day following the day upon
which such combination becomes effective shall be
proportionately increased, such reduction or increase, as
the case may be, to become effective immediately after the
opening of business on the day following the day upon which
such subdivision or combination becomes effective.
69
(d) In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock
shares of any class of capital stock of the Company (other
than any dividends or distributions to which Section 15.5(a)
applies) or evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants
referred to in Section 15.5(b), and excluding any dividend
or distribution (x) paid exclusively in cash or (y) referred
to in Section 15.5(a) (any of the foregoing hereinafter in
this Section 15.5(d) called the "Securities")), then, in
each such case (unless the Company elects to reserve such
Securities for distribution to the Noteholders upon the
conversion of the Notes so that any such holder converting
Notes will receive upon such conversion, in addition to the
shares of Common Stock to which such holder is entitled, the
amount and kind of such Securities which such holder would
have received if such holder had converted its Notes into
Common Stock immediately prior to the Record Date (as
defined in Section 15.5(i) for such distribution of the
Securities)), the Conversion Price shall be reduced so that
the same shall be equal to the price determined by
multiplying the Conversion Price in effect on the Record
Date with respect to such distribution by a fraction of
which the numerator shall be the Current Market Price per
share of the Common Stock on such Record Date less the fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a
resolution of the Board if Directors) on the Record Date of
the portion of the Securities so distributed applicable to
one share of Common Stock and the denominator shall be the
Current Market Price per share of the Common Stock, such
reduction to become effective immediately prior to the
opening of business on the day following such Record Date;
provided, however, that in the event the then fair market
value (as so determined) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price of the Common
Stock on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon conversion
the amount of Securities such holder would have received had
such holder converted each Note on the Record Date. In the
event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such
dividend or distribution had not been declared. If the
Board of Directors determines the fair market value of any
distribution for purposes of this Section 15.5(d) by
reference to the actual or when issued trading market for
any securities, it must in doing so consider the prices in
such market over the same period used in computing the
Current Market Price of the Common Stock.
Rights or warrants distributed by the Company to all
holders of Common Stock entitling the holders thereof to
subscribe for or purchase shares of the Company's capital
stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed
to be transferred with such shares of Common Stock; (ii) are
not
70
exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 15.5 (and no
adjustment to the Conversion Price under this Section 15.5
will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Price
shall be made under this Section 15.5(d). If any such right
or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject
to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different
securities, evidences of indebtedness or other assets, then
the date of the occurrence of any and each such event shall
be deemed to be the date of distribution and record date
with respect to new rights or warrants with such rights (and
a termination or expiration of the existing rights or
warrants without exercise by any of the holders thereof).
In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or
other event (of the type described in the preceding
sentence) with respect thereto that was counted for purposes
of calculating a distribution amount for which an adjustment
to the Conversion Price under this Section 15.5 was made,
(1) in the case of any such rights or warrants which shall
all have been redeemed or repurchased without exercise by
any holders thereof, the Conversion Price shall be
readjusted upon such final redemption or repurchase to give
effect to such distribution or Trigger Event, as the case
may be, as though it were a cash distribution, equal to the
per share redemption or repurchase price received by a
holder or holders of Common Stock with respect to such
rights or warrants (assuming such holder had retained such
rights or warrants), made to all holders of Common Stock as
of the date of such redemption or repurchase, and (2) in the
case of such rights or warrants which shall have expired or
been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and
warrants had not been issued.
For purposes of this Section 15.5(d) and Sections
15.5(a) and (b), any dividend or distribution to which this
Section 15.5(d) is applicable that also includes shares of
Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed
instead to be (1) a dividend or distribution of the
evidences of indebtedness, assets or shares of capital stock
other than such shares of Common Stock or rights or warrants
(and any Conversion Price reduction required by this Section
15.5(d) with respect to such dividend or distribution shall
then be made) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights
or warrants (and any further Conversion Price reduction
required by Sections 15.5(a) and (b) with respect to such
dividend or distribution shall then be made), except (A) the
Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution" and "the date
71
fixed for such determination" within the meaning of
Sections 15.5(a) and (b) and (B) any shares of Common Stock
included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date
fixed for such determination" within the meaning of Section
15.5(a).
(e) In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock
cash (excluding (x) any quarterly cash dividend on the
Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed
the greater of (A) the amount per share of Common Stock of
the next preceding quarterly cash dividend on the Common
Stock to the extent that such preceding quarterly dividend
did not require any adjustment of the Conversion Price
pursuant to this Section 15.5(e) (as adjusted to reflect
subdivisions or combinations of the Common Stock), and (B)
3.75% of the arithmetic average of the Closing Price
(determined as set forth in Section 15.5(i)) during the ten
Trading Days (as defined in Section 15.5(i)) immediately
prior to the date of declaration of such dividend, and (y)
any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary), then, in such case, the
Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business
on such Record Date by a fraction of which the numerator
shall be the Current Market Price of the Common Stock on the
Record Date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of
Common Stock and the denominator shall be such Current
Market Price of the Common Stock, such reduction to be
effective immediately prior to the opening of business on
the day following the Record Date; provided, however, that
in the event the portion of the cash so distributed
applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on
the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder
shall have the right to receive upon conversion the amount
of cash such holder would have received had such holder
converted each Note on the Record Date. In the event that
such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such
dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this
Section 15.5(e) as a result of a distribution that is a
quarterly dividend, such adjustment shall be based upon the
amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant
hereto. If an adjustment is required to be made as set
forth in this Section 15.5(e) above as a result of a
distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the
distribution.
72
(f) In case a tender or exchange offer made by the
Company or any subsidiary of the Company for all or any
portion of the Common Stock shall expire and such tender or
exchange offer (as amended upon the expiration thereof)
shall require the payment to stockholders of consideration
per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the
Board of Directors) that as of the last time (the
"Expiration Time") tenders or exchanges may be made pursuant
to such tender or exchange offer (as it may be amended) that
exceeds the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, the
Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion
Price in effect immediately prior to the Expiration Time by
a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered
or exchanged shares) on the Expiration Time multiplied by
the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to
shareholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration
Time, such reduction to become effective immediately prior
to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated
to purchase shares pursuant to any such tender or exchange
offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in
effect if such tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by
a person other than the Company or any Subsidiary for an
amount which increases the offeror's ownership of Common
Stock to more than 25% of the Common Stock outstanding and
shall involve the payment by such person of consideration
per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the
Board of Directors) at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that exceeds
the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, and in which, as of
the Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Price
shall be reduced so
73
that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior
to the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the
Expiration Time multiplied by the Current Market Price of
the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x)
the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product
of the number of shares of Common Stock outstanding (less
any Purchased Shares) on the Expiration Time and the Current
Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on
the day following the Expiration Time. In the event that
such person is obligated to purchase shares pursuant to any
such tender or exchange offer, but such person is
permanently prevented by applicable law from effecting any
such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such
tender or exchange offer had not been made. Notwithstanding
the foregoing, the adjustment described in this Section
15.5(g) shall not be made if, as of the Expiration Time, the
offering documents with respect to such offer disclose a
plan or intention to cause the Company to engage in any
transaction described in Article XII.
(h) In case the Company shall issue Common
Stock or securities convertible into, or exchangeable for,
Common Stock at a price per share (or having a conversion or
exchange price per share) that is less than the then Current
Market Price of the Common Stock (but excluding, among other
things, issuances: (a) pursuant to any bona fide plan for
the benefit of employees, directors or consultants of the
Company now or hereafter in effect; (b) to acquire all or
any portion of a business in an arm's-length transaction
between the Company and an unaffiliated third party
including, if applicable, issuances upon exercise of options
or warrants assumed in connection with such an acquisition;
(c) in a bona fide public offering pursuant to a firm
commitment underwriting (or a similar type of offering made
pursuant to Rule 144A and/or Regulation S under the
Securities Act) or sales at the market pursuant to a
continuous offering stock program; (d) pursuant to the
exercise of warrants, rights (including, without limitation,
earnout rights) or options, or upon the conversion of
convertible securities, which are issued and outstanding on
the date hereof, or which may be issued in the future at
fair value and with an exercise price or conversion price at
least equal to the Current Market Price of the Common Stock
at the time of issuance of such warrant, right, option or
convertible security; and (e) pursuant to a dividend
reinvestment plan or other plan hereafter adopted for the
reinvestment of
74
dividends or interest provided that such Common Stock is
issued at a price at least equal to 95% of the market price
of the Common Stock at the time of such issuance), the
Conversion Price shall be adjusted so that the holder of
each Note shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by
multiplying (i) the Conversion Price on the day immediately
prior to such date of issuance by (ii) a fraction, the
numerator of which shall be the sum of (A) the number of
shares of Common Stock outstanding on such date and (B) the
number of additional shares of Common Stock issued (or into
which the convertible securities may convert), and the
denominator of which shall be the sum of (1) the number of
shares of Common Stock outstanding on such date and (2) the
number of shares of Common Stock which the aggregate
consideration receivable by the Company for the total number
of shares of Common Stock so issued (or into which the
convertible securities may convert) would purchase at such
Conversion Price on such date. An adjustment made pursuant
to this paragraph (h) shall be made on the next Business Day
following the date on which any such issuance is made and
shall be effective retroactively immediately after the close
of business on such date. For purposes of this paragraph
(h), the aggregate consideration receivable by the Company
in connection with the issuance of shares of Common Stock or
of securities convertible into shares of Common Stock shall
be deemed to be equal to the sum of the aggregate offering
price (before deduction of underwriting discounts or
commissions and expenses payable to third parties) of all
such securities plus the minimum aggregate amount, if any,
payable upon conversion of any such convertible securities
into shares of Common Stock.
(i) For purposes of this Section 15.5, the
following terms shall have the meaning indicated:
(1) "Closing Price" with respect to any
securities on any day shall mean the closing sale price
regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing
bid and asked prices, regular way, in each case on the
New York Stock Exchange, or, if such security is not
listed or admitted to trading on such Exchange, on the
principal national security exchange or quotation
system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or
admitted to trading on any national securities exchange
or quotation system, the average of the closing bid and
asked prices of such security on the over-the-counter
market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or if not so
available, in such manner as furnished by any New York
Stock Exchange member firm selected from time to time
by the Board of Directors for that purpose, or a price
determined in good faith by the Board of
75
Directors or, to the extent permitted by applicable
law, a duly authorized committee thereof, whose
determination shall be conclusive.
