<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended March 31, 2000.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from __________ to _________.
Commission File Number: 0-19290
[COR THERAPEUTICS, INC. LOGO]
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
94-3060271
(I.R.S. employer identification no.)
(650) 244-6800
(Registrant's telephone number, including area code)
256 EAST GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA 94080
(Address of principal executive offices and zip code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
As of March 31, 2000, the number of outstanding shares of the Registrant's
Common Stock was 26,421,088.
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<PAGE> 2
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
INDEX
<TABLE>
<CAPTION>
Page
Section Contents No.
- ------- -------- ----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Condensed Financial Statements and Notes
Condensed Balance Sheets - March 31, 2000 and December 31, 1999 3
Condensed Statements of Operations - for the three months ended March 31, 2000 and 1999 4
Condensed Statements of Cash Flows - for the three months ended March 31, 2000 and 1999 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9
Item 3. Financial Market Risks 18
PART II OTHER INFORMATION
Item 2. Recent Sale of Unregistered Securities 18
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 20
</TABLE>
INTEGRILIN(R) (eptifibatide) Injection, COR Therapeutics(R), and COR(R) are
registered trademarks of COR Therapeutics, Inc.
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<PAGE> 3
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS AND NOTES
CONDENSED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 145,099 $ 12,780
Short-term investments 193,737 32,973
Contract receivables 9,184 5,751
Prepaid copromotion expenses 31,407 30,747
Other current assets 965 791
--------- ---------
Total current assets 380,392 83,042
Property and equipment, net 4,775 4,855
Other assets 10,416 --
--------- ---------
$ 395,583 $ 87,897
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,304 $ 11,020
Accrued interest payable 1,465 --
Accrued compensation 4,906 4,525
Accrued development costs 2,309 1,768
Accrued copromotion costs 1,348 1,291
Deferred revenue 30,574 27,480
Other accrued liabilities 503 511
Capital lease obligations--current portion 1,512 1,621
--------- ---------
Total current liabilities 52,921 48,216
Capital lease obligations--noncurrent portion 2,581 2,925
Convertible subordinated notes 300,000 --
Stockholders' equity 265,256 251,990
Accumulated deficit (225,175) (215,234)
--------- ---------
Total stockholders' equity 40,081 36,756
--------- ---------
$ 395,583 $ 87,897
========= =========
</TABLE>
See accompanying notes
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<PAGE> 4
COR THERAPEUTICS, INC.
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CONDENSED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
2000 1999
-------- --------
<S> <C> <C>
Contract revenues:
Copromotion revenue $ 16,904 $ 5,668
Development and other contract revenue 992 1,853
-------- --------
Total contract revenues 17,896 7,521
-------- --------
Expenses:
Cost of copromotion revenue 10,947 3,917
Research and development 10,414 9,984
Marketing, general and administrative 7,180 6,196
-------- --------
Total expenses 28,541 20,097
-------- --------
Loss from operations (10,645) (12,576)
Interest income 2,392 857
Interest expense (1,688) (117)
-------- --------
Net loss $ (9,941) $(11,836)
======== ========
Basic and diluted net loss per share $ (0.38) $ (0.48)
======== ========
Shares used in computing basic and diluted net loss per share 25,888 24,471
======== ========
</TABLE>
See accompanying notes
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<PAGE> 5
COR THERAPEUTICS, INC.
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CONDENSED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(unaudited, in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash flows used in operating activities:
Net loss $ (9,941) $ (11,836)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 697 642
Amortization of deferred compensation 44 268
Changes in assets and liabilities:
Contract receivables (3,433) 866
Prepaid copromotion expenses (660) (3,899)
Other current assets (174) (1,390)
Accounts payable (716) (240)
Accrued interest payable 1,465 --
Accrued compensation 381 (1,115)
Accrued development costs 541 (955)
Accrued copromotion costs 57 456
Deferred revenue 3,094 2,827
Other accrued liabilities (8) (157)
--------- ---------
Total adjustments 1,288 (2,697)
--------- ---------
Net cash used in operating activities (8,653) (14,533)
--------- ---------
Cash flows provided by (used in) investing activities:
Purchases of short-term investments (168,987) (5,957)
Sales of short-term investments 1,662 25,162
Maturities of short-term investments 6,432 6,497
Additions to property and equipment (492) (524)
--------- ---------
Net cash provided by (used in) investing activities (161,385) 25,178
--------- ---------
Cash flows provided by (used in) financing activities:
Proceeds from capital lease obligations -- 479
Repayment of capital lease obligations (453) (594)
Proceeds from convertible subordinated notes, net of issuance costs 289,459 --
Issuance of common stock 13,351 334
--------- ---------
Net cash provided by financing activities 302,357 219
--------- ---------
Net increase in cash and cash equivalents 132,319 10,864
Cash and cash equivalents at the beginning of the period 12,780 10,532
--------- ---------
Cash and cash equivalents at the end of the period $ 145,099 $ 21,396
========= =========
</TABLE>
See accompanying notes
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<PAGE> 6
COR THERAPEUTICS, INC.
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NOTES TO CONDENSED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COR Therapeutics, Inc. was incorporated in Delaware on February 4, 1988. COR
Therapeutics, Inc. is sometimes referred to in this Report as COR, COR
Therapeutics, the Company, we, our or us. COR is dedicated to the discovery,
development and commercialization of novel pharmaceutical products to establish
new standards of care for the treatment and prevention of severe cardiovascular
diseases. INTEGRILIN(R) (eptifibatide) Injection is the first product that COR
has taken from discovery to commercialization. Approved by the U.S. Food and
Drug Administration ("FDA") in May 1998, INTEGRILIN is indicated for the
treatment of patients with an acute coronary syndrome and patients who undergo
angioplasty procedures.
Interim financial information
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10 of Regulation
S-X. In the Company's opinion, these condensed financial statements include all
adjustments, consisting only of normal recurring adjustments, which the Company
considers necessary to fairly state the Company's financial position and the
results of its operations and its cash flows. The balance sheet at December 31,
1999 has been derived from the audited financial statements at that date but
does not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. The
accompanying condensed financial statements should be read in conjunction with
the financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999. The results of the
Company's operations for any interim period are not necessarily indicative of
the results of the Company's operations for any other interim period or for a
full fiscal year.
Contract Revenues
Contract revenues include copromotion revenue, milestone revenue, and
development and other contract revenue. Milestone revenue and development and
other contract revenue are recorded as earned based on the performance
requirements of the contract, while related costs are expensed as incurred.
Other contract revenue includes recognition of reimbursement to COR by
Schering-Plough Ltd. and Schering Corporation (collectively, "Schering") of
certain manufacturing-related expenses for materials used outside copromotion
territories at the time the reimbursement is realizable and earned. Copromotion
revenue is generally recognized at the time of shipment of the related product
by Schering to wholesalers and is recorded net of allowances, if any, that
management believes are necessary. The Company did not record milestone revenue
for the three months ended March 31, 2000 or for the three months ended March
31, 1999 as no milestones were achieved during these periods.
Copromotion revenue includes the Company's share of profits, as defined in the
agreement with Schering, from the sales of INTEGRILIN by Schering, as well as
the reimbursement by Schering of the Company's costs of copromotion revenue, at
the time the reimbursement is realizable and earned. The Company's costs of
copromotion revenue consists of certain manufacturing-related and marketing
expenses used within copromotion territories. Certain manufacturing-related
expenses are deferred until the time of shipment of related product by Schering
to its customers inside and outside copromotion territories. Deferred revenue
includes payments from Schering received prior to the period in which the
related contract revenues are earned. To the extent that costs of copromotion
revenue from prior periods have not been reimbursed to the Company, Schering
will make reimbursements from future sales of INTEGRILIN, if any.
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<PAGE> 7
COR THERAPEUTICS, INC.
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Prepaid copromotion expenses
Prepaid copromotion expenses represent materials on-hand, valued at cost, and
prepayments to third-party suppliers associated with manufacturing-related
copromotion expenses. Prepaid copromotion expenses consist of the following (in
thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------- ------------
<S> <C> <C>
Deposits and prepayments $ 5,500 $ 5,626
Bulk materials 12,587 13,169
Finished goods 13,320 11,952
------- -------
$31,407 $30,747
======= =======
</TABLE>
Other assets
Other assets represent issuance costs, net of related amortization, associated
with the Company's sale of $300 million of convertible subordinated notes in
February 2000. These issuance costs are being amortized to interest expense over
the seven-year life of the notes.
Information concerning market and source of supply concentration
The Company and Schering copromote one product, INTEGRILIN(R) (eptifibatide)
Injection, in the United States. Schering also markets INTEGRILIN in Europe as
the Company's exclusive licensee on a royalty-bearing basis. The Company has
established long-term supply arrangements with two suppliers for the bulk
product and with another two suppliers for the filling and final packaging of
INTEGRILIN.
Advertising and promotion costs
Advertising and promotion costs are expensed in the period they are incurred.
Advertising and promotion costs totaled $3,288,000 and $3,037,000 for the three
months ended March 31, 2000 and 1999, respectively.
Reclassification
The Company has reclassified certain prior year balances to conform to the
current year presentation.
Comprehensive Income (Loss)
The Company applies Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" ("SFAS No. 130"). SFAS No. 130 requires
unrealized gains and losses on the Company's available-for-sale securities to be
included in other comprehensive income (loss). For the three months ended March
31, 2000 and 1999, unrealized gains or losses were not material and total
comprehensive loss closely approximated net loss in each period.
Segment Information
The Company applies Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS No.
131"). SFAS No. 131 establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. SFAS No. 131 also establishes
standards for related disclosures about products and services, geographic areas
and major customers.
The Company's business activities include the discovery, development and
commercialization of novel cardiovascular pharmaceutical products and have been
organized into one operating segment. All of the Company's operating assets are
located in the United States. All of the Company's revenues are derived from
within the United States, except for royalty revenue earned on sales of
INTEGRILIN by Schering outside of the United States.
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<PAGE> 8
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
Recent accounting pronouncements
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). SAB
101 summarizes certain areas of the Staff's views in applying generally accepted
accounting principles to revenue in financial statements and specifically
addresses revenue recognition for non-refundable up-front fees received in
connection with collaboration agreements. The Company is currently evaluating
the impact of SAB 101 on its revenue recognition policy related to milestone and
license fees received from Schering.
2. FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:
Cash and cash equivalents: The carrying amount of cash and cash equivalents
reported on the balance sheet approximates its fair value.
Short-term investments: Short-term investments consist of marketable government
and other debt securities and are classified as available-for-sale. These
investments are carried at fair value and any unrealized gains and losses are
reported in a separate component of stockholders' equity. The fair values are
based upon quoted market prices.
The amortized cost and estimated fair value of short-term investments at March
31, 2000, classified by contractual maturity, were as follows (in thousands):
<TABLE>
<CAPTION>
Amortized Estimated
Cost Fair Value
--------- ----------
<S> <C> <C>
Due in one year or less $ 98,163 $ 98,053
Due after one year and in less than three
years 95,816 95,684
-------- --------
$193,979 $193,737
======== ========
</TABLE>
During the three months ended March 31, 2000, the Company sold short-term
investments with a fair value of $1,662,000, resulting in gross realized gains
of $2,000 and gross realized losses of $0.
Long and short-term debt: The carrying amounts of the Company's borrowings under
its secured debt agreements approximate their fair values. The fair values are
estimated using a discounted cash flow analysis based on the Company's current
incremental borrowing rates for similar types of borrowing arrangements.
3. NET LOSS PER SHARE
In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS No. 128"), basic and diluted net loss per share has
been computed using the weighted average number of shares of Common Stock
outstanding during the period. Had the Company been in a net income position,
diluted earnings per share would have included the shares used in the
computation of basic net income per share as well as the impact of the following
weighted average potential dilutive common shares (in thousands):
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
2000 1999
----- -----
<S> <C> <C>
Potential dilutive common shares:
Stock options 3,219 1,588
Convertible subordinated notes 1,765 --
----- -----
4,984 1,588
===== =====
</TABLE>
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Page 8 of 20
<PAGE> 9
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
The impact of these potential dilutive common shares has been excluded from the
computation of diluted earnings per share because the impact is anti-dilutive
for all periods presented.
4. CONVERTIBLE SUBORDINATED NOTES
In February 2000 the Company completed a private placement of $300,000,000
aggregate principal amount of 5.0% convertible subordinated notes due March 1,
2007 (the "Notes"). The Notes are unsecured and subordinated in right of payment
to all of the Company's existing and future senior debt as defined in the
Indenture governing the Notes. Interest on the Notes is payable semi-annually on
March 1 and September 1 of each year, commencing September 1, 2000. The Notes
may be converted by the note holders into shares of COR common stock at a
conversion rate of 14.8028 shares per $1,000 principal amount of notes, which is
equivalent to a conversion price of $67.56 per share. The conversion rate is
subject to adjustment in certain events. The Company has reserved 4,441,000
shares of its authorized common stock for issuance upon conversion of the Notes.
The Company may redeem the Notes on or after March 1, 2003 and prior to
maturity, at a premium. The Company incurred issuance costs related to this
offering of approximately $10,800,000 (including aggregate underwriting
discounts and commissions) which are recorded in other assets and are being
amortized to interest expense over the seven-year life of the Notes.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
In addition to the historical information contained herein, this document
includes forward-looking statements which involve risks and uncertainties.
Actual results of the Company's activities may differ significantly from the
potential results discussed in such forward-looking statements. These
forward-looking statements are based on current expectations, and the Company
assumes no obligation to update this information. Risk factors that might cause
such differences include, but are not limited to, those factors identified below
and in the sections titled "Business" and "Business-Additional Risk Factors" in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999.
OVERVIEW
COR is dedicated to the discovery, development and commercialization of novel
pharmaceutical products to establish new standards of care for the treatment and
prevention of severe cardiovascular diseases. The Company has incurred a
cumulative net loss of $225,175,000 through March 31, 2000. The Company has
funded its operations primarily through public and private debt and equity
financings and proceeds from research and development and commercialization
collaboration agreements.
INTEGRILIN(R) (eptifibatide) Injection is the first product that the Company has
taken from discovery to commercialization. Approved by the FDA in May 1998,
INTEGRILIN is indicated for the treatment of patients with an acute coronary
syndrome and patients who undergo angioplasty procedures. The acute coronary
syndrome indication includes patients with unstable angina and non-Q-wave
myocardial infarction, whether they receive medical treatment or undergo
angioplasty. Launched in June 1998 in the United States in conjunction with
Schering, INTEGRILIN is the only drug in its class that is approved by the FDA
for use in both acute coronary syndromes and in angioplasty. COR and Schering
co-promote the drug in the United States and share any profits or losses.
Schering markets INTEGRILIN in Europe as the Company's exclusive licensee on a
royalty-bearing basis. INTEGRILIN has also received regulatory approval in a
number of countries outside the European Union and the United States and is
marketed in those countries by Schering as the Company's exclusive licensee on a
royalty-bearing basis.
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<PAGE> 10
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
Total sales of INTEGRILIN(R) (eptifibatide) Injection, as reported to COR by
Schering, were $27,600,000 and $11,300,000 for the three months ended March 31,
2000 and 1999, respectively. Product sales reported by Schering for either
period are not necessarily indicative of product sales for any future period.
The ESPRIT study of INTEGRILIN was a randomized, double-blind,
placebo-controlled trial, originally planned for 2,400 patients undergoing
non-urgent percutaneous coronary intervention involving placement of a stent. In
March 2000, COR and Schering announced that INTEGRILIN significantly reduced the
combined incidence of death, heart attack, need for urgent repeat intervention,
or the need for thrombotic bail-out therapy from 10.5 percent with placebo to
6.6 percent (P = 0.0015) over the 48 hours following non-urgent balloon
angioplasty combined with intracoronary stenting. This was the primary endpoint
of the ESPRIT study. In February 2000, an independent Data Safety Monitoring
Committee determined that enrollment in the study should be stopped early in the
ESPRIT study after an interim analysis of 1,758 patients revealed a highly
statistically significant reduction in death or heart attack combined at 48
hours with INTEGRILIN relative to placebo. Additional results of the ESPRIT
study of INTEGRILIN were presented in March 2000 at the 49th Scientific Sessions
of the American College of Cardiology in Anaheim, California.
COR and Schering are conducting or have conducted Phase II clinical trials of
INTEGRILIN with different fibrinolytics in the setting of acute myocardial
infarction. COR and Schering also sponsor additional clinical trials of
INTEGRILIN in a variety of clinical settings.
In addition to the Company's commercial and clinical activities, COR continues
to pursue a wide array of research and development programs. We have developed
an oral GP IIb-IIIa inhibitor, called cromafiban, to prevent platelet
aggregation. Results to date of Phase I and initial Phase II studies for
cromafiban show that it has high affinity and specificity for GP IIb-IIIa.
Inhibition of platelet aggregation by cromafiban has been shown to be dose- and
concentration-dependent. Plasma concentrations have indicated a sufficiently
long elimination half-life to allow for once-daily dosing with a low
peak-to-trough ratio. No food interactions have been observed. Minor bleeding
has been the most prevalent complication encountered during cromafiban therapy
in clinical trials. COR is also conducting preclinical research and development
in several other cardiovascular programs.
RESULTS OF OPERATIONS
Three months ended March 31, 2000 and 1999
Total contract revenues, which include copromotion and development and other
contract revenue, were $17,896,000 for the three months ended March 31, 2000
compared to $7,521,000 for the three months ended March 31, 1999. Copromotion
revenue related to the sales of INTEGRILIN by Schering was $16,904,000 for the
three months ended March 31, 2000 compared to $5,668,000 for the three months
ended March 31, 1999. Development and other contract revenue was $992,000 for
the three months ended March 31, 2000 compared to $1,853,000 for the three
months ended March 31, 1999. Development and other contract revenue varies due
to fluctuations in clinical trial and other development activities. The Company
expects total contract revenues to continue to fluctuate in the future.
Cost of copromotion revenue was $10,947,000 for the three months ended March 31,
2000 compared to $3,917,000 for the three months ended March 31, 1999,
consistent with increased sales of INTEGRILIN in 2000. Cost of copromotion
revenue includes certain manufacturing-related and marketing expenses incurred
in connection with the collaboration with Schering.
Research and development expenses were $10,414,000 for the three months ended
March 31, 2000 compared to $9,984,000 for the three months ended March 31, 1999.
The increase in 2000 compared to 1999 was due to the timing of clinical trial
activities and to increases in headcount and other research, development and
clinical activities associated with product candidates. The Company expects
research and development expenses to increase over the next several years,
although the timing of certain of these expenses may depend on the timing and
phase of, and indications pursued in, additional clinical trials of INTEGRILIN
and other product candidates in development.
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<PAGE> 11
COR THERAPEUTICS, INC.