(2) "Current Market Price" shall mean the
average of the daily Closing Prices per share of Common
Stock for the ten consecutive Trading Days immediately
prior to the date in question; provided, however, that
(1) if the "ex" date (as hereinafter defined) for any
event (other than the issuance or distribution or
Fundamental Change requiring such computation) that
requires an adjustment to the Conversion Price pursuant
to Section 15.5(a), (b), (c), (d), (e), (f), (g) or (h)
occurs during such ten consecutive Trading Days, the
Closing Price for each Trading Day prior to the "ex"
date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by
which the Conversion Price is so required to be
adjusted as a result of such other event, (2) if the
"ex" date for any event (other than the issuance,
distribution or Fundamental Change requiring such
computation) that requires an adjustment to the
Conversion Price pursuant to Section 15.5(a), (b), (c),
(d), (e), (f), (g) or (h) occurs on or after the "ex"
date for the issuance or distribution requiring such
computation and prior to the day in question, the
Closing Price for each Trading Day on and after the
"ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the
fraction by which the Conversion Price is so required
to be adjusted as a result of such other event, and (3)
if the "ex" date for the issuance, distribution or
Fundamental Change requiring such computation is prior
to the day in question, after taking into account any
adjustment required pursuant to clause (1) or (2) of
this proviso, the Closing Price for each Trading Day on
or after such "ex" date shall be adjusted by adding
thereto the amount of any cash and the fair market
value (as determined by the Board of Directors or, to
the extent permitted by applicable law, a duly
authorized committee thereof in a manner consistent
with any determination of such value for purposes of
Section 15.5(d), (f) or (g), whose determination shall
be conclusive and described in a resolution of the
Board of Directors or such duly authorized committee
thereof, as the case may be) of the evidences of
indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock as
of the close of business on the day before such "ex"
date. For purposes of any computation under Section
15.5(f) or (g), the Current Market Price of the Common
Stock on any date shall be deemed to be the average of
the daily Closing Prices per share of Common Stock for
such day and the next two succeeding Trading Days;
provided, however, that if the "ex" date for any event
(other than the tender or exchange offer requiring such
computation) that requires an adjustment to the
Conversion Price pursuant to Section 15.5(a), (b), (c),
(d), (e), (f), (g) or (h) occurs on or after the
Expiration Time for the tender or exchange offer
requiring such computation
76
and prior to the day in question, the Closing Price for
each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by
which the Conversion Price is so required to be
adjusted as a result of such other event. For purposes
of this paragraph, the term "ex" date, (1) when used
with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way
on the relevant exchange or in the relevant market from
which the Closing Price was obtained without the right
to receive such issuance or distribution, (2) when used
with respect to any subdivision or combination of
shares of Common Stock, means the first date on which
the Common Stock trades regular way on such exchange or
in such market after the time at which such subdivision
or combination becomes effective, and (3) when used
with respect to any tender or exchange offer means the
first date on which the Common Stock trades regular way
on such exchange or in such market after the Expiration
Time of such offer.
(3) "fair market value" shall mean the
amount which a willing buyer would pay a willing seller
in an arm's length transaction.
(4) "Record Date" shall mean, with respect
to any dividend, distribution or other transaction or
event in which the holders of Common Stock have the
right to receive any cash, securities or other property
or in which the Common Stock (or other applicable
security) is exchanged for or converted into any
combination of cash, securities or other property, the
date fixed for determination of shareholders entitled
to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors
or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the
applicable security is listed or admitted for trading
on the New York Stock Exchange or another national
security exchange, a day on which the New York Stock
Exchange or another national security exchange is open
for business or (y) if the applicable security is
quoted on the Nasdaq National Market, a day on which
trades may be made on thereon or (z) if the applicable
security is not so listed, admitted for trading or
quoted, any day other than a Saturday or Sunday or a
day on which banking institutions in the State of New
York are authorized or obligated by law or executive
order to close.
(j) The Company may make such reductions in the
Conversion Price, in addition to those required by Sections
15.5 (a), (b), (c), (d), (e), (f), (g) and (h) as the Board
of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any
77
dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax
purposes.
To the extent permitted by applicable law, the Company
from time to time may reduce the Conversion Price by any
amount for any period of time if the period is at least
twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a
determination that such reduction would be in the best
interests of the Company, which determination shall be
conclusive. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail
to holders of record of the Notes a notice of the reduction
at least fifteen (15) days prior to the date the reduced
Conversion Price takes effect, and such notice shall state
the reduced Conversion Price and the period during which it
will be in effect.
(k) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however,
that any adjustments which by reason of this Section 15.5(k)
are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Article XV shall be made by the
Company and shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be. No
adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or
interest. To the extent the Notes become convertible into
cash, assets, property or securities (other than capital
stock of the Company), no adjustment need be made thereafter
as to the cash, assets, property or such securities.
Interest will not accrue on the cash.
(l) Whenever the Conversion Price is adjusted as
herein provided, the Company shall promptly file with the
Trustee and any conversion agent other than the Trustee an
Officers' Certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Promptly after
delivery of such certificate, the Company shall prepare a
notice of such adjustment of the Conversion Price setting
forth the adjusted Conversion Price and the date on which
each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Price to the holder of
each Note at his last address appearing on the Note register
provided for in Section 2.5 of this Indenture, within 20
days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of any such
adjustment.
(m) In any case in which this Section 15.5
provides that an adjustment shall become effective
immediately after a record date for an event, the Company
may defer until the occurrence of such event (i) issuing to
the holder of any Note converted after such record date and
before the occurrence of such event the
78
additional shares of Common Stock issuable upon such
conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 15.3.
(n) For purposes of this Section 15.5, the number
of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall
include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution
on shares of Common Stock held in the treasury of the
Company.
Section 15.6 Effect of Reclassification, Consolidation,
Merger or Sale. If any of the following events occur, namely (i)
any reclassification or change of the outstanding shares of
Common Stock (other than a subdivision or combination to which
Section 15.5(c) applies), (ii) any consolidation, merger or
combination of the Company with another corporation as a result
of which holders of Common Stock shall be entitled to receive
stock, securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of the properties and assets of the
Company as, or substantially as, an entirety to any other
corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common
Stock, then the Company or the successor or purchasing
corporation, as the case may be, shall execute with the Trustee a
supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such
supplemental indenture) providing that such Note shall be
convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares
of Common Stock issuable upon conversion of such Notes (assuming,
for such purposes, a sufficient number of authorized shares of
Common Stock available to convert all such Notes) immediately
prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance assuming such holder of Common
Stock did not exercise his rights of election, if any, as to the
kind or amount of securities, cash or other property receivable
upon such consolidation, merger, statutory exchange, sale or
conveyance (provided that, if the kind or amount of securities,
cash or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("nonelecting share")),
then for the purposes of this Section 15.6 the kind and amount of
securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance for
each non-electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing
shares. Such supplemental indenture shall provide for
79
adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each holder of Notes, at
his address appearing on the Note register provided for in
Section 2.5 of this Indenture, within twenty (20) days after
execution thereof. Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply
to successive reclassifications, changes, consolidations,
mergers, combinations, sales and conveyances.
If this Section 15.6 applies to any event or occurrence,
Section 15.5 shall not apply.
Section 15.7 Taxes on Shares Issued. The issue of stock
certificates on conversions of Notes shall be made without charge
to the converting Noteholder for any tax in respect of the issue
thereof. The Company shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in
the issue and delivery of stock in any name other than that of
the holder of any Note converted, and the Company shall not be
required to issue or deliver any such stock certificate unless
and until the person or persons requesting the issue thereof
shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax
has been paid.
Section 15.8 Reservation of Shares; Shares to Be Fully
Paid; Compliance with Governmental Requirements; Listing of
Common Stock. The Company shall provide, free from preemptive
rights, out of its authorized but unissued shares or shares held
in treasury, sufficient shares of Common Stock to provide for the
conversion of the Notes from time to time as such Notes are
presented for conversion.
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value, if any,
of the shares of Common Stock issuable upon conversion of the
Notes, the Company will take all corporate action which may, in
the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock
at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Notes will upon issue be fully
paid and non-assessable by the Company and free from all taxes,
liens and charges with respect to the issue thereof.
The Company covenants that if any shares of Common Stock to
be provided for the purpose of conversion of Notes hereunder
require registration with or approval of any governmental
authority under any federal or state law before such shares may
be validly
80
issued upon conversion, the Company will in good faith and as
expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
The Company further covenants that if at any time the Common
Stock shall be listed on the Nasdaq National Market or any other
national securities exchange or automated quotation system the
Company will, if permitted by the rules of such exchange or
automated quotation system, list and keep listed, so long as the
Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of
the Notes; provided, however, that if rules of such exchange or
automated quotation system permit the Company to defer the
listing of such Common Stock until the first conversion of the
Notes into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Notes in accordance with the
requirements of such exchange or automated quotation system at
such time.
Section 15.9 Responsibility of Trustee. The Trustee and
any other conversion agent shall not at any time be under any
duty or responsibility to any holder of Notes to determine the
Conversion Price or whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature
or extent or calculation of any such adjustment when made, or
with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the
same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the
conversion of any Note; and the Trustee and any other conversion
agent make no representations with respect thereto. Neither the
Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares
of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose
of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this
Article. Without limiting the generality of the foregoing,
neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to
Section 15.6 relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by
Noteholders upon the conversion of their Notes after any event
referred to in such Section 15.6 or to any adjustment to be made
with respect thereto, but, subject to the provisions of Section
8.1, may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, the
Officers' Certificate (which the Company shall be obligated to
file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
81
Section 15.10 Notice to Holders Prior to Certain Actions.
In case:
(a) the Company shall declare a dividend (or any
other distribution) on its Common Stock that would require
an adjustment in the Conversion Price pursuant to Section
15.5; or
(b) the Company shall authorize the granting to
the holders of its Common Stock of rights or warrants to
subscribe for or purchase any share of any class or any
other rights or warrants; or
(c) of any reclassification or reorganization of
the Common Stock of the Company (other than a subdivision or
combination of its outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to
which the Company is a party and for which approval of any
shareholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the
Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be
mailed to each holder of Notes at his address appearing on the
Note register provided for in Section 2.5 of this Indenture, as
promptly as possible but in any event at least fifteen (15) days
prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights or warrants, or,
if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (y) the date on
which such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up is expected to
become effective or occur, and the date as of which it is
expected that holders of Common Stock of record shall be entitled
to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up. Failure
to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
82
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors.
All the covenants, stipulations, promises and agreements by the
Company contained in this Indenture shall bind its successors and
assigns whether so expressed or not.
Section 16.2 Official Acts by Successor Corporation. Any
act or proceeding by any provision of this Indenture authorized
or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with
like force and effect by the like board, committee or officer of
any corporation that shall at the time be the lawful sole
successor of the Company.
Section 16.3 Addresses for Notices, Etc. Any notice or
demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders
of Notes on the Company shall be deemed to have been sufficiently
given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a
post office letter box addressed (until another address is filed
by the Company with the Trustee) to MedImmune, Inc., 35 West
Watkins Mill Road, Gaithersburg, Maryland 20878, Attention:
Chief Operating Officer. Any notice, direction, request or
demand hereunder to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or
served by being deposited postage prepaid by registered or
certified mail in a post office letter box addressed to the
Corporate Trust Office, which office is, at the date as of which
this Indenture is dated, located at Norwest Bank Minnesota,
National Association, Norwest Center, Sixth and Marquette,
Minneapolis, MN 55479.
The Trustee, by notice to the Company, may designate
additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Noteholder shall be
mailed to him by first class mail, postage prepaid, at his
address as it appears on the Note register and shall be
sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Noteholder or
any defect in it shall not affect its sufficiency with respect to
other Noteholders. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the
addressee receives it.
Section 16.4 Governing Law. This Indenture and each Note
shall be deemed to be a contract made under the laws of New York,
and for all purposes shall be construed in accordance with the
laws of New York.
83
Section 16.5 Evidence of Compliance with Conditions
Precedent; Certificates to Trustee. Upon any application or
demand by the Company to the Trustee to take any action under any
of the provisions of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture 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 have been complied with.