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Marketing, general and administrative expenses were $7,180,000 for the three
months ended March 31, 2000 compared to $6,196,000 for the three months ended
March 31, 1999. The increase in 2000 compared to 1999 was primarily due to the
addition of marketing and sales personnel for the commercialization of
INTEGRILIN(R) (eptifibatide) Injection, as well as increased staffing and
administrative expenses associated with general corporate activities. The
Company expects marketing, general and administrative costs to continue to
increase over the next several years.
Interest income (net) was $704,000 for the three months ended March 31, 2000
compared to $740,000 for the three months ended March 31, 1999. The decrease in
2000 compared to 1999 was primarily due to changes in average cash and
investment balances and average outstanding debt obligations.
LIQUIDITY AND CAPITAL RESOURCES
The Company had available cash, cash equivalents and short-term investments of
$338,836,000 at March 31, 2000. Cash in excess of immediate requirements is
invested according to the Company's investment policy. The primary objective of
the Company's investment activities is to preserve principal while at the same
time maximizing yields without significantly increasing risk. From inception,
the Company has funded its operations primarily through public and private debt
and equity financings and proceeds from collaboration agreements, including
proceeds related to the sales of INTEGRILIN by Schering. Additional funding has
come from grant revenues, interest income and property and equipment financings.
Net cash used in operating activities and additions to property and equipment
was $9,145,000 for the three months ended March 31, 2000, compared to
$15,057,000 for the three months ended March 31, 1999. The decrease in 2000
compared to 1999 was primarily due to the timing of activities related to the
agreement with Schering and to the effect of reduced losses from operations. The
Company's cash requirements for operating activities and additions to property
and equipment may increase in future periods. The timing of these cash
requirements may vary from period to period depending on the timing and phase
of, and indications pursued in, additional clinical trials of INTEGRILIN and
other product candidates in development.
Cash provided by financing activities was $302,357,000 for the three months
ended March 31, 2000 compared to $219,000 for the three months ended March 31,
1999. The amount for the three months ended March 31, 2000 results primarily
from the issuance of $300,000,000 aggregate principal amount of 5% convertible
subordinated notes in February 2000. The Notes are unsecured and mature on March
1, 2007. The Notes are subordinated in right of payment to all of the Company's
existing and future senior debt (as defined in the Indenture governing the
Notes) and do not restrict the Company from incurring additional senior debt.
See "Note 4 of Notes to Condensed Financial Statements".
The Company expects its cash requirements will increase in future periods due to
costs related to continuation and expansion of research and development,
including clinical trials, and increased marketing, sales, general and
administrative activities. The Company anticipates that its existing capital
resources and interest earned thereon will enable it to maintain its current
level of operations for the next several years. However, the Company's cash
requirements may change depending on numerous factors, including the progress of
the Company's research and development programs, the scope and results of
preclinical and clinical studies and the number and nature of the indications
the Company pursues in clinical studies. The Company's cash requirements may
also change due to the timing of regulatory approvals, technological advances,
determinations as to the commercial potential of the Company's future products
and the status of competitive products. In addition, expenditures may depend on
the establishment and maintenance of collaboration relationships with other
companies, the availability of financing, and other factors. The Company's
capital requirements may also change because of other unanticipated
circumstances. The Company may need to raise substantial additional funds in the
future. Such funds may not be available on favorable terms, if at all. If such
funds are unavailable, the Company may need to delay or curtail its research and
development activities to a significant extent.
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<PAGE> 12
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
RISK FACTORS
Stockholders, potential investors in shares of our stock and holders of our
convertible subordinated notes should carefully consider the following risk
factors, in addition to other information in this Report. We are identifying
these risk factors as important factors that could cause our actual results to
differ materially from those contained in any written or oral forward-looking
statements made by or on behalf of COR. We are relying upon the safe-harbor for
forward-looking statements and any such statements made by or on behalf of COR
are qualified by reference to the following cautionary statements, as well as to
those set forth elsewhere in this Report.
Future revenues from INTEGRILIN(R) (eptifibatide) Injection may be less than
expected.
Our prospects are highly dependent upon increasing the sales of our only
commercial product, INTEGRILIN. Our revenues to date have consisted largely of
contract revenue from development and milestone payments and co-promotion
revenue from product sales by Schering of INTEGRILIN. If sales of INTEGRILIN
fail to increase, it would have a material adverse effect on our business,
financial condition, and results of operations.
A number of factors may affect the rate and breadth of market acceptance of
INTEGRILIN, including:
- - The perception by physicians and other members of the health care community on
the safety and efficacy of INTEGRILIN
- - Acceptance of INTEGRILIN outside the United States
- - Our dependence upon Schering's commitment to market and sell INTEGRILIN
- - The price of INTEGRILIN relative to other drugs or competing treatment
modalities
- - The availability of third-party reimbursement
- - The effectiveness of our sales and marketing efforts with Schering-Plough
- - The need to increase usage of INTEGRILIN throughout the treatment process
- - Side effects or unfavorable publicity concerning INTEGRILIN or other drugs in
its class
We have a history of operating losses and are uncertain of future profitability.
Historically, our expenses have exceeded revenues. We incur significant expenses
in developing, training, maintaining, and managing our sales organization. The
cost of maintaining our sales force may exceed INTEGRILIN product revenues, and
our direct marketing and sales efforts may not be successful. We had an
accumulated deficit as of March 31, 2000, of approximately $225,000,000. These
losses may increase as we expand our commercialization and research and
development activities, and such losses may fluctuate significantly from quarter
to quarter. We may not sustain or increase our contract revenues derived from
product sales or achieve profitable operations.
We may not be able to compete effectively in the cardiovascular disease market.
Due to the incidence and severity of cardiovascular diseases, the market for
therapeutic products that address such diseases is large, and competition is
intense and expected to increase. Our most significant competitors are major
pharmaceutical companies and more established biotechnology companies, which
have significant resources and expertise in research and development,
manufacturing, testing, obtaining regulatory approvals and marketing. The two
products that compete with INTEGRILIN are abciximab, which is produced by
Johnson & Johnson and sold by Johnson & Johnson and Eli Lilly, & Co., and
tirofiban, which is produced and sold by Merck & Co., Inc. Emerging
pharmaceutical and biotechnology companies may also prove to be significant
competitors, particularly through
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<PAGE> 13
COR THERAPEUTICS, INC.
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collaboration arrangements with large pharmaceutical companies. Many of these
competitors have cardiovascular products approved or in development, and operate
large, well-funded cardiovascular research and development programs. We must
also compete with academic institutions, governmental agencies, and other public
and private research organizations that conduct research in the cardiovascular
field, seek patent protection for their discoveries and establish collaboration
arrangements for product and clinical development and marketing.
If our collaboration relationships are not successful, we may not be able to
effectively develop and market our products.
We are currently engaged in a number of strategic collaborations with other
companies, consultants, universities and medical centers. Our main collaboration
agreement is with Schering for the sale, marketing and additional development of
INTEGRILIN(R) (eptifibatide) Injection.
Our collaborative relationships may not be successful or lead to the development
or commercialization of any particular product or any product opportunity in the
ongoing development and marketing of INTEGRILIN. Although under our current
agreements we work exclusively with our collaborators within a defined field for
a defined period, a collaborator or collaborators may terminate its or their
agreement with us or separately pursue alternative products, therapeutic
approaches, or technologies as a means of developing treatments for the diseases
targeted by us or a collaboration. For these and other reasons, even if a
collaborator continues its contributions to the arrangement with us, it may
nevertheless determine not to actively pursue the development or
commercialization of any resulting products. In that event, our ability to
pursue potential products could be severely limited.
We evaluate, on an ongoing basis, potential collaborations where relationships
may complement and expand our research, development, sales, or marketing
capabilities. We anticipate that in the future we may need to enter into a new
collaborative relationship to jointly develop and market cromafiban and other
potential products. Any arrangements may limit our flexibility in pursuing
alternatives for the commercialization of our products. We may not be able to
establish any additional collaboration agreements. If established, such
arrangements may not be successful.
Our business may be harmed if our third-party manufacturers are not able to
provide us with adequate supplies of our products.
We currently have no manufacturing facilities and, accordingly, rely on third
parties for clinical and commercial production of INTEGRILIN and for clinical
production of product candidates. If the third-party manufacturers or suppliers
were to cease production or otherwise fail to supply us or we were unable to
contract on acceptable terms for manufacturing services with others, our ability
to produce INTEGRILIN and to conduct preclinical testing and clinical trials of
product candidates, would be adversely affected. This could potentially result
in product supply and distribution shortages of INTEGRILIN and delay of
regulatory approval and new development of product candidates. These results
could materially impair our competitive position and could have a material
adverse effect on our business, financial condition and results of operations.
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<PAGE> 14
COR THERAPEUTICS, INC.
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Our revenue may be affected negatively by reimbursement levels and pricing
limitations.
In both domestic and foreign markets, sales of our products may be affected by
the availability of reimbursement from third-party payors, including government
health administration authorities, managed care providers, private health
insurers and other organizations. In addition, third-party payors may challenge
the price and cost effectiveness of our products. In many major markets outside
of the United States, pricing approval is required before sales can commence.
Significant uncertainty exists as to the reimbursement status of approved health
care products.
We may not be able to obtain or maintain our desired price for our products. Our
products may not be considered cost effective. Also, adequate third-party
reimbursement may not be available to enable us to maintain price levels
sufficient to realize an appropriate return on our investment in product
development. Legislation and regulations affecting the pricing of
pharmaceuticals may change. If adequate coverage and reimbursement levels are
not provided by the government and third-party payors for our products, the
market acceptance of these products would be adversely affected, which would
have a material adverse effect on our business, financial condition and results
of operations.
We may be unable to obtain regulatory approval for our potential products.
We must obtain regulatory approval for the commercial sale of any our potential
products or to promote INTEGRILIN(R) (eptifibatide) Injection for expanded
indications. We must demonstrate through preclinical testing and clinical trials
and, to the FDA's satisfaction, that each product is safe and effective for use
in indications for which approval is requested. The results from preclinical
testing and early clinical trials may not be predictive of results obtained in
large clinical trials. Companies in the pharmaceutical and biotechnology
industries, including us, have suffered significant setbacks in various stages
of clinical trials, even in advanced clinical trials after promising results had
been obtained in earlier trials.
The development of safe and effective products is highly uncertain and subject
to numerous risks. Product candidates that may appear to be promising in
development may not reach the market for a number of reasons. Product candidates
may:
- - be found ineffective or cause harmful side effects during clinical trials
- - take longer to progress through clinical trials than had been anticipated
- - fail to receive necessary regulatory approvals
- - prove impracticable to manufacture in commercial quantities at reasonable cost
and with acceptable quality
- - fail to achieve market acceptance
Completion of research, preclinical testing and clinical trials may take many
years and the length of time varies substantially with the type, complexity,
novelty and intended use of the product. Delays or rejections may be encountered
based upon many factors. Our current development programs may not be
successfully completed. Our regulatory applications to conduct clinical trials
may not be allowed to proceed by the FDA or other regulatory authorities, or
clinical trials may not commence as planned.
In addition, due to the substantial demand for clinical trial sites in the
cardiovascular area, we may have difficulty obtaining sufficient patient
populations or clinician support to conduct our clinical trials as planned and
may have to expend substantial additional funds to obtain access to resources or
delay or modify our plans significantly.
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<PAGE> 15
COR THERAPEUTICS, INC.
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If we are unable to protect our patents and proprietary rights, we may not be
able to compete successfully.
We rely on patent and trade secret protection for significant new technologies,
products and processes because of the long development time, uncertainty and
high cost associated with bringing a new product to the marketplace. The
enforceability of patents issued to companies in this industry can be highly
uncertain and involve complex legal and technical questions for which the legal
principles are largely unresolved. Our success will depend in part on our
ability to obtain and enforce patent protection for our technology both in the
United States and other countries. While we are seeking and/or maintaining
patents for INTEGRILIN(R) (eptifibatide) Injection and our product candidates,
patents may not issue and issued patents may afford limited or no protection.
Additionally, we may not be successful in enforcing our patents and avoiding
infringement of patents granted to others.
We may be required to obtain licenses to patents or other proprietary rights
from third parties. Licenses required under any patents or proprietary rights
may not be made available on terms acceptable to us, if at all. If we do not
obtain required licenses, we may encounter delays in product development while
attempting to redesign products or methods or we could find the development,
manufacture or sale of such products requiring licenses to be foreclosed.
Further, we could incur substantial costs in defending any patent litigation
brought against us or in asserting our patent rights, including those rights
licensed to us by others.
Our common stock price is volatile and an investment in our stock could suffer a
decline in value.
The market prices for securities of pharmaceutical and biotechnology companies,
including our common stock, have historically been volatile. The market has from
time to time experienced significant price and volume fluctuations that are
unrelated to the operating performance of particular companies. The following
are some of the factors that may have a significant effect on the market price
of our common stock:
- - fluctuations in our operating results
- - announcements of technological innovations or new therapeutic products by us
or our competitors
- - announcements regarding collaborative agreements
- - governmental regulation
- - our clinical trial results
- - developments in patent or other proprietary rights
- - public concern as to the safety of drugs developed by us or others
- - comments and expectations of results made by securities analysts
- - general market conditions
In particular, the realization of any of the risks described in this Report
could have a significant and adverse impact on the market price of our common
stock.
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<PAGE> 16
COR THERAPEUTICS, INC.
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Substantial leverage may adversely affect our cash flow and ability to meet our
debt service obligations
In February 2000, we increased our outstanding debt by completing a private
placement of $300,000,000 aggregate principal amount of 5.0% convertible
subordinated notes due March 1, 2007. As a result, our principal and interest
payment obligations increased substantially. The Notes are unsecured and
subordinated in right of payment to all of our existing and future senior debt
and may be convertible under certain conditions. We expect from time to time to
enter into additional financing arrangements to finance capital expenditures and
as future needs arise.
If a change of control were to occur, holders of the Notes have the right to
require us to redeem all or a portion of the holder's Notes. Although the
Indenture governing the Notes allows us, subject to certain conditions, to pay
the redemption price in shares of our common stock, if a change of control were
to occur, we may not have sufficient funds to pay the redemption price for all
of the Notes tendered by the holders.
Our substantial leverage could have significant negative consequences,
including:
- - causing us to be unable to generate cash sufficient to pay the principal or
interest on our debt when due
- - increasing our vulnerability to general adverse economic and industry
conditions
- - limiting our ability to obtain additional financing
- - requiring the dedication of a substantial portion of our expected cash flow
from operations to service our indebtedness, thereby reducing the amount of
our expected cash flow available for other purposes, including capital
expenditures
- - limiting our flexibility in planning for, or reacting to, changes in our
business and the industry in which we compete
- - placing us at a possible competitive disadvantage to less leveraged
competitors
We may require additional funds, which may be difficult to obtain in order to
continue our business as planned.
We require substantial funds to market INTEGRILIN(R) (eptifibatide) Injection
and conduct the costly and time-consuming research, preclinical testing and
clinical trials necessary to develop and optimize our technology and potential
products, to establish manufacturing, marketing and sales capabilities for
product candidates and to bring any such products to market. Our future capital
requirements will depend on many factors, including:
- - product commercialization activities
- - continued scientific progress in the research and development of our
technology and drug programs
- - our ability to establish and maintain collaboration arrangements
- - progress with preclinical testing and clinical trials
- - the time and costs involved in obtaining regulatory approvals
- - the costs involved in preparing, filing, prosecuting, maintaining and
enforcing patent claims or trade secrets
We may seek ongoing funding through collaboration arrangements and public or
private financings, including equity and debt financings. Additional funding may
not be available on favorable terms, if at all. In that event, we may need to
delay or curtail our research and development activities to a significant
extent.
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COR THERAPEUTICS, INC.
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If we do not attract and retain key employees and consultants, our business
could be impaired.
We are highly dependent on the principal members of our scientific and
management staff. In addition, we rely on consultants to assist us in
formulating our research and development strategy. Attracting and retaining
qualified personnel and consultants are critical to our success. We face
competition for qualified individuals from numerous pharmaceutical and
biotechnology companies, universities and other research institutions. If we are
not able to attract and retain these individuals, our business could be
impaired.
We may be subject to product liability claims and our insurance coverage may not
be adequate to cover these claims.
The testing, marketing and sale of human pharmaceutical products expose us to
significant and unpredictable risks of product liability claims in the event
that the use of our technology or products is alleged to have resulted in
adverse effects. These risks will exist even with respect to any products that
receive regulatory approval for commercial sale. Although we have obtained
liability insurance for our products, there can be no assurance that it will be
sufficient to satisfy any liability that may arise. There also can be no
assurance that adequate insurance coverage will be available in the future at an
acceptable cost, if at all, or that a product liability claim would not
adversely affect our business, financial condition or results of operations.
Accidents resulting from the use of hazardous materials in our business may
result in liability.
Our research and development involves the controlled use of hazardous materials,
chemicals, and various radioactive substances. Although we believe that our
safety procedures for handling and disposing of such materials comply with the
standards prescribed by state and federal regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated. In
the event of such an accident, we could be held liable for any damages that
result and any such liability could exceed our resources and have a material
adverse effect on our business, financial condition and results of operations.
Anti-Takeover Effects of Delaware Law and Certain Charter Provisions
Our Board of Directors has the authority to issue up to 5,000,000 shares of
Preferred Stock and to determine the price, rights, preferences and privileges
of those shares without any further vote or action by our stockholders. The
rights of the holders of Common Stock will be subject to and may be adversely
affected by, the rights of the holders of any Preferred Stock that may be issued
in the future. While we have no present intention to issue shares of Preferred
Stock, such issuance, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire a majority of our
outstanding voting stock.
In addition, we are subject to the anti-takeover provisions of Section 203 of
the Delaware General Corporation Law, which prohibits us from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
The application of Section 203 could have the effect of delaying or preventing a
change in our control.
In January 1995, our Board of Directors adopted a Preferred Share Purchase
Rights Plan, commonly referred to as a "poison pill." In addition, our Restated
Certificate of Incorporation (the "Restated Certificate") does not permit
cumulative voting. The Restated Certificate also includes a "Fair Price
Provision" that requires the approval of the holders of at least 66 2/3% of our
voting stock as a condition to a merger or certain other business transactions
with or proposed by, a holder of 15% or more of our voting stock, except where
disinterested Board or stockholder approval is obtained or certain minimum price
criteria and other procedural requirements are met. These provisions and other
provisions of the Restated Certificate, our Company bylaws and Delaware
corporate law, may have the effect of deterring hostile takeovers or delaying or
preventing changes in control or management of COR, including transactions in
which stockholders might otherwise receive a premium for their shares over then
current market prices.
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<PAGE> 18
COR THERAPEUTICS, INC.
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ITEM 3. FINANCIAL MARKET RISKS
The Company is exposed to interest rate risk on its investments of excess cash.
The primary objective of the Company's investment activities is to preserve
principal while at the same time maximizing yields without significantly
increasing risk. To achieve this objective, the Company invests in highly liquid
and high quality government and other debt securities. To minimize the exposure
due to adverse shifts in interest rates, the Company invests in short-term
securities with maturities of less than three years. If a 10% change in interest
rates were to have occurred on March 31, 2000, such a change would not have had
a material effect on the fair value of the Company's investment portfolio as of
that date. Due to the short holding period of the Company's short-term
investments, the Company has concluded that it does not have a material
financial market risk exposure.
PART II. OTHER INFORMATION
ITEM 2. RECENT SALE OF UNREGISTERED SECURITIES
In February 2000 the Company completed a private placement of $300,000,000
aggregate principal amount of 5.0% convertible subordinated notes due March 1,
2007. The initial purchasers of the Notes were Goldman, Sachs & Co., Chase
Securities Inc., CIBC World Markets Corp., FleetBoston Robertson Stephens Inc.
and Warburg Dillon Read LLC (the "Initial Purchasers"). The offering price of
the Notes was 100% of the principal amount of the Notes. The Company incurred
issuance costs related to this offering of approximately $10,800,000 (including
aggregate underwriting discounts and commissions) which will be amortized to
interest expense over the life of the Notes. The sale of the Notes to the
Initial Purchasers was exempt from registration under the Securities Act of
1933, as amended, as a transaction not involving a public offering.
The Notes were re-offered by the Initial Purchasers in the United States to
qualified institutional buyers in reliance on Rule 144A under the Securities
Act. The Notes may not be re-offered or resold in the United States absent
registration under the Securities Act, and applicable state securities laws or
available exemptions from the registration requirements. The Notes and common
stock issuable upon conversation of the Notes are not transferable except in
accordance with certain restrictions.
The holders of the Notes may convert the Notes into shares of the Company's
common stock at a conversion rate of 14.8028 shares per $1,000 principal amount
of Notes, which is equivalent to a conversion price of $67.56 per share. The
conversion rate is subject to adjustment in certain events. The Company has
reserved 4,441,000 shares of its authorized common stock for issuance upon
conversion of the Notes. The Notes are convertible at any time before the close
of business on the maturity date, March 1, 2007, unless the Company has
previously redeemed or repurchased the Notes. Holders of notes called for
redemption or repurchase will be entitled to convert them up to and including,
but not after, the business day immediately preceding the date fixed for
redemption or repurchase, as the case may be.
The Company intends to use the proceeds from the Notes for marketing and selling
activities related to INTEGRILIN(R) (eptifibatide) Injection, research and
development activities and general corporate purposes. Pending such uses, the
proceeds from the Notes have been invested in highly liquid and high quality
government and other debt securities in accordance with the Company's investment
policy.
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<PAGE> 19
COR THERAPEUTICS, INC.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
(a) Exhibit Number Description of Document
-------------- -----------------------
<S> <C> <C>
4.1 Indenture between the Registrant, as Issuer, and Firstar Bank, N.A., as Trustee,
dated February 24, 2000.
10.1 Purchase Agreement among the Registrant and Goldman, Sachs & Co., Chase H&Q, a
division of Chase Securities Inc., CIBC World Markets Corp., FleetBoston Robertson
Stephens Inc. and Warburg Dillon Read LLC, dated February 17, 2000.
10.2 Registration Rights Agreement among the Registrant and Goldman, Sachs & Co., Chase
H&Q, a division of Chase Securities Inc., CIBC World Markets Corp., FleetBoston
Robertson Stephens Inc. and Warburg Dillon Read LLC, dated February 24, 2000.
27.1 Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K
On February 17, 2000 the Company filed a report on Form 8-K related to
the proposed sale of convertible subordinated notes.
On March 3, 2000 the Company filed a report on Form 8-K related to the
sale of $300,000,000 5% convertible subordinated notes.
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<PAGE> 20
COR THERAPEUTICS, INC.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 9, 2000
COR THERAPEUTICS, INC.
<TABLE>
<CAPTION>
Signature Title
- --------------------------- -----------------------------------------------
<S> <C>
/s/ VAUGHN M. KAILIAN President, Chief Executive Officer and Director
- --------------------------- (Principal Executive and Financial Officer)
Vaughn M. Kailian
/s/ PETER S. RODDY Vice President, Finance
- --------------------------- (Principal Accounting Officer)
Peter S. Roddy
</TABLE>
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<PAGE> 21
COR THERAPEUTICS, INC.
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description of Document
- -------------- -----------------------
<S> <C>
4.1 Indenture between the Registrant, as Issuer, and Firstar Bank, N.A., as Trustee,
dated February 24, 2000.
10.1 Purchase Agreement among the Registrant and Goldman, Sachs & Co., Chase H&Q, a
division of Chase Securities Inc., CIBC World Markets Corp., FleetBoston Robertson
Stephens Inc. and Warburg Dillon Read LLC, dated February 17, 2000.
10.2 Registration Rights Agreement among the Registrant and Goldman, Sachs & Co., Chase
H&Q, a division of Chase Securities Inc., CIBC World Markets Corp., FleetBoston
Robertson Stephens Inc. and Warburg Dillon Read LLC, dated February 24, 2000.
27.1 Financial Data Schedule.
</TABLE>
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<PAGE> 1
EXHIBIT 4.1
COR THERAPEUTICS, INC.
ISSUER
TO
FIRSTAR BANK, N.A.
TRUSTEE
----------------
INDENTURE
DATED AS OF FEBRUARY 24, 2000
----------------
UP TO U.S.$300,000,000
5.00% CONVERTIBLE SUBORDINATED NOTES DUE MARCH 1, 2007
<PAGE> 2
TABLE OF CONTENTS
-----------
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS OF THE COMPANY........................................................................................... 1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions........................................................................................ 2
Act................................................................................................ 2
Affiliate.......................................................................................... 2
Agent Member....................................................................................... 2
Applicable Procedures.............................................................................. 3
Authenticating Agent............................................................................... 3
Authorized Newspaper............................................................................... 3
Board of Directors................................................................................. 3
Board Resolution................................................................................... 3
Business Day....................................................................................... 3
Change in Control.................................................................................. 3
Closing Price Per Share............................................................................ 3
Code............................................................................................... 4
Commission......................................................................................... 4
Common Stock....................................................................................... 4
Company............................................................................................ 4
Company Notice..................................................................................... 5
Company Request.................................................................................... 5
Constituent Person................................................................................. 5
Conversion Agent................................................................................... 5
Conversion Price................................................................................... 5
Conversion Rate.................................................................................... 5
Corporate Trust Office............................................................................. 5
corporation........................................................................................ 5
Defaulted Interest................................................................................. 5
Depositary......................................................................................... 5
Designated Senior Debt............................................................................. 5
Dollar............................................................................................. 6
U.S.$.............................................................................................. 6
DTC................................................................................................ 6
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Event of Default................................................................................... 6
Exchange Act....................................................................................... 6
Global Security.................................................................................... 6
Holder............................................................................................. 6
Indenture.......................................................................................... 6
Initial Purchasers................................................................................. 6
Interest Payment Date.............................................................................. 6
Liquidated Damages................................................................................. 7
Maturity........................................................................................... 7
Non-electing Share................................................................................. 7
Notice of Default.................................................................................. 7
Officers' Certificate.............................................................................. 7
Opinion of Counsel................................................................................. 7
Outstanding........................................................................................ 7
Paying Agent....................................................................................... 8
Person............................................................................................. 8
Place of Conversion................................................................................ 9
Place of Payment................................................................................... 9
Predecessor Security............................................................................... 9
Purchase Agreement................................................................................. 9
Record Date........................................................................................ 9
Record Date Period................................................................................. 9
Redemption Date.................................................................................... 9
Redemption Price................................................................................... 9
Registrable Securities............................................................................. 9
Registration Default............................................................................... 9
Registration Rights Agreement...................................................................... 9
Regular Record Date................................................................................ 10
Repurchase Date.................................................................................... 10
Repurchase Price................................................................................... 10
Responsible Officer................................................................................ 10
Restricted Global Security......................................................................... 10
Restricted Securities Legend....................................................................... 10
Rule 144A.......................................................................................... 10
Rule 144A Information.............................................................................. 10
Securities......................................................................................... 10
Securities Act..................................................................................... 10
Securities Act Legend.............................................................................. 10
Security Register.................................................................................. 11
Senior Debt........................................................................................ 11
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
Shelf Registration Statement....................................................................... 12
Special Record Date................................................................................ 12
Stated Maturity.................................................................................... 12
Subsidiary......................................................................................... 12
Successor Security................................................................................. 12
Trading Days....................................................................................... 13
Trust Indenture Act................................................................................ 13
Trustee............................................................................................ 13
United States...................................................................................... 13
Vice President..................................................................................... 13
SECTION 1.2. Compliance Certificates and Opinions............................................................... 13
SECTION 1.3. Form of Documents Delivered to the Trustee......................................................... 14
SECTION 1.4. Acts of Holders of Securities...................................................................... 15
SECTION 1.5. Notices, Etc., to Trustee and Company.............................................................. 18
SECTION 1.6. Notice to Holders of Securities; Waiver............................................................ 19
SECTION 1.7. Effect of Headings and Table of Contents........................................................... 20
SECTION 1.8. Successors and Assigns............................................................................. 20
SECTION 1.9. Separability Clause................................................................................ 20
SECTION 1.10. Benefits of Indenture.............................................................................. 20
SECTION 1.11. Governing Law...................................................................................... 20
SECTION 1.12. Legal Holidays..................................................................................... 20
SECTION 1.13. Conflict with Trust Indenture Act.................................................................. 21
ARTICLE TWO SECURITY FORMS
SECTION 2.1. Form Generally..................................................................................... 21
SECTION 2.2. Form of Security................................................................................... 22
SECTION 2.3. Form of Certificate of Authentication.............................................................. 42
SECTION 2.4. Form of Conversion Notice.......................................................................... 42
ARTICLE THREE THE SECURITIES
SECTION 3.1. Title and Terms.................................................................................... 44
SECTION 3.2. Denominations...................................................................................... 45
SECTION 3.3. Execution,Authentication, Delivery and Dating...................................................... 45
SECTION 3.4. Global Securities; Non-Global Securities........................................................... 46
SECTION 3.5. Registration, Registration of Transfer and Exchange; Restrictions on Transfer...................... 48
SECTION 3.6. Mutilated,Destroyed,Lost or Stolen Securities...................................................... 52
SECTION 3.7. Payment of Interest;Interest Rights Preserved...................................................... 53
SECTION 3.8. Persons Deemed Owners.............................................................................. 55
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
SECTION 3.9. Cancellation....................................................................................... 55
SECTION 3.10. Computation of Interest............................................................................ 55
SECTION 3.11. CUSIP Numbers...................................................................................... 55
ARTICLE FOUR SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture............................................................ 56
SECTION 4.2. Application of Trust Money......................................................................... 57
ARTICLE FIVE REMEDIES
SECTION 5.1. Events of Default.................................................................................. 58
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment................................................. 60
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.................................... 61
SECTION 5.4. Trustee May File Proofs of Claim................................................................... 62
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities........................................ 64
SECTION 5.6. Application of Money Collected..................................................................... 64
SECTION 5.7. Limitation on Suits................................................................................ 65
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert........... 65
SECTION 5.9. Restoration of Rights and Remedies................................................................. 66
SECTION 5.10. Rights and Remedies Cumulative..................................................................... 66
SECTION 5.11. Delay or Omission Not Waiver....................................................................... 66
SECTION 5.12. Control by Holders of Securities................................................................... 67
SECTION 5.13. Waiver of Past Defaults............................................................................ 67
SECTION 5.14. Undertaking for Costs.............................................................................. 68
SECTION 5.15. Waiver of Stay, Usury or Extension Laws............................................................ 68
ARTICLE SIX THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities................................................................ 69
SECTION 6.2. Notice of Defaults................................................................................. 70
SECTION 6.3. Certain Rights of Trustee.......................................................................... 71
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities............................................. 72
SECTION 6.5. May Hold Securities, Act as Trustee Under Other Indentures......................................... 72
SECTION 6.6. Money Held in Trust................................................................................ 73
SECTION 6.7. Compensation and Reimbursement..................................................................... 73
SECTION 6.8. Corporate Trustee Required; Eligibility............................................................ 74
SECTION 6.9. Resignation and Removal; Appointment of Successor.................................................. 74
</TABLE>
<PAGE> 6
<TABLE>
<S> <C>
SECTION 6.10. Acceptance of Appointment by Successor............................................................. 76
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business........................................ 77
SECTION 6.12. Authenticating Agents.............................................................................. 77
SECTION 6.13. Disqualification; Conflicting Interests............................................................ 79
SECTION 6.14. Preferential Collection of Claims Against Company.................................................. 79
ARTICLE SEVEN CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1. Company May Consolidate, Etc., Only on Certain Terms............................................... 80
SECTION 7.2. Successor Substituted.............................................................................. 81
ARTICLE EIGHT SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without Consent of Holders of Securities................................... 81
SECTION 8.2. Supplemental Indentures with Consent of Holders of Securities...................................... 83
SECTION 8.3. Execution of Supplemental Indentures............................................................... 84
SECTION 8.4. Effect of Supplemental Indentures.................................................................. 84
SECTION 8.5. Reference in Securities to Supplemental Indentures................................................. 85
SECTION 8.6. Notice of Supplemental Indentures.................................................................. 85
ARTICLE NINE COVENANTS
SECTION 9.1 Payment of Principal, Premium and Interest......................................................... 85
SECTION 9.2. Maintenance of Offices or Agencies................................................................. 86
SECTION 9.3. Money for Security Payments To Be Held in Trust................................................... 86
SECTION 9.4. Existence.......................................................................................... 88
SECTION 9.5. Maintenance of Properties.......................................................................... 88
SECTION 9.6. Payment of Taxes and Other Claims.................................................................. 89
SECTION 9.7. Registration and Listing........................................................................... 89
SECTION 9.8. Statement by Officers as to Default................................................................ 90
SECTION 9.9. Delivery of Certain Information.................................................................... 90
SECTION 9.10. Resale of Certain Securities; Reporting Issuer..................................................... 91
SECTION 9.11. Registration Rights................................................................................ 91
SECTION 9.12. Waiver of Certain Covenants........................................................................ 94
</TABLE>
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ARTICLE TEN REDEMPTION OF SECURITIES
<TABLE>
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SECTION 10.1. Right of Redemption................................................................................ 95
SECTION 10.2. Applicability of Article........................................................................... 95
SECTION 10.3. Election to Redeem; Notice to Trustee.............................................................. 95
SECTION 10.4. Selection by Trustee of Securities To Be
Redeemed........................................................................................... 96
SECTION 10.5. Notice of Redemption............................................................................... 96
SECTION 10.6. Deposit of Redemption Price........................................................................ 97
SECTION 10.7. Securities Payable on Redemption Date.............................................................. 98
SECTION 10.8. Securities Redeemed in Part........................................................................ 98
SECTION 10.9. Conversion Arrangement on Call for Redemption...................................................... 99
ARTICLE ELEVEN CONVERSION OF SECURITIES
SECTION 11.1. Conversion Privilege and Conversion Rate........................................................... 100
SECTION 11.2. Exercise of Conversion Privilege................................................................... 100
SECTION 11.3. Fractions of Shares................................................................................ 103
SECTION 11.4. Adjustment of Conversion Rate...................................................................... 103
SECTION 11.5. Notice of Adjustments of Conversion Rate........................................................... 110
SECTION 11.6. Notice of Certain Corporate Action................................................................. 111
SECTION 11.7. Company to Reserve Common Stock.................................................................... 112
SECTION 11.8. Taxes on Conversions............................................................................... 112
SECTION 11.9. Covenant as to Common Stock........................................................................ 112
SECTION 11.10. Cancellation of Converted Securities............................................................... 113
SECTION 11.11. Provision in Case of Consolidation, Merger or Sale of Assets....................................... 113
SECTION 11.12. Responsibility of Trustee for Conversion Provisions................................................ 114
ARTICLE TWELVE SUBORDINATION OF SECURITIES
SECTION 12.1. Securities Subordinate to Senior Debt.............................................................. 115
SECTION 12.2. No Payments in Certain Circumstances; Payment Over of Proceeds Upon Dissolution, Etc............... 115
SECTION 12.3. Trustee to Effectuate Subordination................................................................ 118
SECTION 12.4. No Waiver of Subordination Provisions.............................................................. 119
SECTION 12.5. Notice to Trustee.................................................................................. 119
SECTION 12.6. Reliance on Judicial Order or Certificate of Liquidating Agent..................................... 120
SECTION 12.7. Trustee Not Fiduciary for Holders of Senior Debt................................................... 121
SECTION 12.8. Reliance by Holders of Senior Debt on Subordination Provisions..................................... 121
</TABLE>
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<TABLE>
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SECTION 12.9. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights....................... 121
SECTION 12.10. Article Applicable to Paying Agents................................................................ 122
SECTION 12.11. Certain Conversions and Repurchases Deemed Payment................................................. 122
ARTICLE THIRTEEN REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER UPON A CHANGE IN CONTROL
SECTION 13.1. Right to Require Repurchase........................................................................ 123
SECTION 13.2. Conditions to the Company's Election to Pay the Repurchase Price in Common Stock................... 124
SECTION 13.3. Notices; Method of Exercising Repurchase Right, Etc................................................ 125
SECTION 13.4. Certain Definitions................................................................................ 129
ARTICLE FOURTEEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE
SECTION 14.1. Company to Furnish Trustee Names and Addresses of Holders.......................................... 131
SECTION 14.2. Preservation of Information........................................................................ 131
SECTION 14.3. No Recourse Against Others......................................................................... 132
SECTION 14.4. Reports by Trustee................................................................................. 132
SECTION 14.5. Reports by Company................................................................................. 132
SIGNATURES
</TABLE>
<PAGE> 9
INDENTURE, dated as of February 24, 2000, between COR Therapeutics,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware, having its principal office at 256 East Grand Avenue, South San
Francisco, California 94080 (herein called the "Company"), and Firstar Bank,
N.A., a national banking association, as Trustee hereunder (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 5.00%
Convertible Subordinated Notes due March 1, 2007 (herein called the
"Securities") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture.
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done. Further, all
things necessary to duly authorize the issuance of the Common Stock of the
Company issuable upon the conversion of the Securities, and to duly reserve for
issuance the number of shares of Common Stock issuable upon such conversion,
have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
<PAGE> 10
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(3) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 1.4.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the
Depositary.
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"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, to the extent
applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized pursuant to
Section 6.12 to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper in the English language,
customarily published on each Monday, Tuesday, Wednesday, Thursday and Friday,
whether or not published on Saturdays, Sundays or holidays, and of general
circulation in a Place of Payment.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, shall have been
delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment,
Place of Conversion or any other place, as the case may be, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in such Place of Payment, Place of Conversion or other place, as
the case may be, are authorized or obligated by law or executive order to close;
provided, however, that a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close shall not be
a Business Day for purposes of Section 10.6 or Section 11.5.
"Change in Control" has the meaning specified in Section 13.4(b).