Each certificate or opinion provided for in this Indenture
and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall
include (1) a statement that the person making such certificate
or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or
investigation upon which the statement or opinion contained in
such certificate or opinion is based; (3) a statement that, in
the opinion of such person, 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 (4) a statement as to whether or not,
in the opinion of such person, such condition or covenant has
been complied with.
Section 16.6 Legal Holidays. In any case where the date of
maturity of interest on or principal of the Notes or the date
fixed for redemption of any Note will not be a Business Day, then
payment of such interest on or principal of the Notes 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 of maturity or the date fixed for redemption, and no
interest shall accrue for the period from and after such date.
Section 16.7 Trust Indenture Act. This Indenture is hereby
made subject to, and shall be governed by, the provisions of the
Trust Indenture Act required to be part of and to govern
indentures qualified under the Trust Indenture Act; provided,
however, that, unless otherwise required by law, notwithstanding
the foregoing, this Indenture and the Notes issued hereunder
shall not be subject to the provisions of subsections (a)(1),
(a)(2), and (a)(3) of Section 314 of the Trust Indenture Act as
now in effect or as hereafter amended or modified; provided,
further, that this Section 16.7 shall not require this Indenture
or the Trustee to be qualified under the Trust Indenture Act
prior to the time such qualification is in fact required under
the terms of the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental
indenture that any such qualification is required prior to the
time such qualification is in fact required under the terms of
the Trust Indenture Act. If any provision hereof limits,
qualifies or conflicts with another provision hereof which is
required to be included in an indenture qualified under the Trust
Indenture Act, such required provision shall control.
Section 16.8 No Security Interest Created. Nothing in this
Indenture or in the Notes, expressed or implied, shall be
construed to constitute a security interest under the
84
Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction where
property of the Company or its subsidiaries is located.
Section 16.9 Benefits of Indenture. Nothing in this
Indenture or in the Notes, expressed or implied, shall give to
any Person, other than the parties hereto, any paying agent, any
authenticating agent, any Note registrar and their successors
hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 16.10 Table of Contents, Headings, Etc. The table of
contents and the titles and headings of the articles and sections
of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 16.11 Authenticating Agent. The Trustee may appoint
an authenticating agent which shall be authorized to act on its
behalf and subject to its direction in the authentication and
delivery of Notes in connection with the original issuance
thereof and transfers and exchanges of Notes hereunder, including
under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to all
intents and purposes as though the authenticating agent had been
expressly authorized by this Indenture and those Sections to
authenticate and deliver Notes. For all purposes of this
Indenture, the authentication and delivery of Notes by the
authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of
authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement
hereunder or in the Notes for the Trustee's certificate of
authentication. Such authenticating agent shall at all times be
a person eligible to serve as trustee hereunder pursuant to
Section 8.9.
Any corporation into which any authenticating agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or
conversion to which any authenticating agent shall be a party, or
any corporation succeeding to the corporate trust business of any
authenticating agent, shall be the successor of the
authenticating agent hereunder, if such successor corporation is
otherwise eligible under this Section 16.11, without the
execution or filing of any paper or any further act on the part
of the parties hereto or the authenticating agent or such
successor corporation.
Any authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company.
The Trustee may at any time terminate the agency of any
authenticating agent by giving written notice of termination to
such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in
case at any time any authenticating agent shall cease to be
eligible under this Section, the Trustee shall either promptly
appoint a successor
85
authenticating agent or itself assume the duties and obligations
of the former authenticating agent under this Indenture, and upon
such appointment of a successor authenticating agent, if made,
shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such
appointment of a successor authenticating agent to all holders of
Notes as the names and addresses of such holders appear on the
Note register.
The Trustee agrees to pay to the authenticating agent from
time to time reasonable compensation for its services (to the
extent pre-approved by the Company in writing), and the Trustee
shall be entitled to be reimbursed for such pre-approved
payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this
Section 16.11 shall be applicable to any authenticating agent.
Section 16.12 Execution in Counterparts. This Indenture may
be executed in any number of counterparts, each of which shall be
an original, but such counterparts shall together constitute but
one and the same instrument.
Norwest Bank Minnesota, National Association hereby accepts
the trusts in this Indenture declared and provided, upon the
terms and conditions hereinabove set forth.
86
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of July 8,
1996.
MEDIMMUNE, INC.
By /s/David M. Mott
Name: David M. Mott
Title: President and
Chief Operation Officer
[CORPORATE SEAL]
Attest:
By /s/Carol A. Iorio
Name: Carol A. Iorio
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
TRUSTEE
By /s/Curtis D. Schwegman
Name: Curtis D. Schwegman
Title: Corporate Trust Officer
[CORPORATE SEAL]
Attest:
By /s/Raymond S. Haverstock
Name: Raymond S. Haverstock
EXHIBIT A
[For global Note only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,
NEW YORK, NEW YORK) (THE "DEPOSITARY," WHICH TERM INCLUDES ANY
SUCCESSOR DEPOSITARY FOR THE CERTIFICATES) TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DEPOSITARY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE
NOTE EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT
IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO MEDIMMUNE,
INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER
THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL FURNISH TO NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THE NOTE EVIDENCED HEREBY PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX
SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER
OF THE TRANSFER OF THE NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE
1(F) ABOVE OR UPON ANY TRANSFER OF THE NOTES EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
MEDIMMUNE, INC.
7% CONVERTIBLE SUBORDINATED NOTE DUE 2003
No. __ CUSIP
MedImmune, Inc., a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called
the "Company"), which term includes any successor corporation
under the Indenture referred to on the reverse hereof, for value
received hereby promises to pay to CEDE & CO. or registered
assigns, the principal sum of ____________ ($________ ) on July
1, 2003, at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, or,
at the option of the holder of this Note, at the Corporate Trust
Office, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment
of public and private debts, and to pay interest, semi-annually
on January 1 and July 1 of each year, commencing January 1, 1997,
on said principal sum at said office or agency, in like coin or
currency, at the rate per annum of 7%, from January 1 or July 1,
as the case may be, next preceding the date of this Note to which
interest has been paid or duly provided for, unless the date
hereof is a date to which interest has been paid or duly provided
for, in which case from the date of this Note, or unless no
interest has been paid or duly provided for on the Notes, in
which case from July 8, 1996, until payment of said principal sum
has been made or duly provided for. Notwithstanding the
foregoing, if the date hereof is after any December 15 or June
15, as the case may be, and before the following January 1 or
July 1, this Note shall bear interest from such January 1 or July
1; provided, however, that if the Company shall default in the
payment of interest due on such January 1 or July 1, then this
Note shall bear interest from the next preceding January 1 or
July 1 to which interest has been paid or duly provided for or,
if no interest has been paid or duly provided for on such Note,
from July 8, 1996. The interest payable on the Note pursuant to
the Indenture on any January 1 or July 1 will be paid to the
person entitled thereto as it appears in the Note register at the
close of business on the record date, which shall be the December
15 or June 15 (whether or not a Business Day) next preceding such
January 1 or July 1, as provided in the Indenture; provided that
any such interest not punctually paid or duly provided for shall
be payable as provided in the Indenture. Interest may, at the
option of the Company, be paid either (i) by check mailed to the
registered address of such person or (ii) by transfer to an
account maintained by such person located in the United States.
Interest on the Notes shall be computed on the basis of a
year of twelve 30-day months.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, including, without limitation,
provisions subordinating the payment of principal of and premium,
if any, and interest on the Notes to the prior payment in full of
all Senior Indebtedness, as defined in the Indenture, and
provisions giving the holder of this Note the right to convert
this Note into Common Stock of the Company on the terms and
subject to the limitations referred to on the reverse hereof and
as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Note shall be deemed to be a contract made under the
laws of the State of New York, and for all purposes shall be
construed in accordance with and governed by the laws of said
State.
This Note shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have
been manually signed by the Trustee or a duly authorized
authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be
duly executed under its corporate seal.
Dated: MEDIMMUNE, INC.
By:
______________________
Attest:_________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the
within-named Indenture.
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee
By:__________________________________________________
Authorized Signatory
By:___________________________________________________
As Authenticating Agent (if different from Trustee)
[FORM OF REVERSE OF NOTE]
MEDIMMUNE, INC.
7% CONVERTIBLE SUBORDINATED NOTE DUE 2003
This Note is one of a duly authorized issue of Notes of the
Company, designated as its 7% Convertible Subordinated Notes due
2003 (herein called the "Notes"), limited to the aggregate
principal amount of $69,000,000 all issued or to be issued under
and pursuant to an indenture dated as of July 8, 1996 (herein
called the "Indenture"), between the Company and Norwest Bank
Minnesota, National Association as trustee (herein called the
"Trustee"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the
Notes.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of and
accrued interest on all Notes may be declared, and upon said
declaration shall become, due and payable, in the manner, with
the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Notes at the time
outstanding, evidenced as in the Indenture provided, to execute
supplemental indentures adding any provisions to or changing in
any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the
rights of the holders of the Notes; provided, however, that no
such supplemental indenture shall (i) extend the fixed maturity
of any Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on
redemption thereof, or impair the right of any Noteholder to
institute suit for the payment thereof, or make the principal
thereof or interest or premium, if any, thereon payable in any
coin or currency other than that provided in the Note, or modify
the provisions of the Indenture with respect to the subordination
of the Notes in a manner adverse to the Noteholders in any
material respect, or change the obligation of the Company to make
redemption of any Note upon the happening of a Fundamental Change
in a manner adverse to the holder of the Notes, or impair the
right to convert the Notes into Common Stock subject to the terms
set forth in the Indenture, including Section 15.6 thereof,
without the consent of the holder of each Note so affected or
(ii) reduce the aforesaid percentage of Notes, the holders of
which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding.
It is also provided in the Indenture that, prior to any
declaration accelerating the maturity of the Notes, the holders
of a majority in aggregate principal amount of the Notes at the
time outstanding may on behalf of the holders of all of the Notes
waive any past default or Event of Default under the Indenture
and its consequences except a default in the payment of interest
or any premium on or the principal of any of the Notes, a default
in the payment of redemption price pursuant to Article III or a
failure by the Company to convert any Notes into Common Stock of
the Company. Any such consent or waiver by the holder of this
Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued
in exchange or substitute hereof, irrespective of whether or not
any notation thereof is made upon this Note or such other Notes.
The indebtedness evidenced by the Notes is, to the extent
and in the manner provided in the Indenture, expressly
subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, as defined in
the Indenture, whether outstanding at the date of the Indenture
or thereafter incurred, and this Note is issued subject to the
provisions of the Indenture with respect to such subordination.
Each holder of this Note, by accepting the same, agrees to and
shall be bound by such provisions and authorizes the Trustee on
its behalf to take such action as may be necessary or appropriate
to effectuate the subordination so provided and appoints the
Trustee his attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this Note
at the place, at the respective times, at the rate and in the
coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a
year of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000. At
the office or agency of the Company referred to on the face
hereof, and in the manner and subject to the limitations provided
in the Indenture, without payment of any service charge but with
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a
like aggregate principal amount of Notes of other authorized
denominations.
The Notes will not be redeemable at the option of the
Company prior to July 7, 1999. At any time on or after July 7,
1999, and prior to maturity the Notes may be redeemed at the
option of the Company as a whole, or from time to time in part,
upon mailing a notice of such redemption not less than 30 days
before the date fixed for redemption to the holders of Notes at
their last registered addresses, all as provided in the
Indenture, at the following optional redemption prices (expressed
as percentages of the principal amount), together in each case
with accrued interest to, but excluding, the date fixed for
redemption.