"Closing Price Per Share" means, with respect to the Common Stock
of the Company, for any day, (i) the closing price regular way on the New York
Stock Exchange or, (ii) if the Common Stock is not listed on the New York Stock
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Exchange, the closing bid price regular way on the Nasdaq National Market, or
the reported last sales price regular way per share or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading, or (iii) if
the Common Stock is not quoted on the Nasdaq National Market or listed or
admitted to trading on any national securities exchange, the average of the
closing bid prices in the over-the-counter market as furnished by any New York
Stock Exchange member firm selected from time to time by the Company for that
purpose.
"Code" has the meaning specified in Section 2.1.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means the common stock, par value $0.0001 per
share, of the Company authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 11.11, shares issuable on
conversion or repurchase of Securities shall include only shares of Common Stock
or shares of any class or classes of common stock resulting from any
reclassification or reclassifications thereof; provided, however, that if at any
time there shall be more than one such resulting class, the shares so issuable
on conversion of Securities shall include shares of all such classes, and 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" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
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"Company Notice" has the meaning specified in Section 13.3.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President or a Vice
President, and by its principal financial officer, Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Constituent Person" has the meaning specified in Section 11.11.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article Eleven. The Company has initially
appointed the Trustee as its Conversion Agent in the State of Minnesota, County
of Ramsey, The City of St. Paul.
"Conversion Price" has the meaning specified in Section 13.4(c).
"Conversion Rate" has the meaning specified in Section 11.1.
"Corporate Trust Office" means the office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at 101 E. 5th
Street, 12th Floor, Corporate Trust, St. Paul, Minnesota 55101).
"corporation" means a corporation, company, association,
joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to any Registered Securities, a
clearing agency that is registered as such under the Exchange Act and is
designated by the Company to act as Depositary for such Registered Securities
(or any successor securities clearing agency so registered).
"Designated Senior Debt" means any particular Senior Debt in which
the instrument creating or evidencing the same or the assumption or guarantee
thereof (or related
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<PAGE> 14
agreements or documents to which the Company is a party) expressly provides that
such indebtedness shall be "Designated Senior Debt" for purposes of this
Indenture (provided that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Debt to exercise the
rights of Designated Senior Debt).
"Dollar" or "U.S.$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.
"DTC" means The Depository Trust Company, a New York corporation.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the United States Securities Exchange Act of
1934 (or any successor statute), as amended from time to time.
"Global Security" means a Registered Security that is registered
in the Security Register in the name of a Depositary or a nominee thereof.
"Holder" means the Person in whose name the Security is registered
in the Security Register.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Purchasers" means Goldman, Sachs & Co., Chase H&Q, A
Division of Chase Securities Inc., CIBC World Markets Corp., FleetBoston
Robertson Stephens Inc. and Warburg Dillon Read LLC, collectively.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
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"Liquidated Damages" has the meaning specified in Section 9.11.
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article Thirteen or otherwise.
"Non-electing Share" has the meaning specified in Section 11.11.
"Notice of Default" has the meaning specified in Section 5.1.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President or a Vice President and by the principal financial officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money
in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such
Securities, provided that if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to
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this Indenture or provision therefor satisfactory to the Trustee
has been made; and
(iii) Securities which have been paid pursuant to Section
3.6 or in exchange for or in lieu of which other Securities have
been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of or interest on any Securities on behalf of the Company and,
except as otherwise specifically set forth herein, such term shall include the
Company if it shall act as its own Paying Agent. The Company has initially
appointed the Trustee as its Paying Agent in the State of Minnesota, County of
Ramsey, The City of St. Paul.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, trust, estate, unincorporated organization
or government or any agency or political subdivision thereof.
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"Place of Conversion" has the meaning specified in Section 3.1.
"Place of Payment" has the meaning specified in Section 3.1.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means the Purchase Agreement, dated as of
February 17, 2000, between the Company and the Initial Purchasers, as such
agreement may be amended from time to time.
"Record Date" means any Regular Record Date or Special Record
Date.
"Record Date Period" means the period from the close of business
of any Regular Record Date next preceding any Interest Payment Date to the
opening of business on such Interest Payment Date.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registrable Securities" has the meaning specified in Section
9.11.
"Registration Default" has the meaning specified in Section 9.11.
"Registration Rights Agreement" has the meaning specified in
Section 2.2.
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"Regular Record Date" for interest payable in respect of any
Registered Security on any Interest Payment Date means the 15th day of February
or the 15th day of August (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date.
"Repurchase Date" has the meaning specified in Section 13.1.
"Repurchase Price" has the meaning specified in Section 13.1.
"Responsible Officer", when used with respect to the Trustee,
means any officer within the Corporate Trust Office of the Trustee, including,
without limitation, any vice president, assistant vice president, assistant
treasurer, corporate trust officer or other employee of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge and
familiarity with the particular subject.
"Restricted Global Security" has the meaning specified in Section
2.1.
"Restricted Securities Legend" means, collectively, the legends
substantially in the forms of the legends required in the form of Security set
forth in Section 2.2 to be placed upon each Security.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Rule 144A Information" has the meaning specified in Section 9.9.
"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of 1933
(or any successor statute), as amended from time to time.
"Securities Act Legend" means a Restricted Securities Legend.
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"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and
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) on, and all fees and
other amounts payable in connection with, the following, whether absolute or
contingent, secured or unsecured, due or to become due, outstanding on the date
of this Indenture or thereafter created, incurred or assumed: (a) all
indebtedness of the Company evidenced by credit or loan agreements, notes,
bonds, debentures, or other similar instruments, (b) all obligations of the
Company for money borrowed, (c) all obligations of the Company (1) as lessee
under leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles and (2) as lessee under other leases
for facilities, equipment, or other assets, whether or not capitalized, entered
into for financing purposes (including any so-called "synthetic leases"), (d)
all obligations of the Company under interest rate and currency swaps, caps,
floors, collars, hedge agreements, forward contracts, or similar agreements or
arrangements including, without limitation, agreements and arrangements intended
to protect the Company against fluctuations in interest or currency exchange
rates or commodity prices, (e) all obligations of the Company with respect to
letters of credit, bank guarantees, bankers' acceptances and similar facilities
issued for the account of the Company and all reimbursement obligations of the
Company with respect to the foregoing, (f) all obligations of the Company issued
or assumed as the deferred purchase price of any business, property, assets
(including intangibles) or services (but excluding trade accounts payable and
accrued liabilities that constitute liabilities arising in the ordinary course
of business), (g) all obligations of the Company of the type referred to in
clauses (a) through (f) above of another Person and all dividends of another
Person, the payment of which, in either case, the Company has assumed or
guaranteed, or for which the Company is responsible or liable, directly or
indirectly, jointly or severally, as obligor, guarantor or otherwise, or which
is secured by a lien on property of the Company, and (h) renewals, extensions,
modifications, replacements, restatements and refundings of, or any indebtedness
or
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obligation issued in exchange for, any such indebtedness or obligation described
in clauses (a) through (g) of this paragraph; provided, however, that Senior
Debt shall not include the Securities or any such indebtedness or obligation if
the terms of such indebtedness or obligation (or the terms of the instrument
under which, or pursuant to which it is issued) expressly provides that such
indebtedness or obligation is not superior in right of payment to the
Securities; provided, further, that Senior Debt shall not include any
indebtedness or obligation owed by the Company to any direct or indirect
Subsidiary.
"Shelf Registration Statement" has the meaning specified in
Section 9.11.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Company pursuant to Section 3.7.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock or
other similar interests in the corporation which ordinarily has or have voting
power for the election of directors, or persons performing similar functions,
whether at all times or only so long as no senior class of stock or other
interests has or have such voting power by reason of any contingency.
"Successor Security" of any particular Security means every
Security issued after, and evidencing all or a portion of the same debt as that
evidenced by, such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall
be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
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"Trading Days" means (i) if the Common Stock is listed or admitted
for trading on any national securities exchange, days on which such national
securities exchange is open for business; (ii) if the Common Stock is quoted on
the Nasdaq National Market or any other system of automated dissemination of
quotations of securities prices, days on which trades may be effected through
such system; or (iii) if the Common Stock is not listed or admitted for trading
on any national securities exchange or quoted on the Nasdaq National Market or
any other system of automated dissemination of quotation of securities prices,
days on which the Common Stock is traded regular way in the over-the-counter
market and for which a closing bid and a closing asked price for the Common
Stock are available.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction (its "possessions" including Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
"Vice President", when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".
SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision 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
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action have been complied with and, if required by the Trust Indenture Act, an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 9.8) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to the Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or any other Person
stating that the information with respect to such factual matters is in the
possession of the Company or such other Person, unless such counsel knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders of Securities.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Holders of Securities may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Holders in
person or by an agent or proxy duly appointed in writing by such Holders. Such
action shall become effective when such instrument or instruments record is
delivered to the Trustee and, where it is hereby expressly required, to the
Company. The Trustee shall promptly deliver to the Company copies of all such
instruments delivered to the Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders of Securities signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent or proxy, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 6.1) conclusive in favor of the Trustee and the Company if made in the
manner provided in this Section.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The principal amount and serial number of any Registered
Security held by any Person, and the date of his holding the same, shall be
proved by the Security Register.
(d) The fact and date of execution of any such instrument or
writing and the authority of the Person executing the same may also be proved in
any other manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section 1.4.
(e) The Company may set any day as the record date for the purpose
of determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted by this Indenture to be given or taken by
Holders. Promptly and in any case not later than ten days after setting a record
date, the Company shall notify the Trustee and the Holders of such record date.
If not set by the Company prior to the first solicitation of a Holder made by
any Person in respect of any such action, or, in the case of any such vote,
prior to such vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of Holders required to
be provided pursuant to Section 14.1) prior to such first solicitation or vote,
as the case may be. With regard to any record date, the Holders on such date (or
their duly appointed agents or proxies), and only such Persons, shall be
entitled to give or take, or vote on, the relevant action, whether or not such
Holders remain Holders after such record date. Notwithstanding the foregoing,
the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any notice, declaration or direction
referred to in the next paragraph.
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Upon receipt by the Trustee from any Holder of (i) any notice of
default or breach referred to in Section 5.1(4), if such default or breach has
occurred and is continuing and the Trustee shall not have given such a notice to
the Company, (ii) any declaration of acceleration referred to in Section 5.2, if
an Event of Default has occurred and is continuing and the Trustee shall not
have given such a declaration to the Company, or (iii) any direction referred to
in Section 5.12, if the Trustee shall not have taken the action specified in
such direction, then, with respect to clauses (ii) and (iii), a record date
shall automatically and without any action by the Company or the Trustee be set
for determining the Holders entitled to join in such declaration or direction,
which record date shall be the close of business on the tenth day (or, if such
day is not a Business Day, the first Business Day thereafter) following the day
on which the Trustee receives such declaration or direction, and, with respect
to clause (i), the Trustee may set any day as a record date for the purpose of
determining the Holders entitled to join in such notice of default. Promptly
after such receipt by the Trustee of any such declaration or direction referred
to in clause (ii) or (iii), and promptly after setting any record date with
respect to clause (i), and as soon as practicable thereafter, the Trustee shall
notify the Company and the Holders of any such record date so fixed. The Holders
on such record date (or their duly appointed agents or proxies), and only such
Persons, shall be entitled to join in such notice, declaration or direction,
whether or not such Holders remain Holders after such record date; provided
that, unless such notice, declaration or direction shall have become effective
by virtue of Holders of the requisite principal amount of Securities on such
record date (or their duly appointed agents or proxies) having joined therein on
or prior to the 90th day after such record date, such notice, declaration or
direction shall automatically and without any action by any Person be cancelled
and of no further effect. Nothing in this paragraph shall be construed to
prevent a Holder (or a duly appointed agent or proxy thereof) from giving,
before or after the expiration of such 90-day period, a notice, declaration or
direction contrary to or different from, or, after the expiration of such
period, identical to, the notice, declaration or direction to which such record
date relates, in which event a new record date in respect thereof shall be set
pursuant to this paragraph. In addition, nothing in this paragraph shall be
construed to render ineffective any notice,
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declaration or direction of the type referred to in this paragraph given at any
time to the Trustee and the Company by Holders (or their duly appointed agents
or proxies) of the requisite principal amount of Securities on the date such
notice, declaration or direction is so given.
(f) Except as provided in Sections 5.12 and 5.13, any request,
demand, authorization, direction, notice, consent, election, waiver or other Act
of the Holder of any Security shall bind every future Holder of the same
Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 1.5. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of Holders of Securities or other document
provided or permitted by this Indenture to be made upon, given or furnished to,
or filed with,
(1) the Trustee by any Holder of Securities or by the Company
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee and received at its
Corporate Trust Office, Attention: Corporate Trust Department, and shall
be deemed given when received.
(2) the Company by the Trustee or by any Holder of Securities
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing, mailed, first-class postage prepaid,
or telecopied and confirmed by mail, first-class postage prepaid, or
delivered by hand or overnight courier, addressed to the Company at 256
E. Grand Avenue, South, San Francisco, CA 94080, Attention: Vice
President, Finance, or at any other address previously furnished in
writing to the Trustee by the Company, and shall be deemed given when
received.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language,
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except that any published notice may be in an official language of the country
of publication.
SECTION 1.6. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of Securities of any event, such notice
shall be sufficiently given to Holders if in writing and mailed, first-class
postage prepaid, to each Holder of a Security affected by such event, at the
address of such Holder as it appears in the Security Register, not earlier than
the earliest date and not later than the latest date prescribed for the giving
of such notice.
Neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder of a Registered Security shall affect
the sufficiency of such notice with respect to other Holders of Registered
Securities. In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification to Holders of Registered Securities as shall be made with
the approval of the Trustee, which approval shall not be unreasonably withheld
or delayed, shall constitute a sufficient notification to such Holders for every
purpose hereunder.
Such notice shall be deemed to have been given when such notice is
mailed.
In addition to notices by mail, the Company undertakes that any
notice of redemption of the Securities, or notice of any Change in Control and
of the related repurchase right arising as a result thereof, shall further
include a public announcement thereof by release made to Reuters Economic
Services and Bloomberg Business News.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
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SECTION 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.8. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.9. Separability Clause.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.10. Benefits of Indenture.
Except as provided in the next sentence, nothing in this Indenture
or in the Securities, express or implied, shall give to any Person, other than
the parties hereto and their successors and assigns hereunder and the Holders of
Securities, any benefit or legal or equitable right, remedy or claim under this
Indenture. The provisions of Article Twelve are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior Debt.
SECTION 1.11. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED
STATES OF AMERICA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 1.12. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or the last day on which a
Holder of a Security has a right to convert his Security shall not be a Business
Day at a Place of Payment or Place of Conversion, as the case may be, then
(notwithstanding any other provision of this
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Indenture or of the Securities) payment of principal of, premium, if any, or
interest on, or the payment of the Repurchase Price (whether the same is payable
in cash or in shares of Common Stock) with respect to, or delivery for
conversion of, such Security need not be made at such Place of Payment or Place
of Conversion, as the case may be, on or by such day, but may be made on or by
the next succeeding Business Day at such Place of Payment or Place of
Conversion, as the case may be, with the same force and effect as if made on the
Interest Payment Date, Redemption Date or Repurchase Date, or at the Stated
Maturity or by such last day for conversion; provided, however, that in the case
that payment is made on such succeeding Business Day, no interest shall accrue
on the amount so payable for the period from and after such Interest Payment
Date, Redemption Date, Repurchase Date, Stated Maturity or last day for
conversion, as the case may be.
SECTION 1.13. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be. Until such time as this Indenture shall be qualified under the Trust
Indenture Act, this Indenture, the Company and the Trustee shall be deemed for
all purposes hereof to be subject to and governed by the Trust Indenture Act to
the same extent as would be the case if this Indenture were so qualified on the
date hereof.
ARTICLE TWO
SECURITY FORMS
SECTION 2.1. Form Generally.
The Securities shall be in substantially the form set forth in
this Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such
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letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or the Internal Revenue Code of 1986, as amended, and
regulations thereunder (the "Code"), or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. All Securities shall be issued in registered form, as opposed
to bearer form, and shall sometimes be referred to as "Registered Securities".
The Trustee's certificates of authentication shall be in
substantially the form set forth in Section 2.3.
Conversion notices shall be in substantially the form set forth in
Section 2.4.
Repurchase notices shall be substantially in the form set forth in
Section 2.2.
The Securities shall be printed, lithographed, typewritten or
engraved or produced by any combination of these methods on steel engraved
borders if so required by any securities exchange upon which the Securities may
be listed, or may be produced in any other manner permitted by the rules of any
such securities exchange, or, if the Securities are not listed on a securities
exchange, in any other manner approved by the Company, all as determined by the
officers executing such Securities, as evidenced by their execution thereof.
Upon their original issuance, Securities shall be issued in the
form of one or more Global Securities without interest coupons and shall be
registered in the name of DTC, as Depositary, or its nominee and deposited with
the Trustee, as custodian for DTC, for credit by DTC to the respective accounts
of beneficial owners of the Securities represented thereby (or such other
accounts as they may direct). Such Global Security, together with its Successor
Securities which are Global Securities, are collectively herein called the
"Restricted Global Security".
SECTION 2.2. Form of Security
[FORM OF FACE]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED SECURITY OTHER
THAN ANY RESTRICTED GLOBAL SECURITY:
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<PAGE> 31
THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF
THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1)
TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS
OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
THIS NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION
AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME
TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS NOTE AND ANY
SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE
INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS NOTE AND SUCH SHARES SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO
ANY SUCH AMENDMENT OR SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED GLOBAL
SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY AND ANY COMMON
STOCK ISSUABLE UPON THE CONVERSION OF THE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY BENEFICIAL INTEREST IN
THE SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF SUCH BENEFICIAL INTEREST IN
THE SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
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<PAGE> 32
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES
EVIDENCED BY THIS GLOBAL SECURITY (INCLUDING ANY PARTICIPANT IN THE DEPOSITARY
HOLDING THE GLOBAL SECURITY THAT IS SHOWN AS HOLDING SUCH AN INTEREST ON THE
RECORDS OF SUCH DEPOSITARY AND EACH BENEFICIAL OWNER THAT HOLDS THROUGH ANY SUCH
PARTICIPANT) AGREES FOR THE BENEFIT OF COR THERAPEUTICS, INC. (THE "COMPANY")
THAT (A) ANY BENEFICIAL INTEREST IN THE SECURITIES AND ANY SHARES OF COMMON
STOCK ISSUABLE UPON THEIR CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II)
PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (III) TO AN INSTITUTIONAL INVESTOR THAT IS
AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN EACH OF CASES (I) THROUGH
(V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
JURISDICTIONS OF THE UNITED STATES AND THAT (B) THE BENEFICIAL OWNER WILL, AND
EACH SUBSEQUENT BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES
EVIDENCED BY THIS GLOBAL SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF IS REQUIRED TO, NOTIFY ANY PURCHASER OF ANY BENEFICIAL INTEREST IN THE
SECURITIES OR SUCH COMMON STOCK ISSUABLE UPON ITS CONVERSION FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS
CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM
TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS
SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER AND BENEFICIAL
OWNERS OF AN INTEREST IN THIS SECURITY AND ANY SHARES OF COMMON STOCK ISSUABLE
ON CONVERSION SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND THE
BENEFICIAL INTERESTS THEREIN AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY
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BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER
OF THIS SECURITY FOR ALL PURPOSES.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY FOR WHICH
THE DEPOSITORY TRUST COMPANY IS TO BE THE DEPOSITARY:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
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<PAGE> 34
COR THERAPEUTICS, INC.