If redeemed during the 12-month period beginning July 1:
Year Percentage Year Percentage
1999 104.00% 2001 102.00%
2000 103.00 2002 101.00
and 100% at July 1, 2003; provided that if the date fixed for
redemption is on January 1 or July 1, then the interest payable
on such date shall be paid to the holder of record on the next
preceding December 15 or June 15, respectively.
The Notes are not subject to redemption through the
operation of any sinking fund.
If a Fundamental Change (as defined in the Indenture) occurs
at any time prior to July 1, 2003, the Notes will be redeemable
on the 30th day after notice thereof at the option of the holder.
Such payment shall be made at the following prices (expressed as
percentages of the principal amount) in the event of a
Fundamental Change occurring during the 12-month period beginning
July 1:
Year Percentage Year Percentage
1996 107.00% 2000 103.00%
1997 106.00 2001 102.00
1998 105.00 2002 101.00
1999 104.00
and 100% at July 1, 2003; provided in each case that if the
Applicable Price (as defined in the Indenture) is less than the
Reference Market Price (as defined in the Indenture), the Company
shall redeem such Notes at a price equal to the foregoing
repayment price multiplied by the fraction obtained by dividing
the Applicable Price by the Reference Market Price. In each
case, the Company shall also pay accrued interest, if any, on
such Notes to, but excluding, the repayment date; provided that
if such repayment date is January 1 or July 1, then the interest
payable on such date shall be paid to the holder of record of the
Note on the next preceding December 15 or June 15. The Company
shall mail to all holders of record of the Notes a notice of the
occurrence of a Fundamental Change and of the redemption right
arising as a result thereof on or before the 10th day after the
occurrence of such Fundamental Change. For a Note to be so
repaid at the option of the holder, the Company must receive at
the office or agency of the Company maintained for that purpose
in accordance with the terms of the Indenture, such Note with the
form entitled "Option to Elect Repayment Upon a Fundamental
Change" on the reverse thereof duly completed, together with such
Notes duly endorsed for transfer, on or before the 30th day after
the date of such notice (or if such 30th day is not a Business
Day, the immediately preceding Business Day).
Subject to the provisions of the Indenture, the holder
hereof has the right, at its option, at any time after 90 days
following the latest date of original issuance of the Notes and
prior to the close of business on July 1, 2003, or, as to all or
any portion hereof called for redemption, prior to the close of
business on the Business Day immediately preceding the date fixed
for redemption (unless the Company shall default in payment due
upon redemption thereof), to convert the principal hereof or any
portion of such principal which is $1,000 or an integral multiple
thereof, into that number of shares of Company's Common Stock, as
said shares shall be constituted at the date of conversion,
obtained by dividing the principal amount of this Note or portion
thereof to be converted by the Conversion Price of $19.68 or such
Conversion Price as adjusted from time to time as provided in the
Indenture, upon surrender of this Note, together with a
conversion notice as provided in the Indenture, to the Company at
the office or agency of the Company maintained for that purpose
in accordance with the terms of the Indenture, or at the option
of such holder, the Corporate Trust Office, and, unless the
shares issuable on conversion are to be issued in the same name
as this Note, duly endorsed by, or accompanied by instruments of
transfer in form satisfactory to the Company duly executed by,
the holder or by his duly authorized attorney. No adjustment in
respect of interest or dividends will be made upon any
conversion; provided, however, that if this Note shall be
surrendered for conversion during the period from the close of
business on any record date for the payment of interest to the
close of business on the Business Day preceding the interest
payment date, this Note (unless it or the portion being converted
shall have been called for redemption during the period from the
close of business on any record date for the payment of interest
to the close of business on the Business Day preceding the
interest payment date) must be accompanied by an amount, in New
York Clearing House funds or other funds acceptable to the
Company, equal to the interest payable on such interest payment
date on the principal amount being converted. No fractional
shares will be issued upon any conversion, but an adjustment in
cash will be made, as provided in the Indenture, in respect of
any fraction of a share which would otherwise be issuable upon
the surrender of any Note or Notes for conversion.
Any Notes called for redemption, unless surrendered for
conversion on or before the close of business on the date fixed
for redemption, may be deemed to be purchased from the holder of
such Notes at an amount equal to the applicable redemption price,
together with accrued interest to the date fixed for redemption,
by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Notes from the holders
thereof and convert them into Common Stock of the Company and to
make payment for such Notes as aforesaid to the Trustee in trust
for such holders.
Upon due presentment for registration of transfer of this
Note at the office or agency of the Company maintained for that
purpose in accordance with the terms of the Indenture, or at the
option of the holder of this Note, at the Corporate Trust Office,
a new Note or Notes of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in
exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any
paying agent, any conversion agent and any Note registrar may
deem and treat the registered holder hereof as the absolute owner
of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar), for
the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither
the Company nor the Trustee nor any other authenticating agent
nor any paying agent nor any other conversion agent nor any Note
registrar shall be affected by any notice to the contrary. All
payments made to or upon the order of such registered holder
shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Note.
No recourse for the payment of the principal of or any
premium or interest on this Note, or for any claim based hereon
or otherwise in respect hereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Indenture
or any indenture supplemental thereto or in any Note, or because
of the creation of any indebtedness represented thereby, shall be
had against any incorporator, stockholder, employee, agent,
officer or director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and
released.
Terms used in this Note and defined in the Indenture are
used herein as therein defined.
ABBREVIATIONS
The following abbreviations, when used in the inscription of
the face of this Note, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - ___________ Custodian __________
(Cust) (Minor)
under Uniform Gifts to Minors Act
______________________________________________
(State)
Additional abbreviations may also be used
though not in the above list.
CONVERSION NOTICE
To: MEDIMMUNE, INC.
The undersigned registered owner of this Note hereby
irrevocably exercises the option to convert this Note, or the
portion hereof (which is $1,000 or an integral multiple thereof)
below designated, into shares of Common Stock of MedImmune, Inc.
in accordance with the terms of the Indenture referred to in this
Note, and directs that the shares issuable and deliverable upon
such conversion, together with any check in payment for
fractional shares and any Notes representing any unconverted
principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Note not
converted are to be issued in the name of a person other than the
undersigned, the undersigned will check the appropriate box below
and pay all transfer taxes payable with respect thereto. Any
amount required to be paid to the undersigned on account of
interest accompanies this Note.
Dated:____________________
_________________________________
_________________________________
Signature(s)
Signature(s) must be guaranteed by
a commercial bank or trust company
or a member firm of a major stock
exchange if shares of Common Stock
are to be issued, or Notes to be
delivered, other than to and in the
name of the registered holder.
_________________________________
Signature Guarantee
Fill in for registration of
shares of Common Stock if to be issued, and
Notes if to be delivered,
other than to and in the name
of the registered holder:
_____________________________
(Name)
_____________________________
(Street Address)
_____________________________
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all): $___________
______________________________
Social Security or Other
Taxpayer Identification Number
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
To: MEDIMMUNE, INC.
The undersigned registered owner of this Note hereby
irrevocably acknowledges receipt of a notice from MedImmune, Inc.
(the "Company") as to the occurrence of a Fundamental Change with
respect to the Company and requests and instructs the Company to
repay the entire principal amount of this Note, or the portion
thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture
referred to in this Note at the redemption price, together with
accrued interest to, but excluding, such date, to the registered
holder hereof.
Dated: ______________________ ________________________
________________________
Signature(s)
NOTICE: The above signatures of
the holder(s) hereof must
correspond with the name as
written upon the face of the
Note in every particular without
alteration or enlargement or any
change whatever.
Principal amount to be converted
(if less than all):
$____________
____________________________
Social Security or Other
Taxpayer Identification Number
ASSIGNMENT
For value received ________________________ hereby sell(s),
assign(s) and transfer(s) unto _____________________ (Please
insert social security or other Taxpayer Identification Number of
assignee) the within Note, and hereby irrevocably constitutes and
appoints ________________ attorney to transfer the said Note on
the books of the Company, with full power of substitution in the
premises.
In connection with any transfer of the Note within the
period prior to the expiration of the holding period applicable
to sales thereof under Rule 144(k), under the Securities Act (or
any successor provision), the undersigned confirms that such Note
is being transferred:
To MedImmune, Inc. or a subsidiary thereof; or
Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
To an Institutional Accredited Investor pursuant to and
in compliance with the Securities Act of 1933, as
amended; or
Pursuant to and in compliance with Regulation S under
the Securities Act of 1933, as amended; or
Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms
that such Note is not being transferred to an "affiliate" of the
Company as defined in Rule 144 under the Securities Act of 1933,
as amended (an "Affiliate").
The transferee is an Affiliate of the Company.
Dated:____________________
_________________________________
_________________________________
Signature(s)
Signature(s) must be guaranteed by
a commercial bank or trust company
or a member firm of a major stock
exchange if shares of Common Stock
are to be issued, or Notes to be
delivered, other than to or in the
name of the registered holder.
______________________________
Signature
Guarantee
EXHIBIT 4.4
[CONFORMED COPY]
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of July 8, 1996, by and among MedImmune,
Inc., a Delaware corporation (the "Company") and Morgan Stanley &
Co. Incorporated (the "Initial Purchaser") pursuant to the
Placement Agreement, dated as of July 8, 1996 (the "Placement
Agreement"), between the Company and the Initial Purchaser. In
order to induce the Initial Purchaser to enter into the Placement
Agreement the Company has agreed to provide the registration
rights set forth in this Agreement. The execution of this
Agreement is a condition to the closing under the Placement
Agreement.
The Company agrees with the Initial Purchaser, (i) for its
benefit as Initial Purchaser and (ii) for the benefit of the
holders from time to time of the Notes (including the Initial
Purchaser) and the holders from time to time of the Common Stock
issued upon conversion of the Notes (each of the foregoing a
"Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the
Placement Agreement. As used in this Agreement, the following
terms shall have the following meanings:
Affiliate: "Affiliate" means, with respect to any
specified person, (i) any other person directly or indirectly
controlling or controlled by, or under direct or indirect common
control with, such specified person or (ii) any officer or
director of such other person. For purposes of this definition,
the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a person
means the possession, direct or indirect, of the power (whether
or not exercised) to direct or cause the direction of the
management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.
Business Day: Each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which banking
institutions in The City of New York are authorized or obligated
by law or executive order to close.
Common Stock: The shares of common stock, $.01 par
value per share, of the Company and any other shares of common
stock as may constitute "Common Stock" for purposes of the
Indenture, in each case, as issuable or issued upon conversion of
the Notes.
Damages Accrual Period: See Section 2(e) hereof.
Damages Payment Date: Each of the semi-annual interest
payment dates provided in the Indenture.
Deferral Period: See Section 2(d) hereof.
Effectiveness Period: The period commencing with the
date hereof and ending on the date that all Registrable
Securities have ceased to be Registrable Securities.
Event: See Section 2(e) hereof.
Event Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
Filing Date: See Section 2(a) hereof.
Holder: See the second paragraph of this Agreement.
Indenture: The Indenture, dated as of July 8, 1996,
between the Company and Norwest Bank Minnesota, National
Association, as Trustee, pursuant to which the Notes are being
issued, as amended or supplemented from time to time in
accordance with the terms hereof.
Initial Purchaser: Morgan Stanley & Co. Incorporated.
Initial Shelf Registration: See Section 2(a) hereof.
Liquidated Damages: See Section 2(e) hereof.
Losses: See Section 6 hereof.
Managing Underwriters: The investment banking firm or
firms that shall manage or co-manage an Underwritten Offering.
Notes: The 7% Convertible Subordinated Notes due 2003
of the Company being issued and sold pursuant to the Placement
Agreement and the Indenture.
Notice Holder: See Section 2(d)(i) hereof.
Placement Agreement: See the first paragraph of this
Agreement.
Prospectus: The prospectus included in any
Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement
in reliance upon Rule 430A promulgated under the Securities Act),
as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
Record Holder: (i) with respect to any Damages Payment
Date relating to any Note as to which any such Liquidated Damages
have accrued, the registered holder of such Note on the record
date with respect to the interest payment date under the
Indenture on which such Damages Payment Date shall occur and (ii)
with respect to any Damages Payment Date relating to any Common
Stock as to which any such Liquidated Damages have accrued, the
registered holder of such Common Stock 15 days prior to the next
succeeding Damages Payment Date.
Registrable Securities: (A) The Common Stock of the
Company into which the Notes are convertible or converted,
whether or not such Notes have been converted, and at all times
subsequent thereto, and any Common Stock issued with respect
thereto upon any stock dividend, split or similar event until, in
the case of any such Common Stock, (i) it is effectively
registered under the Securities Act and disposed of in accordance
with the Registration Statement covering it, (ii) it is saleable
by the holder thereof pursuant to Rule 144(k) or (iii) it is sold
to the public pursuant to Rule 144, and, as a result of the event
or circumstance described in any of the foregoing clauses (i)
through (iii), the legends with respect to transfer restrictions
required under the Indenture (other than any such legends
required solely as the consequence of the fact that such Common
Stock (or the Notes, upon the conversion of which, such Common
Stock was issued or is issuable) is owned by, or was previously
owned by, the Company or an Affiliate of the Company) are removed
or removable in accordance with the terms of the Indenture; (B)
the Notes, until, in the case of any such Note, (i) it is
converted into shares of Common Stock in accordance with the
terms of the Indenture, (ii) it is effectively registered under
the Securities Act and disposed of in accordance with the
Registration Statement covering it, (iii) it is saleable by the
holder thereof pursuant to Rule 144(k) or (iv) it is sold to the
public pursuant to Rule 144, and, as a result of the event or
circumstance described in any of the foregoing clauses (ii)
through (iv), the legends with respect to transfer restrictions
required under the Indenture (other than any such legends
required solely as the consequence of the fact that such Note is
owned by, or was previously owned by, the Company or an Affiliate
of the Company) are removed or removable in accordance with the
terms of the Indenture.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of
the Company which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Rule 144: Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as
amended, and the rules and regulations promulgated by the SEC
thereunder.
Selling Period: See Section 2(d)(i) hereof.
Shelf Registration: See Section 2(a) hereof.
Special Counsel: Davis Polk & Wardwell or such
successor counsel as shall be specified by the Holders of a
majority of the Registrable Securities, the fees and expenses of
which will be paid by the Company pursuant to Section 5 hereof.
Subsequent Shelf Registration: See Section 2(b)
hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Trustee under the Indenture.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
2. Shelf Registration.
(a) Shelf Registration. The Company shall prepare and
file with the SEC, as soon as practicable but in any event on or
prior to the date ninety (90) days following the latest date of
original issuance of the Notes (the "Filing Date"), a
Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration") registering the resale from time to time by
Holders thereof of all of the Registrable Securities (the
"Initial Shelf Registration"). The Initial Shelf Registration
shall be on Form S-3 or another appropriate form permitting
registration of such Registrable Securities for resale by the
Holders in the manner or manners designated by them (including,
without limitation, one or more Underwritten Offerings). The
Company shall use its reasonable efforts to cause the Initial
Shelf Registration to be declared effective under the Securities
Act as soon as practicable and to keep the Initial Shelf
Registration continuously effective under the Securities Act
until the earlier of the expiration of the Effectiveness Period
or the date a Subsequent Shelf Registration, as defined below,
covering all of the Registrable Securities has been declared
effective under the Securities Act.
(b) If the Initial Shelf Registration or any
Subsequent Shelf Registration, as defined below, ceases to be
effective for any reason as a result of the issuance of a stop
order by the SEC at any time during the Effectiveness Period, the
Company shall use its reasonable efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and
in any event shall within thirty (30) days of such cessation of
effectiveness amend the Shelf Registration in a manner reasonably
expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration
covering all of the Registrable Securities (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the
Company shall use its reasonable efforts to cause the Subsequent
Shelf Registration to be declared effective as soon as
practicable after such filing and to keep such Registration
Statement continuously effective until the end of the
Effectiveness Period.
(c) The Company shall supplement and amend the Shelf
Registration if required by the rules, regulations or
instructions applicable to the registration form used by the
Company for such Shelf Registration, if required by the
Securities Act, or if reasonably requested by the Initial
Purchaser or by the Trustee on behalf of a majority of the
Holders of the Registrable Securities covered by such
Registration Statement or by any Managing Underwriter of such
Registrable Securities in the event of an Underwritten Offering
of the Registrable Securities.
(d) Each Holder of Registrable Securities agrees that
if such Holder wishes to sell its Registrable Securities pursuant
to a Shelf Registration and related Prospectus, it will do so
only in accordance with this Section 2(d). Each Holder of
Registrable Securities agrees to give written notice to the
Company at least three Business Days prior to any intended
distribution of Registrable Securities under the Shelf
Registration, which notice shall specify the date on which such
Holder intends to begin such distribution and any information
with respect to such Holder and the intended distribution of
Registrable Securities by such Holder as may be required to amend
the Registration Statement or supplement the related Prospectus
with respect to such intended distribution of Registrable
Securities by such Holder (the "Requisite Information"). In the
event the Holder fails to provide the Requisite Information in
its initial notice of its intention to distribute the Registrable
Securities pursuant to the Registration Statement, the Company
will promptly request such Holder to provide such Requisite
Information. As soon as practicable after the date such notice
is provided, and in any event within two Business Days after such
date, the Company shall either:
(i) (A) If necessary, prepare and file with the
Commission a posteffective amendment to the Shelf Registration or
a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or
file any other required document so that such Registration
Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and so
that, as thereafter delivered to purchasers of the Registrable
Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading; (B) provide each Notice Holder
(as defined below) copies of any documents filed pursuant to
Section 2(d)(i)(A); and (C) inform each Notice Holder that the
Company has complied with its obligations in Section 2(d)(i)(A)
(or that, if the Company has filed a post-effective amendment to
the Shelf Registration which has not yet been declared effective,
the Company will notify the Notice Holder to that effect, will
use its reasonable efforts to secure the effectiveness of such
post-effective amendment and will immediately notify the Notice
Holder when the amendment has become effective); each Holder who
has given notice of intention to distribute such Holder's
Registrable Securities in accordance with Section 2(d) hereof (a
"Notice Holder") will sell all or any of such Registrable
Securities pursuant to the Shelf Registration and related
Prospectus only during the 45-day period commencing with the date
on which the Company gives notice, pursuant to Section
2(d)(i)(C), that the Registration Statement and Prospectus may be
used for such purpose (such 45-day period is referred to as a
"Selling Period"). The Notice Holders will not sell any
Registrable Securities pursuant to such Registration Statement or
Prospectus after such Selling Period without giving a new notice
of intention to sell pursuant to Section 2(d) hereof and
receiving a further notice from the Company pursuant to Section
2(d)(i)(C) hereof.
(ii) in the event (A) of the happening of any
event of the kind described in Section 3(c)(ii), 3(c)(iii),
3(c)(iv), 3(c)(v), or 3(c)(vi) hereof or (B) that, in the
judgment of the Company, it is advisable to suspend use of the
Prospectus for a discrete period of time due to pending material
corporate developments or similar material events that have not
yet been publicly disclosed and as to which the Company believes
public disclosure will be prejudicial to the Company, the Company
shall deliver a certificate in writing, signed by an authorized
executive officer of the Company, to the Notice Holders, the
Special Counsel and the Managing Underwriters, if any, to the
effect of the foregoing and, upon receipt of such certificate,
each such Notice Holder's Selling Period will not commence until
such Notice Holder's receipt of copies of the supplemented or
amended Prospectus provided for in Section 2(d)(i)(A) hereof, or
until it is advised in writing by the Company that the Prospectus
may be used and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus. The Company will use its
reasonable efforts to ensure that the use of the Prospectus may
be resumed, and the Selling Period will commence, as soon as
practicable and, in the case of a pending development or event
referred to in Section 2(d)(ii)(B) hereof, as soon as the earlier
of (x) public disclosure of such pending material corporate
development or similar material event or (y) in the judgment of
the Company, public disclosure of such material corporate
development or similar material event would not be prejudicial to
the Company. Notwithstanding the foregoing, the Company shall
not under any circumstances be entitled to exercise its right
under this Section 2(d)(ii) to defer the commencement of a
Selling Period except as follows: the Company may defer the
commencement of a Selling Period in accordance with this Section
2(d)(ii) for a period not to exceed 30 days in any three-month
period, or not to exceed an aggregate of 60 days in any 12-month
period, and the period in which a Selling Period is suspended
shall not exceed fifteen (15) days unless the Company shall
deliver to such Notice Holders a second notice to the effect set
forth above, which shall have the effect of extending the period
during which such Selling Period is deferred by up to an
additional fifteen (15) days, or such shorter period of time as
is specified in such second notice. In no event shall the
Company be permitted to extend the period during which such
Selling Period is deferred (a "Deferral Period") beyond such
thirty (30) day period from and after the date a Notice Holder
provides notice to the Company in accordance with this Section
2(d) of its intention to distribute Registrable Securities.
(e) The parties hereto agree that the Holders of
Registrable Securities will suffer damages, and that it would not
be feasible to ascertain the extent of such damages with
precision, if (i) the Initial Shelf Registration has not been
filed on or prior to the Filing Date, (ii) prior to the end of
the Effectiveness Period, the SEC shall have issued a stop order
suspending the effectiveness of the Shelf Registration or
proceedings have been initiated with respect to the Shelf
Registration under Section 8(d) or 8(e) of the Securities Act,
(iii) the aggregate number of days in any one Deferral Period
exceeds the periods permitted pursuant to Section 2(d)(ii) hereof
or (iv) the number of Deferral Periods exceeds the number
permitted pursuant to Section 2(d)(ii) hereof (each of the events
of a type described in any of the foregoing clauses (i) through
(iv) are individually referred to herein as an "Event," and the
Filing Date in the case of clause (i), the date on which the
effectiveness of the Shelf Registration has been suspended or
proceedings with respect to the Shelf Registration under Section
8(d) or 8(e) of the Securities Act have been commenced in the
case of clause (ii), the date on which the duration of a Deferral
Period exceeds the periods permitted by Section 2(d)(ii) hereof
in the case of clause (iii), and the date of the commencement of
a Deferral Period that causes the limit on the number of Deferral
Periods under Section 2(d)(ii) hereof to be exceeded in the case
of clause (iv), being referred to herein as an "Event Date").