5.00% CONVERTIBLE SUBORDINATED NOTE
DUE MARCH 1, 2007
No. _____________ U.S.$_____
CUSIP No._______
COR THERAPEUTICS, INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to _______________, or
registered assigns, the principal sum of _____________ United States Dollars
(U.S.$ _____) [if this Security is a Global Security, then insert -- (which
principal amount may from time to time be increased or decreased to such other
principal amounts (which, taken together with the principal amounts of all other
Outstanding Securities, shall not exceed $300,000,000 in the aggregate at any
time) by adjustments made on the records of the Trustee hereinafter referred to
in accordance with the Indenture)] on March 1, 2007 and to pay interest thereon,
from February 24, 2000, or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for,
semi-annually in arrears on March 1 and September 1 in each year (each, an
"Interest Payment Date"), commencing September 1, 2000, at the rate of 5.00% per
annum, until the principal hereof is due, and at the rate of 5.00% per annum on
any overdue principal and premium, if any, and, to the extent permitted by law,
on any overdue interest. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the 15th day of February or the 15th day of
August (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such
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<PAGE> 35
Defaulted Interest to be fixed by the Company, notice whereof shall be given to
Holders of Registered Securities not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. Payments of principal shall be made upon the
surrender of this Security at the option of the Holder at the Corporate Trust
Office of the Trustee, or at such other office or agency of the Company as may
be designated by it for such purpose 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, or at such other offices or agencies as the
Company may designate, by United States Dollar check drawn on, or wire transfer
to, a United States Dollar account (such a wire transfer to be made only to a
Holder of an aggregate principal amount of Registered Securities in excess of
U.S.$2,000,000, and only if such Holder shall have furnished wire instructions
in writing to the Trustee no later than 15 days prior to the relevant payment
date) maintained by the payee with a bank. Payment of interest on this Security
may be made by United States Dollar check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register, or, upon
written application by the Holder to the Security Registrar setting forth wire
instructions not later than the relevant Record Date, by wire transfer to a
United States Dollar account (such a wire transfer to be made only to a Holder
of an aggregate principal amount of Registered Securities in excess of
U.S.$2,000,000 and only if such Holder shall have furnished wire instructions in
writing to the Trustee no later than 15 days prior to the relevant payment date)
maintained by the payee with a bank.
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
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<PAGE> 36
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof or an Authenticating Agent by
the manual signature of one of their respective authorized signatories, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this Security to be
duly executed under its corporate seal.
COR THERAPEUTICS, INC.
[Corporate Seal]
By:
------------------------------------
Name:
Title:
Attest:
- -----------------------------------
Name:
Title:
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<PAGE> 38
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of
the Company designated as its "5.00% Convertible Subordinated Notes due March 1,
2007" (herein called the "Securities"), limited in aggregate principal amount to
U.S.$300,000,000, issued and to be issued under an Indenture, dated as of
February 24, 2000 (herein called the "Indenture"), between the Company and
Firstar Bank, N.A., as Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Debt and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. As provided in the Indenture and subject to certain
limitations therein set forth, Registered Securities are exchangeable for a like
aggregate principal amount of Registered Securities of any authorized
denominations as requested by the Holder surrendering the same upon surrender of
the Registered Security or Registered Securities to be exchanged, at the
Corporate Trust Office of the Trustee. The Trustee upon such surrender by the
Holder will issue the new Registered Securities in the requested denominations.
No sinking fund is provided for the Securities.
The Securities are subject to redemption at the option of the
Company at any time on or after March 1, 2003, in whole or in part, upon not
less than 30 nor more than 60 days' notice to the Holders prior to the
Redemption Date at the following Redemption Prices (expressed as percentages of
the principal amount) for the twelve-month period beginning on March 1 of the
following years:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2003............................ 102.857%
2004............................ 102.143%
2005............................ 101.429%
2006............................ 100.714%
</TABLE>
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<PAGE> 39
and at a Redemption Price equal to 100% of the principal amount on and after
March 1, 2007, together, in each case, with accrued interest to the Redemption
Date; provided, however, that interest installments on Securities whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.
In the event of a redemption of the Securities, the Company will
not be required (a) to register the transfer or exchange of Registered
Securities for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Securities called for such
redemption or (b) to register the transfer or exchange of any Registered
Security, or portion thereof, called for redemption.
Notice to the Holders will be given not less than 30 nor more than
60 days prior to the Redemption Date as provided in the Indenture.
In any case where the due date for the payment of the principal
of, premium, if any, interest, or Liquidated Damages on any Security or the last
day on which a Holder of a Security has a right to convert his Security shall
be, at any Place of Payment or Place of Conversion, as the case may be, a day on
which banking institutions at such Place of Payment or Place of Conversion are
authorized or obligated by law or executive order to close, then payment of
principal, premium, if any, interest, or Liquidated Damages, or delivery for
conversion of such Security need not be made on or by such date at such place
but may be made on or by the next succeeding day at such place which is not a
day on which banking institutions are authorized or obligated by law or
executive order to close, with the same force and effect as if made on the date
for such payment or the date fixed for redemption or repurchase, or by such last
day for conversion, and no interest shall accrue on the amount so payable for
the period from and after such due date.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Security is entitled, at his option, at any time
following the original issue date
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<PAGE> 40
of the Securities and on or before the close of business on March 1, 2007, or in
case this Security or a portion hereof is called for redemption or the Holder
hereof has exercised his right to require the Company to repurchase this
Security or such portion hereof, then in respect of this Security until and
including, but (unless the Company defaults in making the payment due upon
redemption or repurchase, as the case may be) not after, the close of business
on the Business Day immediately preceding the Redemption Date or the Repurchase
Date, as the case may be, to convert this Security (or any portion of the
principal amount hereof that is an integral multiple of U.S.$1,000, provided
that the unconverted portion of such principal amount is U.S.$1,000 or any
integral multiple of U.S.$1,000 in excess thereof) into fully paid and
nonassessable shares of Common Stock of the Company at an initial Conversion
Rate of 14.8028(or at the current adjusted Conversion Rate if an adjustment has
been made as provided in the Indenture) by surrender of this Security, duly
endorsed or assigned to the Company or in blank and, in case such surrender
shall be made during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date (except if this Security has been called for redemption on
a Redemption Date or is repurchasable on a Repurchase Date, with the consequence
that the conversion right of such Security would terminate between such Regular
Record Date and the close of business on such Interest Payment Date), also
accompanied by payment in New York Clearing House or other funds acceptable to
the Company of an amount equal to the interest payable on such Interest Payment
Date on the principal amount of this Security then being converted, and also the
conversion notice hereon duly executed, to the Company at the Corporate Trust
Office of the Trustee, or at such other office or agency of the Company, subject
to any laws or regulations applicable thereto and subject to the right of the
Company to terminate the appointment of any Conversion Agent (as defined below)
as may be designated by it for such purpose in the State of Minnesota, County of
Ramsey, City of St. Paul, or at such other offices or agencies as the Company
may designate (each a "Conversion Agent"), provided, further, that in case
surrender of this Security for conversion shall be made during the period from
the close of business on any Regular Record Date next preceding any Interest
Payment Date to the opening of business on such Interest Payment Date and if
this Security or portion hereof has been called for redemption on a Redemption
Date or is
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<PAGE> 41
repurchasable on a Repurchase Date, with the consequence that the conversion
right of such Security would terminate between such Regular Record Date and the
close of business on such Interest Payment Date, then the Holder of this
Security will be entitled to receive the interest accruing hereon from the
Interest Payment Date next preceding the date of such conversion to such
succeeding Interest Payment Date and shall not be required to pay such interest
upon surrender of this Security for conversion. Subject to the provisions of the
preceding sentence and, in the case of a conversion after the close of business
on the Regular Record Date next preceding any Interest Payment Date and on or
before the close of business on such Interest Payment Date, to the right of the
Holder of this Security (or any Predecessor Security of record as of such
Regular Record Date) to receive the related installment of interest to the
extent and under the circumstances provided in the Indenture, no cash payment or
adjustment is to be made on conversion for interest accrued hereon from the
Interest Payment Date next preceding the day of conversion, or for dividends on
the Common Stock issued on conversion hereof. The Company shall thereafter
deliver to the Holder the fixed number of shares of Common Stock (together with
any cash adjustment, as provided in the Indenture) into which this Security is
convertible and such delivery will be deemed to satisfy the Company's obligation
to pay the principal amount of this Security. No fractions of shares or scrip
representing fractions of shares will be issued on conversion, but instead of
any fractional interest (calculated to the nearest 1/100th of a share) the
Company shall pay a cash adjustment as provided in the Indenture. The Conversion
Rate is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the conveyance, transfer, sale or lease of all or
substantially all of the property and assets of the Company, the Indenture shall
be amended, without the consent of any Holders of Securities, so that this
Security, if then Outstanding, will be convertible thereafter, during the period
this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease by a holder of the
number of shares of Common Stock of the Company into which this Security could
have been converted immediately prior to such consolidation, merger, conveyance,
transfer, sale or lease (assuming such holder of Common Stock is not a
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<PAGE> 42
Constituent Person, failed to exercise any rights of election and received per
share the kind and amount received per share by a plurality of Non-electing
Shares). No adjustment in the Conversion Rate will be made until such adjustment
would require an increase or decrease of at least one percent of such rate,
provided that any adjustment that would otherwise be made will be carried
forward and taken into account in the computation of any subsequent adjustment.
Subject to certain limitations in the Indenture, at any time when
the Company is not subject to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended, upon the request of a Holder of a
Security or the holder of shares of Common Stock issued upon conversion thereof,
the Company will promptly furnish or cause to be furnished Rule 144A Information
(as defined below) to such Holder of Securities or such holder of shares of
Common Stock issued upon conversion of Securities, or to a prospective purchaser
of any such security designated by any such Holder or holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"),
in connection with the resale of any such security. "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
The Holder of this Security [if this Security is a Global
Security, then insert-- (including any Person that has a beneficial interest in
this Security)] and the Common Stock issuable upon conversion hereof is entitled
to the benefits of a Registration Rights Agreement, dated as of February 24,
2000(the "Registration Rights Agreement"), executed by the Company. Pursuant to
the Registration Rights Agreement, the Company has agreed for the benefit of the
Holders from time to time of Registered Securities and the Common Stock issuable
upon conversion thereof, in each case, that are Registrable Securities, at the
Company's expense, (a) to file within 90 days after the first date of original
issuance of the Securities, a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to resales of the
Registrable Securities, (b) thereafter to use its best efforts to cause such
Shelf Registration Statement to be declared effective by the Commission within
180 days after the first date of original issuance of the Securities, and (c) to
use its
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<PAGE> 43
reasonable efforts to maintain such Shelf Registration Statement continuously
effective under the Securities Act until a period of the two years from the date
of the effectiveness of the Shelf Registration Statement or, if earlier, until
(A) there are no outstanding Registrable Securities registered under the Shelf
Registration Statement or (B) the expiration of the period referred to in Rule
144(k) (or any successor provision thereto) under the Securities Act with
respect to all Registrable Securities held by Persons that are not Affiliates of
the Company.
Section 2(a) of the Registration Rights Agreement provides that,
upon written notice to each Holder of a Registrable Security, the Company may
postpone having the Shelf Registration Statement declared effective as required
by Section 2(a) of the Registration Rights Agreement for a reasonable time
specified in the notice but not exceeding 90 days if the Company is in
possession of material non-public information the disclosure of which would have
a material adverse effect on the business, operations, prospects, condition
(financial or otherwise) of the Company and its subsidiaries, taken as a whole.
Notwithstanding any postponement pursuant to Section 2(a) of the Registration
Rights Agreement, if (i) on or prior to 90 days following the date of original
issuance of the Registrable Securities, a Shelf Registration Statement has not
been filed with the Commission, or (ii) on or prior to the 180th day following
the date of original issuance of the Registrable Securities, such Shelf
Registration Statement is not declared effective (each, a "Registration
Default"), additional interest ("Liquidated Damages") will accrue on this
Security from and including the day following such Registration Default to but
excluding the day on which such Registration Default has been cured or, if
earlier, the last day upon which the Shelf Registration Statement is required to
be kept effective. See Section 7(a) of Registration Rights. Liquidated Damages
will be paid semi-annually in arrears, with the first semi-annual payment due on
the first interest payment date in respect of the Registrable Securities
following the date on which such Liquidated Damages begin to accrue, and will
accrue at a rate per annum equal to an additional one-quarter of one percent
(.25%) of the principal amount of the Registrable Securities to and including
the 90th day following such Registration Default and at a rate per annum equal
to one-half of one percent (.50%) thereof from and after the 91st day following
such Registration Default. In the event that the Shelf Registration Statement
ceases to be effective
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<PAGE> 44
prior to the second annual anniversary of the initial effective date of the
Shelf Registration Statement or such earlier date as is provided in the
Registration Rights Agreement for a period in excess of 45 days, whether or not
consecutive, during any 90-day period or more than 90 days, whether or not
consecutive, during any 12-month period, then the interest rate borne by the
Registrable Securities shall increase by an additional one-half of one percent
(.50%) per annum from the 46th day of the 90-day period or the 91st day of the
applicable 12-month period such Shelf Registration Statement ceases to be
effective to but excluding the day on which the Shelf Registration Statement
again becomes effective or, if earlier, the last day upon which the Shelf
Registration Statement is required to be kept effective.
Whenever in this Security there is a reference, in any context, to
the payment of the principal of, premium, if any, or interest on, or in respect
of, any Security such mention shall be deemed to include mention of the payment
of Liquidated Damages payable as described in the preceding paragraph to the
extent that, in such context, Liquidated Damages are, were or would be payable
in respect of this Security pursuant to such paragraph, and an express mention
of the payment of Liquidated Damages (if applicable) in any provisions of this
Security shall not be construed as excluding Liquidated Damages in those
provisions of this Security where such express mention is not made.
If the Holder of this Security [if this Security is a Global
Security, then insert-- (including any Person that has a beneficial interest in
this Security)] elects to sell this Security pursuant to the Shelf Registration
Statement then, by its acceptance hereof, such Holder of this Security agrees to
be bound by the terms of the Registration Rights Agreement relating to the
Registrable Securities which are the subject of such election.
If a Change in Control occurs, the Holder of this Security, at the
Holder's option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is equal to U.S.$5,000 or any greater integral
multiple of U.S.$1,000) for cash at a Repurchase Price equal to 100% of the
principal amount thereof plus interest accrued to the Repurchase Date. At the
option of the Company, the Repurchase Price may be paid in cash or, subject to
the conditions provided in the Indenture, by delivery of shares of Common Stock
having a
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<PAGE> 45
fair market value equal to the Repurchase Price. For purposes of this paragraph,
the fair market value of shares of Common Stock shall be determined by the
Company and shall be equal to 95% of the average of the Closing Price Per Share
for the five consecutive Trading Days immediately preceding and including the
third Trading Day prior to the Repurchase Date. Whenever in this Security there
is a reference, in any context, to the principal of any Security as of any time,
such reference shall be deemed to include reference to the Repurchase Price
payable in respect of such Security to the extent that such Repurchase Price is,
was or would be so payable at such time, and express mention of the Repurchase
Price in any provision of this Security shall not be construed as excluding the
Repurchase Price so payable in those provisions of this Security when such
express mention is not made; provided, however, that, for the purposes of the
paragraph below concerning the consequences of an Event of Default, such
reference shall be deemed to include reference to the Repurchase Price only to
the extent the Repurchase Price is payable in cash.
[The following paragraph shall appear in each Registered Security
that is not a Global Security:
In the event of redemption, repurchase or conversion of this
Security in part only, a new Registered Security or Registered Securities for
the unredeemed, unrepurchased or unconverted portion hereof will be issued in
the name of the Holder hereof.]
[The following paragraph shall appear in each Global Security:
In the event of a deposit or withdrawal of an interest in this
Security, including an exchange, transfer, redemption, repurchase or conversion
of this Security in part only, the Trustee, as custodian of the Depositary,
shall make an adjustment on its records to reflect such deposit or withdrawal in
accordance with the Applicable Procedures.]
The indebtedness evidenced by this Security is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Debt of the Company, and this
Security is issued subject to such provisions of the Indenture with respect
thereto. Each Holder of this Security, by
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<PAGE> 46
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the
principal of all the Securities, together with accrued interest to the date of
declaration, may be declared due and payable in the manner and with the effect
provided in the Indenture. Upon payment (i) of the amount of principal so
declared due and payable, together with accrued interest to the date of
declaration, and (ii) of interest on any overdue principal and, to the extent
permitted by applicable law, overdue interest, all of the Company's obligations
in respect of the payment of the principal of and interest on the Securities
shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company and the Trustee with the written
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute
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<PAGE> 47
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof, premium,
if any, or interest hereon (including Liquidated Damages) on or after the
respective due dates expressed herein or for the enforcement of the right to
convert this Security as provided in the Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest on (including Liquidated Damages) this Security at the
times, places and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of Registered Securities is registrable on the
Security Register upon surrender of a Registered Security for registration of
transfer at the Corporate Trust Office of the Trustee or at such other office or
agency of the Company as may be designated by it for such purpose in the State
of Minnesota, County of Ramsey, City of St. Paul, or at such other offices or
agencies as the Company may designate, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing, and thereupon one or more new Registered Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees by the Registrar. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to recover any tax or other
governmental charge payable in connection therewith.
Prior to due presentation of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Registered Security is
registered as the owner thereof for all purposes, whether or not such Security
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<PAGE> 48
be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest on the Securities (including any Liquidated Damages)
shall be computed on the basis of a 360-day year of twelve 30-day months.
The Indenture and this Security shall be governed by and construed
in accordance with the laws of the State of New York, United States of America,
without regard to the conflicts of laws principles thereof.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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<PAGE> 49
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 13.1 of the Indenture, the undersigned
hereby elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company to
pay it or __________________ an amount in cash or, at the Company's election,
Common Stock valued as set forth in the Indenture, equal to 100% of the
principal amount to be repurchased (as set forth below), plus interest accrued
to the Repurchase Date, as provided in the Indenture.
Dated:
-----------------------------------
------------------------------------
Signature
------------------------------------
Signature Guaranteed
Principal amount to be repurchased
(must be equal to U.S. $5,000 or any greater integral multiple of U.S.$1,000):
Remaining principal amount following such repurchase:
------------------------------------
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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<PAGE> 50
SECTION 2.3. Form of Certificate of Authentication.