Events shall be deemed to continue until the date of the
termination of such Event, which shall be the following dates
with respect to the respective types of Events: the date the
Initial Registration Statement is filed in the case of an Event
of the type described in clause (i), the date that all stop
orders suspending effectiveness of the Shelf Registration have
been removed and the proceedings initiated with respect to the
Shelf Registration under Section 8(d) or 8(e) of the Securities
Act have terminated, as the case may be, in the case of Events of
the types described in clause (ii), termination of the Deferral
Period which caused the aggregate number of days in any one
Deferral Period to exceed the number permitted by Section
2(d)(ii) to be exceeded in the case of Events of the type
described in clause (iii), and termination of the Deferral Period
the commencement of which caused the number of Deferral Periods
permitted by Section 2(d)(ii) to be exceeded in the case of
Events of the type described in clause (iv).
Accordingly, upon the occurrence of any Event and until such
time as there are no Events which have occurred and are
continuing (a "Damages Accrual Period"), commencing on the Event
Date on which such Damages Accrual Period began, the Company
agrees to pay, as liquidated damages, and not as a penalty, an
additional amount (the "Liquidated Damages"): (A)(i) to each
holder of a Note that is a Notice Holder, accruing at a rate
equal to one-half of one percent per annum (50 basis points) on
the aggregate principal amount of Notes held by such Notice
Holder and (ii) to each holder of Common Stock that is a Notice
Holder, accruing at a rate equal to one-half of one percent per
annum (50 basis points) calculated on an amount equal to the
product of (x) the then-applicable Conversion Price (as defined
in the Indenture), times (y) the number of shares of Common Stock
held by such holder; and (B) if the Damages Accrual Period
continues for a period in excess of thirty (30) days from the
Event Date, from and after the end of such thirty (30) days until
such time as there are no Events which have occurred and are
continuing, (i) to each holder of a Note (whether or not a Notice
Holder), accruing at a rate equal to one-half of one percent per
annum (50 basis points) on the aggregate principal amount of
Notes held by such holder and (ii) to each holder of Common Stock
(whether or not a Notice Holder), accruing at a rate equal to
one-half of one percent per annum (50 basis points) calculated on
an amount equal to the product of (x) the then applicable
Conversion Price (as defined in the Indenture), times (y) the
number of shares of Common Stock held by such holder.
Notwithstanding the foregoing, no Liquidated Damages shall accrue
under clause (A) for the preceding sentence during any period for
which Liquidated Damages accrue under clause (B) of the preceding
sentence or as to any Registrable Securities from and after the
expiration of the Effectiveness Period. The rate of accrual of
the Liquidated Damages with respect to any period shall not
exceed the rate provided for in this paragraph notwithstanding
the occurrence of multiple concurrent Events.
The Company shall pay the Liquidated Damages due on any
Notes or Common Stock by depositing with the Trustee under the
Indenture, in trust, for the benefit of the holders of Notes or
Common Stock or Notice Holders, as the case may be, entitled
thereto, at least one Business Day prior to the applicable
Damages Payment Date, sums sufficient to pay the Liquidated
Damages accrued or accruing since the last preceding Damages
Payment Date through such Damages Payment Date. The Liquidated
Damages shall be paid by the Company to the Record Holders on
each Damages Payment Date by wire transfer of immediately avail
able funds to the accounts specified by them or by mailing checks
to their registered addresses as they appear in the Note register
(as defined in the Indenture), in the case of the Notes, and in
the register of the Company for the Common Stock, in the case of
the Common Stock, if no such accounts have been specified on or
before the Damage Payment Date; provided, however, that any
Liquidated Damages accrued with respect to any Note or portion
thereof called for redemption on a redemption date, redeemed or
repurchased in connection with a Fundamental Change (as defined
in the Indenture) on a repurchase date, or converted into Common
Stock on a conversion date prior to the Damages Payment Date,
shall, in any such event, be paid instead to the holder who
submitted such Note or portion thereof for redemption, repurchase
or conversion on the applicable redemption date, repurchase date
or conversion date, as the case may be, on such date (or promptly
following the conversion date, in the case of conversion of a
Note). The Trustee shall be entitled, on behalf of the holders
of Notes, holders of Common Stock and Notice Holders, to seek any
available remedy for the enforcement of this Agreement, including
for the payment of such Liquidated Damages. Notwithstanding the
foregoing, the parties agree that the sole damages payable for a
violation of the terms of this Agreement with respect to which
Liquidated Damages are expressly provided shall be such
Liquidated Damages. Nothing shall preclude a Notice Holder or
Holder of Registrable Securities from pursuing or obtaining
specific performance or other equitable relief with respect to
this Agreement, in addition to the payment of Liquidated Damages.
All of the Company's obligations set forth in this Section
2(e) which are outstanding with respect to any Registrable
Securities at the time such security ceases to be a Registrable
Security shall survive until such time as all such obligations
with respect to such security have been satisfied in full
(notwithstanding termination of the Agreement pursuant to Section
8(o)).
The parties hereto agree that the Liquidated Damages
provided for in this Section 2(e) constitute a reasonable
estimate of the damages that may be incurred by Holders of
Registrable Securities (other than the Initial Purchaser) by
reason of the failure of the Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical
matter) for effecting resales of Registrable Securities, as the
case may be, in accordance with the provisions hereof.
3. Registration Procedures. In connection with the
Company's registration obligations under Section 2 hereof, the
Company shall effect such registrations to permit the sale of the
Registrable Securities in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company
shall as expeditiously as possible:
(a) Prepare and file with the SEC a Registration
Statement or Registration Statements on any appropriate form
under the Securities Act available for the sale of the
Registrable Securities by the Holders thereof in accordance with
the intended method or methods of distribution thereof, and use
its reasonable efforts to cause each such Registration Statement
to become effective and remain effective as provided herein;
provided, that before filing any such Registration Statement or
Prospectus or any amendments or supplements thereto (other than
documents that would be incorporated or deemed to be incorporated
therein by reference and that the Company is required by
applicable securities laws or stock exchange requirements to
file) the Company shall furnish to the Initial Purchaser, the
Special Counsel and the Managing Underwriters of such offering,
if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of the Initial Purchaser,
the Special Counsel and such Managing Underwriters, and the
Company shall not file any such Registration Statement or
amendment thereto or any Prospectus or any supplement thereto
(other than such documents which, upon filing, would be
incorporated or deemed to be incorporated by reference therein
and that the Company is required by applicable securities laws or
stock exchange requirements to file) to which the Holders of a
majority of the Registrable Securities covered by such
Registration Statement, the Initial Purchaser or the Special
Counsel shall reasonably object in writing within two full
Business Days.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement continuously
effective for the applicable period specified in Section 2; cause
the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force)
under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such Registration Statement and Prospectus during the
applicable period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration
Statement as so amended or such Prospectus as so supplemented.
(c) Notify the Notice Holders, the Initial Purchaser,
the Special Counsel and the Managing Underwriters, if any,
promptly, and (if requested by any such person) confirm such
notice in writing, (i) when a Prospectus, any Prospectus
supplement, a Registration Statement or a post-effective
amendment to a Registration Statement has been filed with the
SEC, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective,
(ii) of any request by the SEC or any other federal or state
governmental authority for amendments or supplements to a
Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the
initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (v) of the existence of any fact or
happening of any event which makes any statement of a material
fact in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes
in the Registration Statement or Prospectus in order that, in the
case of the Registration Statement, it will not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and (vi) of the Company's determination that a
post-effective amendment to a Registration Statement would be
appropriate.
(d) Use its reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a
Registration Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the
earliest possible moment.
(e) If reasonably requested by the Initial Purchaser
or the Managing Underwriters, if any, or the Holders of a
majority of the Registrable Securities being sold, (i) promptly
incorporate in a Prospectus supplement or post-effective
amendment to a Registration Statement such information as the
Initial Purchaser, the Special Counsel, the Managing
Underwriters, if any, or such Holders, in connection with any
offering of Registrable Securities, agree should be included
therein as required by applicable law, and (ii) make all required
filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment; provided, that the
Company shall not be required to take any actions under this
Section 3(e) that are not, in the reasonable opinion of counsel
for the Company, in compliance with applicable law.
(f) Furnish to each selling Holder, the Special
Counsel and the Initial Purchaser, and each Managing Underwriter,
if any, without charge, at least one conformed copy of the
Registration Statement or Statements and any amendment thereto,
including financial statements but excluding schedules, all
documents incorporated or deemed to be incorporated therein by
reference and all exhibits (unless requested in writing by such
selling Holder, counsel, the Initial Purchaser or underwriter).
(g) Deliver to each selling Holder, the Special
Counsel and the Initial Purchaser and each Managing Underwriter,
if any, in connection with any offering of Registrable
Securities, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including
each preliminary prospectus) and any amendment or supplement
thereto as such persons may reasonably request; and the Company
hereby consents to the use of such Prospectus or each amendment
or supplement thereto by each of the selling Holders of
Registrable Securities and the underwriters, if any, in
connection with any offering and sale of the Registrable
Securities covered by such Prospectus or any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable
Securities, to register or qualify or cooperate with the selling
Holders, the Managing Underwriters, if any, and the Special
Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions within the United States as
any selling Holder or Managing Underwriter reasonably requests in
writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do
any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable
Securities covered by the applicable Registration Statement;
provided, that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it is not then
so qualified or (ii) take any action that would subject it to
general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.
(i) Cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities
within the United States, except as may be required solely as a
consequence of the nature of such selling Holder, in which case
the Company will cooperate in all reasonable respects with the
filing of such Registration Statement and the granting of such
approvals, as may be necessary to enable the selling Holder or
Holders thereof or the Managing Underwriters, if any, to
consummate the disposition of such Registrable Securities.
(j) During any Selling Period (other than during a
Deferral Period), immediately upon the existence of any fact or
the occurrence of any event as a result of which a Registration
Statement shall contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or a
Prospectus shall contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
promptly prepare and file (subject to the proviso in Section
3(a)) a post-effective amendment to each Registration Statement
or a supplement to the related Prospectus or any document
incorporated therein by reference or file any other required
document (such as a Current Report on Form 8-K) that would be
incorporated by reference into the Registration Statement so that
the Registration Statement shall not contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and so that the Prospectus will not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to a Registration
Statement, use its reasonable efforts to cause it to become
effective as soon as practicable.
(k) Enter into such agreements (including, in the
event of an Underwritten Offering, an underwriting agreement in
form, scope and substance as is customary in Underwritten
Offerings) and take all such other actions in connection
therewith (including, in the event of an Underwritten Offering,
those reasonably requested by the Managing Underwriters, if any,
or the Holders of a majority of the Registrable Securities being
sold) in order to expedite or facilitate the disposition of such
Registrable Securities and in such connection, whether or not an
underwriting agreement is entered into, and if the registration
is an underwritten registration, (i) make such representations
and warranties, subject to the Company's ability to do so, to the
Holders of such Registrable Securities and the underwriters with
respect to the business of the Company and its subsidiaries, the
Registration Statement, Prospectus and documents incorporated by
reference or deemed incorporated by reference, if any, in each
case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the
same if and when requested; (ii) use its reasonable efforts to
obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the Managing Underwriters, if any,
Special Counsel and the Holders of a majority of the Registrable
Securities being sold) addressed to each of the underwriters
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such Special Counsel and Managing
Underwriters; (iii) use its reasonable efforts to obtain "cold
comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary,
any other certified public accountants of any business acquired
or to be acquired by the Company for which financial statements
and financial data are, or are required to be, included in the
Registration Statement), addressed to each of the Managing
Underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold
comfort" letters in connection with Underwritten Offerings; and
(iv) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Registrable
Securities being sold, the Special Counsel and the Managing
Underwriters, if any, to evidence the continued validity of the
representations and warranties of the Company and its
subsidiaries made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company. The above shall be done at each closing under such
underwriting or similar agreement as and to the extent required
thereunder.
(l) If requested in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make
available for inspection by a representative of the Holders of
Registrable Securities being sold, any Managing Underwriter
participating in any disposition of Registrable Securities, if
any, and any attorney or accountant retained by such selling
Holders or underwriter, financial and other records, pertinent
corporate documents and properties of the Company and its
subsidiaries, and cause the executive officers, directors and
employees of the Company and its subsidiaries to supply all
information reasonably requested by any such representative,
Managing Underwriter, attorney or accountant in connection with
such disposition; subject to reasonable assurances by each such
person that such information will only be used in connection with
matters relating to such Registration Statement; provided,
however, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential at the time
of delivery of such information shall be kept confidential by
such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure
of such information is required by law (including any disclosure
requirements pursuant to Federal securities laws in connection
with the filing of any Registration Statement or the use of any
prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result
of a disclosure or failure to safeguard by any such person or
(iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a
confidentiality agreement.
(m) Comply with all applicable rules and regulations
of the SEC and make generally available to its securityholders
earning statements (which need not be audited) satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities
Act) no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter
in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if
not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company commencing
after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
(n) Cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and enable such Registrable
Securities to be in such denominations and registered in such
names as such Holders may request.
(o) Provide the Trustee under the Indenture and the
transfer agent for the Common Stock with printed certificates for
the Registrable Securities which are in a form eligible for
deposit with The Depository Trust Company.
(p) Cause the Common Stock covered by the Registration
Statement to be listed on each securities exchange or quoted on
each automated quotation system on which any of the Company's
"Common Stock," as that term is defined in the Indenture, is then
listed or quoted) no later than the date the Registration
Statement is declared effective and, in connection therewith, to
the extent applicable, to make such filings under the Exchange
Act (e.g., the filing of a Registration Statement on Form 8-A)
and to have such filings declared effective thereunder.
(q) Cooperate and assist in any filings required to be
made with the National Association of Securities Dealers, Inc.
4. Holder's Obligations. Each Holder agrees, by
acquisition of the Notes and Registrable Securities, that no
Holder of Registrable Securities shall be entitled to sell any of
such Registrable Securities pursuant to a Registration Statement
or to receive a Prospectus relating thereto, unless such Holder
has furnished the Company with the notice required pursuant to
Section 2(d) hereof and such other information regarding such
Holder and the distribution of such Registrable Securities as may
be required to be included in the Registration Statement or the
Prospectus or as the Company may from time to time reasonably
request. The Company may exclude from such registration the
Registrable Securities of any Holder who does not furnish such
information provided above for so long as such information is not
so furnished. Each Holder of Registrable Securities as to which
any Registration Statement is being effected agrees promptly to
furnish to the Company all information required to be disclosed
in order to make the information previously furnished to the
Company by such Holder not misleading. Any sale of any
Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection
with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact
relating to such Holder or its plan of distribution and that such
Prospectus does not as of the time of such sale omit to state any
material fact relating to such Holder or its plan of distribution
necessary to make the statements in such Prospectus, in light of
the circumstances under which they were made, not misleading.
5. Registration Expenses. All fees and expenses incident
to the Company's performance of or compliance with this Agreement
shall be borne by the Company whether or not any of the
Registration Statements become effective. Such fees and expenses
shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (x)
with respect to filings required to be made with the SEC or the
National Association of Securities Dealers, Inc. and (y) relating
to compliance with federal securities or Blue Sky laws
(including, without limitation, fees and disbursements of Special
Counsel in connection with Blue Sky qualifications of the
Registrable Securities under the laws of such jurisdictions as
the Managing Underwriters, if any, or Holders of a majority of
the Registrable Securities being sold may designate)), (ii)
printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form
eligible for deposit with The Depository Trust Company and of
printing prospectuses if the printing of prospectuses is
requested by the Special Counsel or the Holders of a majority of
the Registrable Securities included in any Registration
Statement), (iii) the reasonable fees and disbursements of the
Trustee and its counsel and of the registrar and transfer agent
for the Common Stock, (iv) messenger, telephone and delivery
expenses relating to the performance of the Company's obligations
hereunder, (v) reasonable fees and disbursements of counsel for
the Company and the Special Counsel in connection with the Shelf
Registration (provided that the Company shall not be liable for
the fees and expenses of more than one separate firm, in addition
to counsel for the Company, for all parties participating in any
transaction hereunder), (vi) fees and disbursements of all
independent certified public accountants referred to in Section
3(k)(iii) hereof (including the expenses of any special audit and
"cold comfort" letters required by or incident to such
performance) and (vii) Securities Act liability insurance, to the
extent obtained by the Company in its sole discretion. In
addition, the Company shall pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of
any annual audit, the fees and expenses incurred in connection
with the listing of the securities to be registered on any
securities exchange on which similar securities issued by the
Company are then listed and the fees and expenses of any person,
including special experts, retained by the Company.
Notwithstanding the provisions of this Section 5, each seller of
Registrable Securities shall pay all selling expenses and all
registration expenses to the extent that the Company is
prohibited by applicable Blue Sky laws from paying for or on
behalf of such seller of Registrable Securities.
6. Indemnification.
(a) Indemnification by the Company. The Company shall
indemnify and hold harmless the Initial Purchaser, each Holder
and each person, if any, who controls the Initial Purchaser or
any Holder (within the meaning of either Section 15 of the
Securities Act or Section 20(a) of the Exchange Act) from and
against all losses, liabilities, damages and expenses (including,
without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such
action or claim) (collectively, "Losses"), arising out of or
based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or
Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such Losses arise out
of or are based upon the information relating to the Initial
Purchaser or any Holder furnished to the Company in writing by
the Initial Purchaser or such Holder expressly for use therein;
provided, that the Company shall not be liable to any Holder of
Registrable Securities (or any person controlling such Holder) to
the extent that any such Losses arise out of or are based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if either
(A)(i) such Holder failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation
of the sale by such Holder to the person asserting the claims
from which such Losses arise and (ii) the Prospectus would have
corrected such untrue statement or alleged untrue statement or
such omission or alleged omission, or (B)(x) such untrue
statement or alleged untrue statement, omission or alleged
omission is corrected in an amendment or supplement to the
Prospectus and (y) having previously been furnished by or on
behalf of the Company with copies of the Prospectus as so amended
or supplemented, such Holder thereafter fails to deliver such
Prospectus as so amended or supplemented, with or prior to the
delivery of written confirmation of the sale of a Registrable
Security to the person asserting the claim from which such Losses
arise. The Company shall also indemnify each underwriter and
each person who controls such person (within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) to the same extent and with the same limitations as provided
above with respect to the indemnification of the Initial
Purchaser or the Holders of Registrable Securities.
(b) Indemnification by Holder of Registrable
Securities. Each Holder agrees, and such agreement shall be
evidenced by the Holder delivering the notice described in
Section 2(d) hereof, severally and not jointly to indemnify and
hold harmless the Initial Purchaser, the other selling Holders,
the Company, its directors, its officers who sign a Registration
Statement, and each person, if any, who controls the Company, the
Initial Purchaser and any other selling Holder (within the
meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act), from and against all losses arising out of
or based upon any untrue statement of a material fact contained
in any Registration Statement, Prospectus or preliminary
prospectus or arising out of or based upon any omission of a
material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only to
the extent, that such untrue statement or omission is contained
in any information relating to such Holder so furnished in
writing by such Holder to the Company expressly for use in such
Registration Statement or Prospectus. In no event shall the
liability of any selling Holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the
proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case
any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity
may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more
than one separate firm (in addition to any local counsel) for the
Initial Purchaser and all persons, if any, who control the
Initial Purchaser within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (b) the fees
and expenses of more than one separate firm (in addition to any
local counsel) for all Holders and all persons, if any, who
control any Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and (c) the
fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company, its directors, its officers
who sign a Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section,
and that all such fees and expenses shall be reimbursed as they
are incurred. In the case of any such separate firm for the
Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company.
In such case involving the Initial Purchaser and persons who
control the Initial Purchaser, such firm shall be designated in
writing by Morgan Stanley & Co. Incorporated. In such case
involving the Holders and such persons who control Holders, such
firm shall be designated in writing by the Holders of the
majority of Registrable Securities sold pursuant to the
Registration Statement. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be
a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel
as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party, shall not have reimbursed the
indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability or claims that are
the subject matter of such proceeding.
(d) Contribution. If the indemnification provided for
in this Section 6 is unavailable to an indemnified party under
Section 6(a) or 6(b) hereof in respect of any Losses or is
insufficient to hold such indemnified party harmless, then each
applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable
by such indemnified party as a result of such Losses, (i) in such
proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and
the indemnified party or parties on the other hand or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above
but also the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed
to be equal to the total net proceeds from the initial placement
(before deducting expenses) of the Notes pursuant to the
Placement Agreement. Benefits received by the Initial Purchaser
shall be deemed to be equal to the total purchase discounts and
commissions received by it pursuant to the Placement Agreement
and benefits received by any other Holders shall be deemed to be
equal to the value of receiving Notes registered under the
Securities Act. Benefits received by any underwriter shall be
deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus
forming a part of the Registration Statement which resulted in
such Losses. The relative fault of the Holders on the one hand
and the Company on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Holders or by the Company and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this paragraph
are several in proportion to the respective number of Registrable
Securities they have sold pursuant to a Registration Statement,
and not joint.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation or by any other method or
allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as
a result of the Losses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding this Section
6(d), an indemnifying party that is a selling Holder of
Registrable Securities shall not be required to contribute any
amount in excess of the amount by which the total price at which
the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the
amount of any damages which such indemnifying party has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement
obligations of the Company hereunder shall be in addition to any
liability the Company may otherwise have hereunder, under the
Placement Agreement or otherwise. The provisions of this Section
6 shall survive so long as Registrable Securities remain
outstanding, notwithstanding any transfer of the Registrable
Securities by any Holder or any termination of this Agreement.
The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Initial Purchaser, any
Holder or any person controlling any Holder, or the Company, its
officers or directors or any person controlling the Company and
(iii) the sale of any Registrable Securities by any Holder.
7. Information Requirements.
(a) The Company shall file the reports required to be
filed by it under the Securities Act and the Exchange Act, and if
at any time the Company is not required to file such reports, it
will, upon the request of any Holder of Registrable Securities,
make publicly available other information so long as necessary to
permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will
cooperate with any Holder of Registrable Securities and take such
further reasonable action as any Holder of Registrable Securities
may reasonably request (including, without limitation making such
reasonable representations as any such Holder may reasonably
request), all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions
provided by Rule 144 and Rule 144A under the Securities Act.
Upon the request of any Holder of Registrable Securities, the
Company shall deliver to such Holder a written statement as to
whether it has complied with such filing requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities
under any section of the Exchange Act.
(b) The Company shall file the reports required to be
filed by it under the Exchange Act and shall comply with all
other requirements set forth in the instructions to Form S-3 in
order to allow the Company to be eligible to file registration
statements on Form S-3.