The Trustee's certificates of authentication shall be in
substantially the following form:
Dated: [Date of Authentication]
This is one of the Securities referred to in the within-mentioned
Indenture.
------------------------------------
as Trustee
By:
---------------------------------
Authorized Signatory
SECTION 2.4. Form of Conversion Notice.
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably
exercises the option to convert this Security, or any portion of the principal
amount hereof (which is an integral multiple of U.S.$1,000) below designated,
into shares of Common Stock in accordance with the terms of the Indenture
referred to in this Security, and directs that such shares, together with a
check in payment for any fractional share and any Securities representing any
unconverted principal amount hereof, be delivered to and be registered in the
name of the undersigned unless a different name has been indicated below. If
shares of Common Stock or Securities are to be registered in the name of a
Person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto. Any amount required to be paid by the undersigned
on account of interest accompanies this Security.
Dated:
-----------------------------
------------------------------
Signature
If only a portion of the Securities
is to be
If shares or Registered Securities
are to be
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<PAGE> 51
registered in the name of a Person
other than the Holder, please print
such Person's name and address:
- -----------------------------------
Name
- -----------------------------------
Address
- -----------------------------------
Social Security or other Taxpayer
Identification Number, if any
- -----------------------------------
converted, please indicate:
1. Principal amount to be converted:
U.S.$___________
(any integral multiple of U.S.$1,000)
2. Principal amount and denomination of Registered Securities representing
unconverted principal amount to be issued:
Amount: U.S.$________
Denominations:
U.S.$______
(any integral multiple of U.S.$1,000)
- -----------------------------------
[Signature Guaranteed]
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<PAGE> 52
ARTICLE THREE
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to U.S.$300,000,000,
except for Securities authenticated and delivered in exchange for, or in lieu
of, other Securities pursuant to Section 3.4, 3.5, 3.6, 8.5, 10.8, 11.2 or
13.3(e).
The Securities shall be known and designated as the "5.00%
Convertible Subordinated Notes due March 1, 2007" of the Company. Their Stated
Maturity shall be March 1, 2007 and they shall bear interest on their principal
amount from February 24, 2000, payable semi-annually in arrears on March 1 and
September 1 in each year, commencing September 1, 2000, at the rate of 5.00% per
annum until the principal thereof is due and at the rate of 5.00% per annum on
any overdue principal and, to the extent permitted by law, on any overdue
interest; provided, however, that payments shall only be made on Business Days
as provided in Section 1.12.
The principal of, premium, if any, and interest on the Securities
shall be payable as provided in the form of Securities set forth in Section 2.2,
and the Repurchase Price, whether payable in cash or in shares of Common Stock,
shall be payable at such places as are identified in the Company Notice given
pursuant to Section 13.3 (any city in which any Paying Agent is located being
herein called a "Place of Payment").
The Registrable Securities are entitled to the benefits of a
Registration Rights Agreement as provided by Sections 2.2 and 9.11. The
Securities are entitled to the payment of Liquidated Damages and additional
interest as provided by Section 9.11.
The Securities shall be redeemable at the option of the Company,
as provided in Article Ten and in the form of Securities set forth in Section
2.2.
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<PAGE> 53
The Securities shall be convertible as provided in Article Eleven
(any city in which any Conversion Agent is located being herein called a "Place
of Conversion").
The Securities shall be subordinated in right of payment to Senior
Debt of the Company as provided in Article Twelve.
The Securities shall be subject to repurchase by the Company at
the option of the Holders as provided in Article Thirteen.
SECTION 3.2. Denominations.
The Securities shall be issuable only in registered form, without
coupons, in denominations of U.S.$1,000 and integral multiples thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Vice Presidents, under a facsimile of its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. Any such signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee or to its order for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with such Company Order shall authenticate and make available for
delivery such Securities as in this Indenture provided and not otherwise.
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<PAGE> 54
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
SECTION 3.4. Global Securities; Non-Global Securities.
(A) Global Securities
(a) Each Global Security authenticated under this Indenture shall
be registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary (A) has notified the Company that it
is unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act or
announces an intention permanently to cease business or does in fact do so or
(ii) there shall have occurred and be continuing an Event of Default with
respect to such Global Security.
(c) If any Global Security is to be exchanged for other Securities
or canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation, as provided in this Article Three. If any Global Security is to be
exchanged for other Securities or cancelled in part, or if another Security is
to be exchanged in whole or in part for a beneficial interest in any Global
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<PAGE> 55
Security, in each case, as provided in Section 3.5, then either (i) such Global
Security shall be so surrendered for exchange or cancellation, as provided in
this Article Three, or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
cancelled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security, the Trustee shall, subject to Section 3.5(c) and as
otherwise provided in this Article Three, authenticate and make available for
delivery any Securities issuable in exchange for such Global Security (or any
portion thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction or
request of the Depositary or its authorized representative which is given or
made pursuant to this Article Three if such order, direction or request is given
or made in accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a registered Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof, in which case such
Registered Security shall be authenticated and delivered in definitive, fully
registered form, without interest coupons.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Registered Securities, and owners of beneficial interests in
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a Global Security shall hold such interests pursuant to the Applicable
Procedures. Accordingly, any such owner's beneficial interest in a Global
Security will be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members and such owners of beneficial interests in a Global Security
will not be considered the owners or holders thereof.
(B) Non-Global Securities
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Registered Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Registered
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
9.2, without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
SECTION 3.5. Registration, Registration of Transfer and Exchange; Restrictions
on Transfer.
(a) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 9.2
being herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable
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regulations as it may prescribe, the Company shall provide for the registration
of Registered Securities and of transfers of Registered Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers and exchanges of Registered Securities as
herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 9.2 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder, and subject to the other provisions
of this Section 3.5, Securities may be exchanged for other Securities of any
authorized denomination and of a like aggregate principal amount, upon surrender
of the Securities to be exchanged at any such office or agency. Whenever any
Securities are so surrendered for exchange, and subject to the other provisions
of this Section 3.5, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the Holder
making the exchange is entitled to receive. Every Security presented or
surrendered for registration of transfer or for exchange shall (if so required
by the Company or the Security Registrar) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and subject to the other provisions of this Section 3.5, entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.
No service charge shall be made for any registration of transfer
or exchange of Securities except as provided in Section 3.6, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any
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registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 3.4, 8.5, 10.8, 11.2 or 13.3 (other than where the shares of
Common Stock are to be issued or delivered in a name other than that of the
Holder of the Security) not involving any transfer and other than any stamp and
other duties, if any, which may be imposed in connection with any such transfer
or exchange by the United States or any political subdivision thereof or
therein, which shall be paid by the Company.
In the event of a redemption of the Securities, the Company will
not be required (a) to register the transfer of or exchange Securities for a
period of 15 days immediately preceding the date notice is given identifying the
serial numbers of the Securities called for such redemption or (b) to register
the transfer of or exchange any Security, or portion thereof, called for
redemption.
(b) Securities Act Legends. All Securities shall bear the
applicable Restricted Securities Legend subject to the following:
(i) subject to the following Clauses of this Section
3.5(b), a Security or any portion thereof which is exchanged, upon
transfer or otherwise, for a Global Security or any portion thereof
shall bear the Securities Act Legend borne by such Global Security while
represented thereby;
(ii) subject to the following Clauses of this Section
3.5(b), a new Security which is not a Global Security and is issued in
exchange for another Security (including a Global Security) or any
portion thereof, upon transfer or otherwise, shall bear the Securities
Act Legend borne by such other Security;
(iii) any Securities which are sold or otherwise disposed
of pursuant to an effective registration statement under the Securities
Act (including the Shelf Registration Statement), together with their
Successor Securities shall not bear a Securities Act Legend; the Company
shall inform the Trustee in writing of the effective date of any such
registration statement registering the Securities under the Securities
Act and shall notify the Trustee at any time when
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prospectuses may not be delivered with respect to Securities to be sold
pursuant to such registration statement. The Trustee shall not be liable
for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned registration statement;
(iv) at any time after the Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act, a
new Security which does not bear a Securities Act Legend may be issued
in exchange for or in lieu of a Security (other than a Global Security)
or any portion thereof which bears such a legend if the Trustee has
received an Unrestricted Securities Certificate, satisfactory to the
Trustee and duly executed by the Holder of such legended Security or his
attorney duly authorized in writing, and after such date and receipt of
such certificate, the Trustee shall authenticate and make available for
delivery such a new Security in exchange for or in lieu of such other
Security as provided in this Article Three;
(v) a new Security which does not bear a Securities Act
Legend may be issued in exchange for or in lieu of a Security (other
than a Global Security) or any portion thereof which bears such a legend
if, in the Company's judgment, placing such a legend upon such new
Security is not necessary to ensure compliance with the registration
requirements of the Securities Act, and the Trustee, at the direction of
the Company, shall authenticate and make available for delivery such a
new Security as provided in this Article Three; and
(vi) notwithstanding the foregoing provisions of this
Section 3.5(b), a Successor Security of a Security that does not bear a
particular form of Securities Act Legend shall not bear such form of
legend unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of Rule
144, in which case the Trustee, at the direction of the Company, shall
authenticate
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and make available for delivery a new Security bearing a Restricted
Securities Legend in exchange for such Successor Security as provided in
this Article Three.
(c) Neither the Trustee, the Paying Agent nor any of their agents
shall (1) have any duty to monitor compliance with or with respect to any
federal or state or other securities or tax laws or (2) have any duty to obtain
documentation on any transfers or exchanges other than as specifically required
hereunder.
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and make available for
delivery in exchange therefor a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
If there be delivered to the Company and to the Trustee:
(1) evidence to their satisfaction of the destruction, loss or
theft of any Security, and
(2) such security or indemnity as may be satisfactory to the
Company and the Trustee to save each of them and any agent of either of
them harmless,
then, in the absence of actual notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and the Trustee shall authenticate and make available for delivery, in lieu of
any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the conditions set forth in the preceding
paragraph.
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Upon the issuance of any new Security under this Section 3.6, 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 (other than any
stamp and other duties, if any, which may be imposed in connection therewith by
the United States or any political subdivision thereof or therein, which shall
be paid by the Company) and any other expenses (including the fees and expenses
of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 3.6 in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and such new Security shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section 3.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies of any Holder with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may 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 Securities (or their
respective Predecessor Securities)
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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 proposed to be paid on each Security, the
date of the proposed payment and the Special Record Date, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed 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. The
Special Record Date for the payment of such Defaulted Interest shall be
not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee, 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 Holder at such
Holder's address as it appears in the Security Register, not less than
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 Securities (or their respective Predecessor
Securities) are 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 on which the Securities may be listed, and upon such
notice as may be required by such exchange, 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.
Subject to the foregoing provisions of this Section and Section
3.5, each Security delivered under this Indenture upon registration of transfer
of or in exchange
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for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Interest on any Security which is converted in accordance with
Section 11.2 during a Record Date Period shall be payable in accordance with the
provisions of Section 11.2.
SECTION 3.8. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of, premium, if
any, and (subject to Section 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee. All Securities so
delivered to the Trustee shall be canceled promptly by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section 3.9. The Trustee shall dispose of all
canceled Securities in accordance with applicable law and its customary
practices in effect from time to time.
SECTION 3.10. Computation of Interest.
Interest on the Securities (including any Liquidated Damages)
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11. CUSIP Numbers.
The Company in issuing Securities may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers; the Trustee shall use such
CUSIP numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; provided that any
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such notice may state that no representation is made as to the correctness of
such CUSIP numbers either as printed on the Securities or as contained in any
notice of a redemption or repurchase and that reliance may be placed only on the
serial or other identification numbers printed on the Securities, and any such
redemption or repurchase shall not be affected by any defect in or omission of
such CUSIP numbers. The Company shall promptly notify the Trustee in writing of
any change in any such CUSIP number.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, or registration of
transfer or exchange, or replacement of Securities herein expressly provided for
and any right to receive Liquidated Damages as provided in the form of
Securities set forth in Section 2.2 and the Company's obligations to the Trustee
pursuant to Section 6.7), and the Trustee, at the expense of the Company, shall
execute proper instruments in form and substance satisfactory to the Trustee
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.6 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 9.3) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
or its agent for cancellation (other than Securities referred to in
clauses (i) and (ii) of clause (1)(A) above)
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(i) have become due and payable, or
(ii) will have become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of clause (i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as trust funds
(immediately available to the Holders in the case of clause (i)) in trust for
the purpose an amount sufficient to pay and discharge the entire indebtedness on
such Securities not theretofore delivered to the Trustee for cancellation, for
principal, premium, if any, and interest (including any Liquidated Damages) to
the date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.7, the obligations
of the Company to any Authenticating Agent under Section 6.12, the obligation of
the Company to pay Liquidated Damages, if money shall have been deposited with
the Trustee pursuant to clause (1)(B) of this Section 4.1, the obligations of
the Trustee under Section 4.2 and the last paragraph of Section 9.3 and the
obligations of the Company and the Trustee under Section 3.5 and Article Eleven
shall survive. Funds held in trust pursuant to this Section are not subject to
the provisions of Article Twelve.
SECTION 4.2. Application of Trust Money.
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Subject to the provisions of the last paragraph of Section 9.3,
all money deposited with the Trustee pursuant to Section 4.1 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the Persons entitled
thereto, of the principal, premium, if any, and interest for whose payment such
money has been deposited with the Trustee.
All moneys deposited with the Trustee pursuant to Section 4.1 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Twelve or 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):
(1) default in the payment of the principal of or premium, if any,
on any Security at its Maturity, whether or not the such payment is
prohibited by the subordination provisions of this Indenture; or
(2) default in the payment of any interest (including any
Liquidated Damages) upon any Security when it becomes due and payable,
and continuance of such default for a period of 30 days, whether or not
the such payment is prohibited by the subordination provisions of this
Indenture; or
(3) failure by the Company to give the Company notice in
accordance with Section 13.3; or
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(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in the performance or breach of which is specifically
dealt with elsewhere in this Section), and continuance of such default
or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder;
(5) a default in the payment when due of the principal of, or
acceleration of, any indebtedness under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company or any
Subsidiary of the Company or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any
Subsidiary of the Company with a principal amount then outstanding in
excess of U.S.$10,000,000, whether such indebtedness now exists or shall
hereafter be created, if such indebtedness is not discharged, or such
acceleration is not rescinded or annulled, within a period of 30 days
after there shall have been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding
Securities a written notice specifying such default and requiring the
Company to cause such indebtedness to be discharged or such acceleration
to be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or
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appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or similar relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by it
in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company in furtherance of
any such action.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified
in Section 5.1(6) or 5.1(7)) occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
and all accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in Section 5.1(6) or 5.1(7) occurs, the principal of,
and accrued interest on, all the Securities shall ipso facto
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become immediately due and payable without any declaration or other Act of the
Holder or any act on the part of the Trustee.
At any time after such declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article Five provided, the Holders of a
majority in principal amount of the Outstanding Securities, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Liquidated Damages)
on all Securities,
(B) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration and any interest (including any Liquidated Damages)
thereon at the rate borne by the Securities,
(C) to the extent permitted by applicable law, interest upon
overdue interest at a rate of 5.00% per annum, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and its counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of, and any premium and interest on, Securities which have
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 5.13.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
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The Company covenants that if
(1) default is made in the payment of any interest (including any
Liquidated Damages) on any Security when it becomes due and payable and
such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of or premium,
if any, on any Security at the Maturity thereof,
the Company will upon demand of the Trustee pay to it, for the benefit of the
Holders of such Securities the whole amount then due and payable on such
Securities for principal and interest (including any Liquidated Damages) and
interest on any overdue principal and premium, if any, and, to the extent
permitted by applicable law, on any overdue interest (including any Liquidated
Damages), at a rate of 5.00% per annum, and in addition thereto, such further
amount as shall be sufficient to cover the reasonable costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders of Securities by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
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In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or the
creditors of either, the Trustee (irrespective of whether the principal of, and
any interest on, the Securities 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 on the Company for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(1) to file and prove a claim for the whole amount of principal,
premium, if any, and interest (including any Liquidated Damages) owing
and unpaid in respect of the Securities and take such other actions,
including participating as a member, voting or otherwise, of any
official committee of creditors appointed in such matter, and to file
such other papers or documents, in each of the foregoing cases, as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel)
and of the Holders of Securities allowed in such judicial proceeding,
and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities 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
Holders of Securities to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel and any other amounts due the Trustee under Section
6.7.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or
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adopt on behalf of any Holder of a Security any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of
any Holder thereof or to authorize the Trustee to vote in respect of the claim
of any Holder of a Security in any such proceeding; provided, however, that the
Trustee may, on behalf of such Holders, vote for the election of a trustee in
bankruptcy or similar official.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such 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 compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, be for
the ratable benefit of the Holders of the Securities in respect of which
judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Subject to Article Twelve, any money collected by the Trustee
pursuant to this Article Five shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal, premium, if any, or interest, upon presentation
of the Securities and the notation thereon of 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
6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal of, premium, if any, or interest (including any Liquidated
Damages) on, the Securities in respect of which or for the benefit of
which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for
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principal, premium, if any, and interest (including any Liquidated
Damages), respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 5.7. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request; and
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding;
it being understood and intended that no one or more of such Holders 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 of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.
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Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and (subject to Section
3.7) interest (including any Liquidated Damages) on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the case
may be), and to convert such Security in accordance with Article Eleven, and to
institute suit for the enforcement of any such payment and right to convert, and
such rights shall not be impaired without the consent of such Holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and such Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.6, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy
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accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or any acquiescence therein.
Every right and remedy given by this Article Five or by law to the Trustee or to
the Holders of Securities may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or (subject to the limitations contained
in this Indenture) by the Holders of Securities as the case may be.
SECTION 5.12. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities 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 that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults.
The Holders, either (a) through the written consent of not less
than a majority in principal amount of the Outstanding Securities, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of at least a majority in principal
amount of the Outstanding Securities represented at such meeting, may on behalf
of the Holders of all the Securities waive any past default hereunder and its
consequences, except a default (1) in the payment of the principal of, premium,
if any, or interest (including any Liquidated Damages) on any Security, or (2)
in respect of a covenant or provision hereof which under Article Eight cannot be
modified or amended without the consent of the Holder of each Outstanding
Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 5.14 shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder of any Security for the enforcement of the payment of
the principal of, premium, if any, or interest (including any Liquidated
Damages) on any Security on or after the respective Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption or
repurchase, on or after the Redemption Date or Repurchase Date, as the case may
be) or for the enforcement of the right to convert any Security in accordance
with Article Eleven.
SECTION 5.15. Waiver of Stay, Usury or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, usury or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede by reason of
such law 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 had
been enacted.
ARTICLE SIX
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THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture, but not to verify the contents thereof.