8. Miscellaneous.
(a) Remedies. In the event of a breach by the Company
of its obligations under this Agreement, each Holder of
Registrable Securities, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this
Agreement; provided that the sole damages payable for a violation
of the terms of this Agreement for which Liquidated Damages are
expressly provided pursuant to Section 2(e) hereof shall be such
Liquidated Damages. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by
reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it
shall waive the defense that a remedy at law would be adequate.
(b) No Conflicting Agreements. The Company has not,
as of the date hereof and shall not, on or after the date of this
Agreement, enter into any agreement with respect to its
securities which conflicts with the rights granted to the Holders
of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with
the rights granted to the holders of the Company's securities
under any other agreements.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless
the Company has obtained the written consent of Holders of a
majority of the then outstanding Common Stock constituting
Registrable Securities (with Holders of Notes deemed to be the
Holders, for purposes of this Section, of the number of
outstanding shares of Common Stock into which such Notes are
convertible). Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being sold pursuant
to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders; provided, that
the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the
immediately preceding sentence.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing and
shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier or (iii) one
business day after being deposited with a reputable next-day
courier, postage prepaid, to the parties as follows:
(x) if to a Holder of Registrable Securities, at
the most current address given by such Holder to the Company
in accordance with the provisions of Section 8(e);
(y) if to the Company, to:
MedImmune, Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
Attention: David M. Mott
Telecopy No.: (301) 527-4201
(Confidential)
with a copy to:
Dewey Ballantine
1301 Avenue of the Americas
23rd Floor
New York, New York 10019
Attention: Frederick W. Kanner
Telecopy No.: (212) 259-6333
and
(z) if to the Special Counsel to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10016
Attention: Keith L. Kearney
Telecopy No: (212) 450-4800
or to such other address as such person may have furnished to the
other persons identified in this Section 8(d) in writing in
accordance herewith.
(e) Owner of Registrable Securities. The Company will
maintain, or will cause its registrar and transfer agent to
maintain, a register with respect to the Registrable Securities
in which all transfers of Registrable Securities of which the
Company has received notice will be recorded. The Company may
deem and treat the person in whose name Registrable Securities
are registered in such register of the Company as the owner
thereof for all purposes, including without limitation, the
giving of notices under this Agreement.
(f) Approval of Holders. Whenever the consent or
approval of Holders of a specified percentage of Registrable
Securities is required hereunder, (i) Holders of Notes shall be
deemed to be Holders, for such purposes, of the number of
outstanding shares of Common Stock into which such Notes are
convertible and (ii) Registrable Securities held by the Company
or its affiliates (as such term is defined in Rule 405 under the
Securities Act) (other than the Initial Purchaser or subsequent
Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holdings
of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the
Holders of such required percentage.
(g) Successors and Assigns. Any person who purchases
any Registrable Securities from an Initial Purchaser shall be
deemed, for purposes of this Agreement, to be an assignee of such
Initial Purchaser. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the
parties and shall inure to the benefit of and be binding upon
each Holder of any Registrable Securities.
(h) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be original and all of which taken together shall constitute one
and the same agreement.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
(k) Severability. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their best
efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by
such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such which
may be hereafter declared invalid, illegal, void or
unenforceable.
(l) Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement and is
intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable
Securities. Except as provided in the Placement Agreement, there
are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein, with respect to the
registration rights granted by the Company with respect to the
Registrable Securities. This Agreement supersedes all prior
agreements and understandings among the parties with respect to
such registration rights.
(m) Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement, or where any
provision hereof is validly asserted as a defense, the prevailing
party, as determined by the court, shall be entitled to recover
reasonable attorneys' fees in addition to any other available
remedy.
(n) Further Assurances. Each of the parties hereto
shall use all reasonable efforts to take, or cause to be taken,
all appropriate action, do or cause to be done all things
reasonably necessary, proper or advisable under applicable law,
and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the
other documents contemplated hereby and consummate and make
effective the transactions contemplated hereby.
(o) Termination. This Agreement and the obligations
of the parties hereunder shall terminate upon the end of the
Effectiveness Period, except for any liabilities or obligations
under Sections 4, 5 or 6 hereof and the obligations to make
payments of and provide for Liquidated Damages under Section 2(e)
hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in
accordance with their terms.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
MEDIMMUNE, INC.
By: /s/David M. Mott
Name: David M. Mott
Title: President and
Chief Operating Officer
Accepted as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
By: /s/Candice Keoderitz
Name: Candice Koederitz
Title: Managing Director
EXHIBIT 5.1
Opinion of Dewey Ballantine
October 3, 1996
MedImmune, Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
Gentlemen:
We have acted as counsel to MedImmune, Inc., a Delaware corporation (the
"Company"), in connection with the preparation and filing by the Company of
a Registration Statement on Form S-3 (the "Registration Statement") under
the Securities Act of 1933, as amended (the "Act"), for the registration of
(i) $60,000,000 aggregate principal amount of the Company's 7% Convertible
Subordinated Notes due 2003 (the "Notes") and (ii) 3,048,780 shares of
common stock, $.01 par value per share (the "Common Stock"), of the Company
which may be issued upon the conversion thereof, plus such additional
indeterminate number of shares of Common Stock as may become issuable upon
conversion of the Notes as a result of adjustments to the conversion price.
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents, corporate
records, certificates of public officials and officers of the Company and
such other instruments as we have deemed necessary or appropriate as a basis
for the opinions expressed below, including the Registration Statement, the
Indenture under which the Notes were issued, the Restated Articles of
Incorporation of the Company and the By-laws of the Company.
Based on the foregoing, we are of the opinion that:
1. The Notes are valid, legal and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting creditors' rights generally and by general
principles of equity, regardless of whether considered in equity or at law;
and
2. The Common Stock issuable upon conversion of the Notes has been
validly authorized and reserved for issuance and, when duly issued and
delivered upon conversion of the Notes in accordance with the terms of the
Notes, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving such consent, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
DEWEY BALLANTINE
EXHIBIT 12.1
MedImmune, Inc.
Calculation of Ratio of Earnings to Fixed Charges
(Dollar amounts in 000s)
<TABLE>
<CAPTION>
Six months
Year Ended ended June 30
-------------------------------------------- ------------------
<S> <C>> <C> <C> <C> <C> <C> <C>
1991 1992 1993 1994 1995 1995 1996
--------------------------------------------- ------------------
Pretax income: $1,661 $(8,468) $(13,217) $(18,828) $(22,671) $(10,335) $(8,608)
Add:
Interest expense 85 287 265 256 338 63 59
charged to operations
Portion of net 78 228 304 341 362 143 178
rental expense
representative of
interest factor
(assumed to be one-
third)
------ -------- -------- -------- -------- -------- --------
Total earnings, $1,824 $(7,953) $(12,648) $(18,231) $(21,971) $(10,129) $(8,371)
as adjusted
Fixed Charges
Interest expense 85 287 265 256 338 63 59
charged to operations
Portion of net 78 228 304 341 362 143 178
rental expense
representative of
interest factor
(assumed to be one-
third)
------ -------- -------- -------- -------- -------- --------
Total fixed charges 163 515 569 597 700 206 237
Ratio of earnings 11.20 * * * * * *
to fix charges
*Earnings before fixed charges for the years ended December 31, 1992, 1993, 1994, 1995
and for the six months ended June 30, 1995 and 1996 are inadequate to cover fixed
charges by $7,953, $12,648, $18,231, $21,971, $10,129, and $8,371, respectively.
</TABLE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement of MedImmune, Inc. on Form S-3 of our report dated
February 6, 1996 on our audits of the financial statements of
MedImmune, Inc., as of December 31, 1995 and 1994, and for each
of the three years in the period ended December 31, 1995, which
report is included in the MedImmune, Inc. 1995 Annual Report to
Shareholders, and to our report dated February 6, 1996 on the
financial statement schedule of MedImmune, Inc. which report is
included in the MedImmune, Inc. 1995 Annual Report on Form 10-K.
We also consent to the reference to our firm under the caption
"Experts."
Coopers & Lybrand L. L. P.
Rockville, Maryland
October 3, 1996
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_____________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
_____________________________
___CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b) (2)
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A National Banking Association 41-1592157
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national Identification No.)
bank)
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
(Address of principal executive offices) (Zip code)
_____________________________
Medimmune, Inc.
(Exact name of obligor as specified in its charter)
Delaware 54-1555759
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
35 West Watkins Mill Road
Gaithersburg, MD 20878
(Address of principal executive offices) (Zip code)
_____________________________
7% Convertible Subordinated Notes due 2003
(Title of the indenture securities)
Item 1. General Information. Furnish the following information
as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of the Currency
Treasury Department
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
The Board of Governors of the Federal Reserve
System
Washington, D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise
corporate trust powers.
Item 2. Affiliations with Obligor. If the obligor is an
affiliate of the trustee, describe each such
affiliation.
None with respect to the trustee.
No responses are included for Items 3-15 of this Form T-1 because
the obligor is not in default as provided under Item 13.
Item 16. List of Exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
Norwest Bank incorporates by reference into
this Form T-1 the exhibits attached hereto.
Exhibit 1. a. A copy of Articles of Association
of the trustee now in effect. *
Exhibit 2. a. A copy of the certificate of
authority of the trustee to commence
business issued June 28, 1872, by the
Comptroller of the Currency to The
Northwestern National Bank of
Minneapolis.*
b. A copy of the certificate of the
Comptroller of the Currency dated
January 2, 1934, approving the
consolidation of the Northwestern
National Bank of Minneapolis and the
Minnesota Loan and Trust Company of
Minneapolis.*
c. A copy of the certificate of the
Acting Comptroller of the Currency dated
January 12, 1943, as to change of
corporate title of Northwestern National
Bank and Trust Company of Minneapolis to
Northwestern National Bank of
Minneapolis.*
d. A copy of the certificate of the
Comptroller of the Currency dated
May 1, 1983, authorizing Norwest Bank
Minneapolis, National Association, to
act as fiduciary.*
Exhibit 3. A copy of the authorization of the
trustee to exercise corporate trust
powers issued January 2, 1934, by the
Federal Reserve Board.*
Exhibit 4. Copy of By-laws of the trustee as now in
effect.*
Exhibit 5. Not applicable.
Exhibit 6. The consent of the trustee required by
Section 321(b) of the Act.
Exhibit 7. A copy of the latest report of condition
of the trustee published pursuant to law
or the requirements of its supervising
or examining authority.**
Exhibit 8. A copy of the certificate dated May 10,
1983 of name change from Northwestern
National Bank Minneapolis to Norwest
Bank Minneapolis, National Association.*
Exhibit 9. A copy of the certificate dated
January 11, 1988, of name change from
Norwest Bank Minneapolis, National
Association to Norwest Bank Minnesota,
National Association.*
* Incorporated by reference to the exhibit of the
same number filed with the registration statement
number 33-66086.
** Incorporated by reference to the exhibit of the
same number filed with the registration statement
number 333-07005.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, Norwest Bank Minnesota, National
Association, a national banking association organized and
existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City of
Minneapolis and State of Minnesota on the 23rd day of September,
1996.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/Curtis D. Schwegman
Assistant Vice President
EXHIBIT 6
September 23, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In accordance with Section 321 (b) of the Trust Indenture
Act of 1939, as amended, the undersigned hereby consents
that reports of examination of the undersigned made by
Federal or State authorities authorized to make such
examination may be furnished by such authorities to the
Securities and Exchange Commission upon its request
therefor.
Very truly yours,
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/Curtis D. Schwegman
Assistant Vice President