(b) In case an Event of Default has occurred and is continuing,
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.
(c) 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
(1) this paragraph (c) shall not be construed to limit the effect
of paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
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(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities 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; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so 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.
SECTION 6.2. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder as to
which the Trustee has actually received written notice, the Trustee shall give
to all Holders of Securities, in the manner provided in Section 1.6, notice of
such default, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of, premium, if any, or interest on any Security the Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors or Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders; and provided, further, that in the case of any
default of the character specified in Section 5.1(4), no such notice to Holders
of Securities shall be given until at least 60 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.
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SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, other
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by
a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities pursuant to this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(6) 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,
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order, bond, debenture, note, coupon, other evidence of indebtedness or
other paper or document, but the Trustee 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
(7) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture, of the Securities or of the Common Stock issuable upon the conversion
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities, Act as Trustee Under Other Indentures.
The Trustee, any Authenticating Agent, any Paying Agent, any
Conversion Agent or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Conversion Agent or such
other agent.
The Trustee may become and act as trustee under other indentures
under which other securities, or certificates of interest or participation in
other securities, of the Company are outstanding in the same manner as if it
were not Trustee hereunder.
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SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as
the Company and the Trustee shall from time to time agree in writing for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee (and its directors, officers,
employees and agents) for, and to hold it harmless against, any and all
loss, damage, claim, liability or expense, including taxes (other than
taxes based on the income of the Trustee), incurred without negligence
or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the reasonable
costs, expenses and reasonable attorneys' fees of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in
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Section 5.1(6) or Section 5.1(7), the expenses (including the reasonable charges
of its counsel) and the compensation for the services are intended to constitute
expenses of the administration under any applicable Federal or State bankruptcy,
insolvency or other similar law.
The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 6.7, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
The provisions of this Section shall survive the termination of
this Indenture or the earlier resignation or removal of the Trustee.
SECTION 6.8. Corporate Trustee Required; Eligibility.
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,
having a combined capital and surplus (or for such purposes, the combined
capital and surplus of any parent holding company) of at least U.S.$25,000,000,
subject to supervision or examination by Federal or State authority, in good
standing and having an office or agent in the Borough of Manhattan, The City of
New York. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article and a successor shall be
appointed pursuant to Section 6.9.
SECTION 6.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of
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appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.10.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.10 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Outstanding Securities, delivered to
the Trustee and the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.10 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of removal, the removed Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 6.8 and
shall fail to resign after written request therefor by the Company or by
any Holder of a Security who has been a bona fide Holder of a Security
for at least six months, or
(2) 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 (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in
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the office of Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee and shall comply with the applicable
requirements of this Section and Section 6.10. If, within one year after such
resignation, removal or incapability, or occurrence of such vacancy, a successor
Trustee shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
6.10, become the successor Trustee and supersede the successor Trustee appointed
by the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders of Securities and accepted appointment in the manner
required by this Section and Section 6.10, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders of Securities in the manner provided in Section 1.6. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 6.10. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly
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vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be eligible under this
Article.
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 6.12. Authenticating Agents.
The Trustee may, with the consent of the Company, appoint an
Authenticating Agent or Agents acceptable to the Company with respect to the
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities issued upon exchange or substitution pursuant to this
Indenture.
Securities authenticated by an Authenticating Agent shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder, and every reference
in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
subject to acceptance by the Company and
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shall at all times be a corporation organized and doing business under the laws
of the United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent and subject to
supervision or examination by government or other fiscal authority. If at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.12.
Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 6.12, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
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 such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12, the Trustee may appoint a successor
Authenticating Agent which shall be subject to acceptance by the Company. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.12.
The Company agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section 6.12.
If an Authenticating Agent is appointed with respect to the
Securities pursuant to this Section 6.12, the
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Securities may have endorsed thereon, in addition to or in lieu of the Trustee's
certification of authentication, an alternative certificate of authentication in
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
------------------------------,
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By
----------------------------
Authorized Signature
SECTION 6.13. Disqualification; Conflicting Interests.
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 6.14. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
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ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease all its properties and assets substantially
as an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease all or
substantially all of its properties and assets to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged, or the Person which
acquires by conveyance or transfer, or which leases the properties and
assets of the Company substantially as an entirety, shall be a
corporation, limited liability company, partnership or trust, shall be
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of, premium, if any, and interest
(including Liquidated Damages, if any, payable pursuant to Section 9.11)
on all of the Securities as applicable, and the performance or
observance of every covenant of this Indenture on the part of the
Company to be performed or observed and shall have provided for
conversion rights in accordance with Article Eleven;
(2) immediately after giving effect to such transaction, no Event
of Default, and no event that after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each
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stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with, together with any documents
required under Section 8.3.
SECTION 7.2. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into any other Person or any conveyance, transfer or lease of all or
substantially all the properties and assets of the Company in accordance with
Section 7.1, the successor Person formed by such consolidation or into or with
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without Consent of Holders of Securities.
Without the consent of any Holders of Securities, the Company,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto for any
of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants and
obligations of the Company herein and in the Securities as permitted by
this Indenture; or
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(2) to add to the covenants of the Company for the benefit of the
Holders of Securities or to surrender any right or power herein
conferred upon the Company; or
(3) to secure the Securities; or
(4) to make provision with respect to the conversion rights of
Holders of Securities pursuant to Section 11.11; or
(5) to make any changes or modifications to this Indenture
necessary in connection with the registration of any Registrable
Securities under the Securities Act as contemplated by Section 9.11,
provided, such action pursuant to this clause (5) shall not, in the
judgment of the Company, adversely affect the interests of the Holders
of Securities in any material respect; or
(6) to comply with the requirements of the Trust Indenture Act or
the rules and regulations of the Commission thereunder in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by this Indenture or otherwise; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(8) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or
which is otherwise defective, or to make any other provisions with
respect to matters or questions arising under this Indenture as the
Company and the Trustee may deem necessary or desirable, provided such
action pursuant to this clause (8) shall not, in the judgment of the
Company, adversely affect the interests of the Holders of Securities in
any material respect.
Upon Company Request, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and subject to and
upon receipt by the Trustee of the documents described in Section 8.3 hereof,
the Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and to make any
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further appropriate agreements and stipulations which may be therein contained.
SECTION 8.2. Supplemental Indentures with Consent of Holders of Securities.
With either (a) the written consent of the Holders of not less
than a majority in principal amount of the Outstanding Securities, by the Act of
said Holders delivered to the Company and the Trustee, or (b) by the adoption of
a resolution, at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of a majority in principal amount of the
Outstanding Securities represented at such meeting, the Company, when authorized
by a Board Resolution, and the Trustee may 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 of
modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent or affirmative vote of the Holder of each Outstanding Security
affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
or the rate of interest payable thereon or any amount payable upon
redemption or repurchase pursuant to Article Thirteen hereof, or change
the obligation of the Company to pay Liquidated Damages pursuant to
Section 9.11 in a manner adverse to the Holders, or change the coin or
currency in which any Security or the interest or any premium thereon or
any other amount in respect thereof is payable, or impair the right to
institute suit for the enforcement of any payment in respect of any
Security on or after the Stated Maturity thereof (or, in the case of
redemption or any repurchase, on or after the Redemption Date or
Repurchase Date, as the case may be) or, except as permitted by Section
11.11, adversely affect the right to convert any Security as provided in
Article Eleven, or modify the provisions of this Indenture with respect
to the subordination of the Securities in a manner adverse to the
Holders of Securities; or
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(2) reduce the percentage in principal amount of the Outstanding
Securities the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture; or
(3) modify any of the provisions of this Section and Section 5.13
or 9.12, except to increase any percentage contained herein or therein
or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Security affected thereby; or
(4) modify the provisions of Article Thirteen in a manner adverse
to the Holders; or
(5) modify any of the provisions of Section 9.9 or 9.10.
It shall not be necessary for any Act of Holders of Securities
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 8.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture, and that such supplemental
indenture has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 8.4. Effect of Supplemental Indentures.
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Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder appertaining thereto shall be bound thereby.
SECTION 8.5. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company and the
Trustee, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 8.6. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2, the Company
shall give notice to all Holders of Securities of such fact, setting forth in
general terms the substance of such supplemental indenture, in the manner
provided in Section 1.6. Any failure of the Company to give such notice, or any
defect therein, shall not in any way impair or affect the validity of any such
supplemental indenture.
ARTICLE NINE
COVENANTS
SECTION 9.1 Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually
pay the principal of and premium, if any, and interest on the Securities in
accordance with the terms of the Securities and this Indenture. The Company will
deposit or cause to be deposited with the Trustee, no later than the opening of
business on the date of the Stated Maturity of
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any Security or no later than the opening of business on the due date for any
installment of interest, all payments so due, which payments shall be in
immediately available funds on the date of such Stated Maturity or due date, as
the case may be.
SECTION 9.2. Maintenance of Offices or Agencies.
The Company hereby appoints the Corporate Trust Office of the
Trustee or such other office or agency of the Trustee as its agent in the
Borough of Manhattan, The City of New York, where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration of
transfer or exchange, where Securities may be surrendered for conversion, and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served.
The Company may at any time and from time to time vary or
terminate the appointment of any such agent or appoint any additional agents for
any or all of such purposes; provided, however, that until all of the Securities
have been delivered to the Trustee for cancellation, or moneys sufficient to pay
the principal of, premium, if any, and interest on the Securities have been made
available for payment and either paid or returned to the Company pursuant to the
provisions of Section 9.3, the Company will maintain in the State of Minnesota,
County of Ramsey, The City of St. Paul, an office or agency where Securities may
be presented or surrendered for payment and conversion, where Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee, and
notice to the Holders in accordance with Section 1.6, of the appointment or
termination of any such agents and of the location and any change in the
location of any such office or agency.
If at any time the Company shall fail to maintain any such
required office or agency, or shall fail to furnish the Trustee with the address
thereof, presentations and surrenders may be made and notices and demands may be
served on the Corporate Trust Office of the Trustee.
SECTION 9.3. Money for Security Payments To Be Held in Trust.
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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 any of
the Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and the Company will promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it
will, no later than the opening of business on each due date of the principal
of, premium, if any, or interest on any Securities, deposit with the Trustee a
sum sufficient to pay the principal, premium, if any, or interest so becoming
due, such sum to be held for the benefit of the Persons entitled to 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 so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct
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any Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent; and,
upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Anything contained herein to the contrary notwithstanding, any
money held by the Trustee or any Paying Agent in trust for the payment and
discharge of the principal of, premium, if any, or interest on any Security
which remains unclaimed for two (2) years after the date when each payment of
such principal, premium or interest has become payable shall be repaid within
sixty (60) days of such date by the Trustee to the Company as its absolute
property free from trust, and the Trustee shall thereupon be released and
discharged with respect thereto and the Holders shall look only to the Company
for the payment of the principal, premium or interest on such Security. The
Trustee shall not be liable to the Company or any Holder for interest on funds
held by it for the payment and discharge of the principal, premium or interest
on any of the Securities to any Holder. The Company shall not be liable for any
interest on the sums paid to it pursuant to this paragraph and shall not be
regarded as a trustee of such money.
SECTION 9.4. Existence.
Subject to Article Seven, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 9.5. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs,
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renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 9.6. Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or
discharged, before the same may become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, (2) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Subsidiary, and (3) all
stamps and other duties, if any, which may be imposed by the United States or
any political subdivision thereof or therein in connection with the issuance,
transfer, exchange or conversion of any Securities or with respect to this
Indenture; provided, however, that, in the case of clauses (1) and (2), the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (a) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company, or
(b) if the amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 9.7. Registration and Listing.
Within a reasonable time after the issuance of the Global
Security, the Company (i) will effect all registrations with, and obtain all
approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) before the shares of Common Stock
issuable upon conversion of Securities may be lawfully issued and delivered, and
qualified or listed as contemplated by clause (ii) (it being understood that the
Company shall not be required to register the Securities under the Securities
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Act, except pursuant to the Registration Rights Agreement referred to in Section
9.11); and (ii) will cause the shares of Common Stock required to be issued and
delivered upon conversion of Securities, prior to such issuance or delivery, to
be listed on the New York Stock Exchange or, if the Common Stock is not then
listed on the New York Stock Exchange, list the Common Stock or qualify the
Common Stock for quotation on each national securities exchange or quotation
system on which outstanding Common Stock is listed or quoted at the time of such
delivery. Nothing in this Section 9.7 will limit the application of Section
9.11.
SECTION 9.8. Statement by Officers as to Default.
The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate (one of the signers of which shall be the Company's
principal executive, principal financial or principal accounting officer),
stating whether or not to the best knowledge of the signers thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming
aware of any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such default or Event of Default and
further stating what action the Company has taken, is taking or proposes to take
with respect thereto.
Any notice required to be given under this Section 9.8 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 9.9. Delivery of Certain Information.
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At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, upon the request of a Holder of a Security or the holder of
shares of Common Stock issued upon conversion thereof, the Company will promptly
furnish or cause to be furnished Rule 144A Information (as defined below) to
such Holder of Securities or such holder of shares of Common Stock issued upon
conversion of Securities, or to a prospective purchaser of any such security
designated by any such Holder or holder, as the case may be, to the extent
required to permit compliance by such Holder or holder with Rule 144A under the
Securities Act (or any successor provision thereto) in connection with the
resale of any such security; provided, however, that the Company shall not be
required to furnish such information in connection with any request made on or
after the date which is two years from the later of (i) the date such a security
(or any such predecessor security) was last acquired from the Company or (ii)
the date such a security (or any such predecessor security) was last acquired
from an "affiliate" of the Company within the meaning of Rule 144 under the
Securities Act (or any successor provision thereto). "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
SECTION 9.10. Resale of Certain Securities; Reporting Issuer.
During the period beginning on the last date of original issuance
of the Securities and ending on the date that is two years from such date, the
Company will not, and will not permit any of its subsidiaries or other
"affiliates" (as defined under Rule 144 under the Securities Act or any
successor provision thereto) controlled by it to, resell (x) any Securities
which constitute "restricted securities" under Rule 144 or (y) any securities
into which the Securities have been converted under this Indenture which
constitute "restricted securities" under Rule 144, that in either case have been
reacquired by any of them. The Trustee shall have no responsibility in respect
of the Company's performance of its agreement in the preceding sentence.
SECTION 9.11. Registration Rights.
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The Company agrees that the Holders from time to time of
Registrable Securities (as defined below) are entitled to the benefits of a
Registration Rights Agreement, dated as of February 24, 2000 (the "Registration
Rights Agreement"), executed by the Company. Pursuant to the Registration Rights
Agreement, the Company has agreed for the benefit of the Holders from time to
time of Registrable Securities, at the Company's expense, (i) to file within 90
days after the first date of original issuance of the Securities, a shelf
registration statement (the "Shelf Registration Statement") with the Commission
with respect to resales of the Registrable Securities, (ii) thereafter use
reasonable efforts to cause such Shelf Registration Statement to be declared
effective by the Commission within 180 days after the first date of original
issuance of the Securities, and (iii) to use reasonable efforts to maintain such
Shelf Registration Statement continuously effective under the Securities Act of
1933, as amended, until a period of two years from the date of the effectiveness
of the Shelf Registration Statement or, if earlier, until (A) there are no
outstanding Registrable Securities registered under the Shelf Registration
Statement or (B) the expiration of the period referred to in Rule 144(k) (or any
successor provision thereto) under the Securities Act with respect to all
Registrable Securities held by Persons that are not Affiliates of the Company.
Section 2(a) of the Registration Rights Agreement provides that,
upon written notice to each Holder of a Registrable Security, the Company may
postpone having the Shelf Registration Statement declared effective as required
by Section 2(a) of the Registration Rights Agreement for a reasonable time
specified in the notice but not exceeding 90 days if the Company is in
possession of material non-public information the disclosure of which would have
a material adverse effect on the business, operations, prospects, condition
(financial or otherwise) of the Company and its subsidiaries, taken as a whole.
Notwithstanding any postponement pursuant to Section 2(a) of the Registration
Rights Agreement, if (i) on or prior to 90 days following the date of original
issuance of the Registrable Securities, a Shelf Registration Statement has not
been filed with the Commission, or (ii) on or prior to the 180th day following
the date of original issuance of the Registrable Securities, such Shelf
Registration Statement is not declared effective (each, a "Registration
Default"), additional interest ("Liquidated Damages") will accrue on the
Registrable
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Securities from and including the day following such Registration Default to but
excluding the day on which such Registration Default has been cured or, if
earlier, the last day upon which the Shelf Registration Statement is required to
be kept effective. Liquidated Damages will be paid semi-annually in arrears,
with the first semi-annual payment due on the first Interest Payment Date in
respect of the Registrable Securities following the date on which such
Liquidated Damages begin to accrue, and will accrue at a rate per annum equal to
an additional one-quarter of one percent (.25%) of the principal amount of the
Registrable Securities to and including the 90th day following such Registration
Default and at a rate per annum equal to one-half of one percent (.50%) thereof
from and after the 91st day following such Registration Default. In the event
that the Shelf Registration Statement ceases to be effective prior to the second
annual anniversary of the initial effective date of the Shelf Registration
Statement or such earlier date as is provided in the Registration Rights
Agreement for a period in excess of 45 days, whether or not consecutive, during
any 90-day period or more than 90 days, whether or not consecutive, during any
12-month period, then the interest rate borne by the Registrable Securities
shall increase by an additional one-half of one percent (.50%) per annum on the
46th day of the 90-day period or the 91st day of the applicable 12-month period
such Shelf Registration Statement ceases to be effective to but excluding the
day on which the Shelf Registration Statement again becomes effective, or if
earlier, the last day upon which the Shelf Registration Statement is required to
be kept effective.
Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of, premium, if any, or interest on, or in respect of,
any Registrable Security, such mention shall be deemed to include mention of the
payment of Liquidated Damages provided for in this Section to the extent that,
in such context, Liquidated Damages are, were or would be payable in respect
thereof pursuant to the provisions of this Section, and express mention of the
payment of Liquidated Damages (if applicable) in any provisions hereof shall not
be construed as excluding Liquidated Damages in those provisions hereof where
such express mention is not made.
For the purposes of the Registration Rights Agreement,
"Registrable Securities" means all or any portion of the Registered Securities
issued from time to time under
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this Indenture and the shares of Common Stock issuable upon conversion of such
Securities; provided, however, that a Security or the shares of Common Stock
issuable upon conversion of a Security ceases to be a Registrable Security when
it (i) has been effectively registered under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provisions thereto)or is transferable pursuant to paragraph (k) of
Rule 144 (or any successor provision thereto) or (iii) otherwise has been
transferred and a new Security or share of Common Stock not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf of the
Company in accordance with Section 3.5(b).
If a Security, or the shares of Common Stock issuable upon
conversion of a Security, is a Registrable Security, and the Holder thereof
elects to sell such Registrable Security pursuant to the Shelf Registration
Statement then, by its acceptance thereof, the Holder of such Registrable
Security will have agreed to be bound by the terms of the Registration Rights
Agreement relating to the Registrable Securities which are the subject of such
election.
For the purposes of the Registration Rights Agreement, the term
"Holder" includes any Person that has a beneficial interest in any Global
Security or any beneficial interest in a global security representing shares of
Common Stock issuable upon conversion of a Security. The Company will give the
Trustee prompt written notice of any Registration Default, and of any cure
thereof.
SECTION 9.12. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or conditions set forth in Sections 9.5 and 9.6, inclusive (other than
a covenant or condition which under Article Eight cannot be modified or amended
without the consent of the Holder of each Outstanding Security affected), if
before the time for such compliance the Holders shall, through the written
consent of, not less than a majority in principal amount of the Outstanding
Securities, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such
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covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee or any Paying or Conversion Agent in respect of any such covenant or
condition shall remain in full force and effect.
ARTICLE TEN
REDEMPTION OF SECURITIES
SECTION 10.1. Right of Redemption.
The Securities may be redeemed in accordance with the provisions
of the form of Securities set forth in Section 2.2.
SECTION 10.2. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of the Securities or this
Indenture, shall be made in accordance with such provision and this Article Ten.
SECTION 10.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of any of the Securities, the Company shall, at least 45 days prior
to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date. If the Securities are to be redeemed pursuant to an election of the
Company which is subject to a condition specified in the form of Securities set
forth in Section 2.2, the Company shall furnish the Trustee with an Officers'
Certificate stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to the
right of the Company so to redeem have occurred.
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SECTION 10.4. Selection by Trustee of Securities To Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected by the Trustee within three Business
Days after it receives the notice described in Section 10.3, from the
Outstanding Securities not previously called for redemption, by such method as
the Trustee may deem fair and appropriate.
If any Registered Security selected for partial redemption is
converted in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be
redeemed may be treated by the Trustee as Outstanding for the purpose of such
selection.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount and
certificate numbers thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 10.5. Notice of Redemption.
Notice of redemption shall be given in the manner provided in
Section 1.6 to the Holders of Securities to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date, and such notice shall be
irrevocable.
All notices of redemption shall identify the Securities to be
redeemed (including CUSIP numbers) and shall state:
(1) the Redemption Date,
(2) the Redemption Price, and accrued interest, if any,
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(3) if less than all Outstanding Securities are to be redeemed,
the aggregate principal amount of Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price, and accrued
interest, if any, will become due and payable upon each such Security to
be redeemed, and that interest thereon shall cease to accrue on and
after said date,
(5) the Conversion Rate, the date on which the right to convert
the Securities to be redeemed will terminate and the places where such
Securities may be surrendered for conversion, and
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest, if
any.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's written
request, by the Trustee in the name of and at the expense of the Company. Notice
of redemption of Securities to be redeemed at the election of the Company
received by the Trustee shall be given by the Trustee to each Paying Agent in
the name of and at the expense of the Company.
SECTION 10.6. Deposit of Redemption Price.
Not less than one Business Day prior to any Redemption Date, the
Company shall deposit with the Trustee (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 9.3) an amount
of money (which shall be in immediately available funds on such Redemption Date)
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date other than any Securities called for redemption
on that date which have been converted prior to the date of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or so segregated and held in trust for the redemption
of such Security shall (subject to any right of the Holder of such
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Security or any Predecessor Security to receive interest as provided in the last
paragraph of Section 3.7) be paid to the Company on Company Request or, if then
held by the Company, shall be discharged from such trust.
SECTION 10.7. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price,
including accrued interest) such Securities shall cease to bear interest. Upon
surrender of any Security for redemption in accordance with said notice such
Security shall be paid by the Company at the Redemption Price together with
accrued and unpaid interest to the Redemption Date; provided, however, that
installments of interest on Securities whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal amount of, premium, if any, and,
to the extent permitted by applicable law, accrued interest on such Security
shall, until paid, bear interest from the Redemption Date at a rate of __% per
annum and such Security shall remain convertible until the principal of such
Security (or portion thereof, as the case may be) shall have been paid or duly
provided for.
SECTION 10.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 9.2 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Registered Security or Securities, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and
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in exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 10.9. Conversion Arrangement on Call for Redemption.
In connection with any redemption of the Securities, the Company
may arrange for the purchase and conversion of any Securities by an agreement
with one or more investment bankers or other purchasers (the "Purchasers") to
purchase such Securities by paying to the Trustee in trust for the Holders, on
or before the Redemption Date, an amount not less than the applicable Redemption
Price, together with interest accrued and unpaid to the Redemption Date, of such
Securities. Notwithstanding anything to the contrary contained in this Article
Ten, the obligation of the Company to pay the Redemption Price, together with
interest accrued and unpaid to the Redemption Date, 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 shall be filed
with the Trustee prior to the close of business on the second Business Day
immediately prior to the Redemption Date), any Securities called for redemption
that are 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, and
consistent with any agreement or agreements with such Purchasers, to be acquired
by such Purchasers from such Holders and (notwithstanding anything to the
contrary contained in this Article Ten) surrendered by such Purchasers for
conversion, all as of immediately prior to the close of business on the
Redemption Date (and the right to convert any such Securities 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 by the Purchasers to the Holders in the same manner as it would
monies deposited with it by the Company for the redemption of Securities.
Without the Trustee's prior written consent, no arrangement between the Company
and such Purchasers for the purchase and conversion of any Securities shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Securities between the Company and such
Purchasers, including the costs and expenses, including reasonable legal fees,
incurred by the Trustee in the defense of any claim or
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liability arising out of or in connection with the exercise or performance of
any of its powers, duties, responsibilities or obligations under this Indenture.
ARTICLE ELEVEN
CONVERSION OF SECURITIES
SECTION 11.1. Conversion Privilege and Conversion Rate.
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any portion of the
principal amount thereof that is U.S.$1,000 or an integral multiple of
U.S.$1,000 may be converted into fully paid and nonassessable shares (calculated
as to each conversion to the nearest 1/100th of a share) of Common Stock of the
Company at the Conversion Rate, determined as hereinafter provided, in effect at
the time of conversion. Such conversion right shall commence upon the original
issuance of the Securities and expire at the close of business on March 1, 2007,
subject, in the case of conversion of any Global Security, to any Applicable
Procedures. In case a Security or portion thereof is called for redemption at
the election of the Company or the Holder thereof exercises his right to require
the Company to repurchase the Security, such conversion right in respect of the
Security, or portion thereof so called, shall expire at the close of business on
the Business Day immediately preceding the Redemption Date or the Repurchase
Date, as the case may be, unless the Company defaults in making the payment due
upon redemption or repurchase, as the case may be (in each case subject as
aforesaid to any Applicable Procedures with respect to any Global Security).
The rate at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Rate") shall be initially 14.8028
shares of Common Stock for each U.S.$1,000 principal amount of Securities. The
Conversion Rate shall be adjusted in certain instances as provided in this
Article Eleven.
SECTION 11.2. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such
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Security, duly endorsed or assigned to the Company or in blank, at any office or
agency of the Company maintained for that purpose pursuant to Section 9.2,
accompanied by a duly signed conversion notice substantially in the form set
forth in Section 2.4 stating that the Holder elects to convert such Security or,
if less than the entire principal amount thereof is to be converted, the portion
thereof to be converted. Each Security surrendered for conversion (in whole or
in part) during the period from the close of business on any Regular Record Date
next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date shall (except in the case of any Security or portion
thereof which has been called for redemption on a Redemption Date, or is to be
repurchased on a Repurchase Date, with the consequence that the conversion right
of such Security would terminate between such Regular Record Date and the close
of business on such 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 payable on such Interest Payment Date on the principal amount of
such Security (or part thereof, as the case may be) being surrendered for
conversion. The interest so payable on such Interest Payment Date with respect
to any Security (or portion thereof, if applicable) which is surrendered for
conversion during the period from the close of business on any Record Date next
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date and which Security has been called for redemption on a Redemption
Date, or is repurchasable on a Repurchase Date, with the consequence that the
conversion right of such Security would terminate between such Regular Record
Date and the close of business on such Interest Payment Date, shall be paid to
the Holder of such Security being converted in an amount equal to the interest
that would have been payable on such Security if such Security had been
converted as of the close of business on such Interest Payment Date. The
interest so payable on such Interest Payment Date in respect of any Security (or
portion thereof, as the case may be) which has not been called for redemption on
a Redemption Date, or is not eligible for repurchase on a Repurchase Date, with
the consequence of termination of the conversion right as aforesaid, which
Security (or portion thereof, as the case may be) is surrendered for conversion
during the period from the close of business on any Record Date next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date, shall be paid to the Holder of such
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Security as of such Regular Record Date. Interest payable in respect of any
Security surrendered for conversion on or after an Interest Payment Date shall
be paid to the Holder of such Security as of the next preceding Regular Record
Date, notwithstanding the exercise of the right of conversion. Except as
provided in this paragraph and subject to the last paragraph of Section 3.7, no
cash payment or adjustment shall be made upon any conversion on account of any
interest accrued from the Interest Payment Date next preceding the conversion
date, in respect of any Security (or part thereof, as the case may be)
surrendered for conversion, or on account of any dividends on the Common Stock
issued upon conversion. The Company's delivery to the Holder of the number of
shares of Common Stock (and cash in lieu of fractions thereof, as provided in
this Indenture) into which a Security is convertible will be deemed to satisfy
the Company's obligation to pay the principal amount of the Security.
Securities shall be deemed to have been converted on the day of
surrender of such Securities for conversion in accordance with the foregoing
provisions, and at such time the rights of the Holders of such Securities as
Holders shall cease, and the Person or Persons entitled to receive the Common
Stock issuable upon conversion shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as practicable
on or after the conversion date, the Company shall issue and deliver to the
Trustee, for delivery to the Holder, a certificate or certificates for the
number of full shares of Common Stock issuable upon conversion, together with
payment in lieu of any fraction of a share, as provided in Section 11.3.
All shares of Common Stock delivered upon such conversion of
Securities shall bear restrictive legends substantially in the form of the
legends required to be set forth on the Securities pursuant to Section 3.5 and
shall be subject to the restrictions on transfer provided in such legends.
Neither the Trustee nor any agent maintained for the purpose of such conversion
shall have any responsibility for the inclusion or content of any such
restrictive legends on such Common Stock; provided, however, that the Trustee or
any agent maintained for the purpose of such conversion shall have provided to
the Company or to the Company's transfer agent for such Common Stock, prior to
or concurrently with a request to the Company to deliver such
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Common Stock, written notice that the Securities delivered for conversion are
Securities.
In the case of any Security which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall authenticate and
make available for delivery to the Holder thereof, at the expense of the
Company, a new Registered Security or Securities of authorized denominations in
an aggregate principal amount equal to the unconverted portion of the principal
amount of such Security. A Security may be converted in part, but only if the
principal amount of such Security to be converted is any integral multiple of
U.S.$1,000 and the principal amount of such security to remain Outstanding after
such conversion is equal to U.S.$1,000 or any integral multiple of U.S.$1,000 in
excess thereof.
SECTION 11.3. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon
conversion of any Security or Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof) so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall calculate and pay a cash
adjustment in respect of such fraction (calculated to the nearest 1/100th of a
share) in an amount equal to the same fraction of the Closing Price Per Share at
the close of business on the day of conversion.
SECTION 11.4. Adjustment of Conversion Rate.
The Conversion Rate shall be subject to adjustments from time to
time as follows:
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in shares of
Common Stock, the Conversion Rate in effect at the opening of business on the
day following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be increased by dividing such
Conversion
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Rate 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 increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. If, after any such date
fixed for determination, any dividend or distribution is not in fact paid, the
Conversion Rate shall be immediately readjusted, effective as of the date the
Board of Directors determines not to pay such dividend or distribution, to the
Conversion Rate that would have been in effect if such determination date had
not been fixed. For the purposes of this paragraph (1), 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.
(2) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the current market price
per share (determined as provided in paragraph (8) of this Section 11.4) of the
Common Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than any rights, options or
warrants that by their terms will also be issued to any Holder upon conversion
of a Security into shares of Common Stock without any action required by the
Company or any other Person), the Conversion Rate in effect at the opening of
business on the day following the date fixed for such determination shall be
increased by dividing such Conversion Rate 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 plus the number of shares of
Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such current market price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately
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after the opening of business on the day following the date fixed for such
determination. If, after any such date fixed for determination, any such rights,
options or warrants are not in fact issued, the Conversion Rate shall be
immediately readjusted, effective as of the date the Board of Directors
determines not to issue such rights, options or warrants, to the Conversion Rate
that would have been in effect if such determination date had not been fixed.
For the purposes of this paragraph (2), 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
issue any rights, options or warrants in respect of shares of Common Stock held
in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, 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.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness,
shares of any class of capital stock, or other property (including cash or
assets or securities, but excluding (i) any rights, options or warrants referred
to in paragraph (2) of this Section, (ii) any dividend or distribution paid
exclusively in cash, (iii) any dividend or distribution referred to in paragraph
(1) of this Section and (iv) any merger or consolidation to which Section 11.11
applies), the Conversion Rate shall be adjusted so that the same shall equal the
rate determined by dividing the Conversion Rate in effect immediately prior to
the close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction of which the numerator shall
be the current market price per share (determined as provided
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in paragraph (8) of this Section 11.4) of the Common Stock on the date fixed for
such determination less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Trustee) of the portion of the assets, shares or
evidences of indebtedness so distributed applicable to one share of Common Stock
and the denominator shall be such current market price per share of the Common
Stock, such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. If, after any such date
fixed for determination, any such distribution is not in fact made, the
Conversion Rate shall be immediately readjusted, effective as of the date the
Board of Directors determines not to make such distribution, to the Conversion
Rate that would have been in effect if such determination date had not been
fixed.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 11.11 applies or as
part of a distribution referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with (I) the aggregate amount of any
other cash distributions to all holders of its Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such distribution and
in respect of which no adjustment pursuant to this paragraph (5) has been made
and (II) the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) of consideration payable in respect of any tender offer by
the Company or any of its subsidiaries for all or any portion of the Common
Stock concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to paragraph (6) of
this Section 11.4 has been made (the "combined cash and tender amount") exceeds
10% of the product of the current market price per share (determined as provided
in paragraph (8) of this Section 11.4) of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such date
(the "aggregate current market price"), then, and in each such case, immediately
after the close of business on such date for
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determination, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Conversion Rate in effect immediately
prior to the close of business on the date fixed for determination of the
stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the current market price per share
(determined as provided in paragraph (8) of this Section) of the Common Stock on
the date fixed for such determination less an amount equal to the quotient of
(x) the excess of such combined cash and tender amount over such aggregate
current market price divided by (y) the number of shares of Common Stock
outstanding on such date for determination and (ii) the denominator of which
shall be equal to the current market price per share (determined as provided in
paragraph (8) of this Section 11.4) of the Common Stock on such date for
determination.
(6) In case a tender offer made by the Company or any Subsidiary
for all or any portion of the Common Stock shall expire and such tender offer
(as amended upon the expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (I) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as of the expiration
of such tender offer, of consideration payable in respect of any other tender
offer by the Company or any Subsidiary for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender
offer and in respect of which no adjustment pursuant to this paragraph (6) has
been made and (II) the aggregate amount of any cash distributions to all holders
of the Company's Common Stock within 12 months preceding the expiration of such
tender offer and in respect of which no adjustment pursuant to paragraph (5) of
this Section has been made (the "combined tender and cash amount") exceeds 10%
of the product of the current market price per share of the Common Stock
(determined as provided in paragraph (8) of this Section 11.4) as of the last
time (the "Expiration Time") tenders could have been made pursuant to such
tender offer (as it may be amended) times the number of shares of
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Common Stock outstanding (including any tendered shares) as of the Expiration
Time, then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate immediately prior to close of business on the date of the
Expiration Time by a fraction (i) the numerator of which shall be equal to (A)
the product of (I) the current market price per share of the Common Stock
(determined as provided in paragraph (8) of this Section 11.4) on the date of
the Expiration Time multiplied by (II) the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time less (B) the
combined tender and cash amount, and (ii) the denominator of which shall be
equal to the product of (A) the current market price per share of the Common
Stock (determined as provided in paragraph (8) of this Section 11.4) as of the
Expiration Time multiplied by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Expiration Time less the
number of all shares validly tendered 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").
(7) The reclassification of Common Stock into securities including
other than Common Stock (other than any reclassification upon a consolidation or
merger to which Section 11.11 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of Common
Stock (and the effective date of such reclassification shall be deemed to be
"the date fixed for the determination of stockholders entitled to receive such
distribution" and "the date fixed for such determination" within the meaning of
paragraph (4) of this Section), and (b) a subdivision or combination, as the
case may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (3) of this Section 11.4).
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(8) For the purpose of any computation under paragraphs (2), (4),
(5) or (6) of this Section 11.4, the current market price per share of Common
Stock on any date shall be calculated by the Company and be deemed to be the
average of the daily Closing Prices Per Share for the five consecutive Trading
Days selected by the Company commencing not more than 10 Trading Days before,
and ending not later than, the earlier of the day in question and the day before
the "ex" date with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "`ex' date", when used
with respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way in the applicable securities market or on the
applicable securities exchange without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent in
such rate; provided, however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
shall be made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be.
(10) The Company may make such increases in the Conversion Rate,
for the remaining term of the Securities or any shorter term, in addition to
those required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section
11.4, as it considers to be advisable in order to avoid or diminish any income
tax liability to any holders of shares of Common Stock resulting from any
dividend or distribution of Common Stock or issuance of rights or warrants to
purchase or subscribe for Common 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 increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days and the Board of Directors shall have
made a determination that such increase would be in the best interests of the
Company, which determination shall be conclusive; provided, however, that such
increase shall not be taken into account for purposes of determining whether the
Closing Price Per Share of the Common Stock exceeds the
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Conversion Price by 105% in connection with an event which would otherwise be a
Change in Control. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall give notice of the increase to the Holders
of Securities in the manner provided in Section 1.6 at least fifteen (15) days
prior to the date the increased Conversion Rate takes effect, and such notice
shall state the increased Conversion Rate and the period during which it will be
in effect.
(11) Notwithstanding the foregoing provisions of this Section, no
adjustment of the Conversion Rate shall be required to be made (a) upon the
issuance of shares of Common Stock pursuant to any present or future plan for
the reinvestment of dividends or (b) because of a tender or exchange offer of
the character described in Rule 13e-4(h)(5) under the Exchange Act or any
successor rule thereto.
SECTION 11.5. Notice of Adjustments of Conversion Rate.
Whenever the Conversion Rate is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Rate in
accordance with Section 11.4 and shall prepare a certificate signed by
the Chief Financial Officer of the Company setting forth the adjusted
Conversion Rate and showing in reasonable detail the facts upon which
such adjustment is based, and such certificate shall promptly be filed
with the Trustee and with each Conversion Agent; and
(2) upon each such adjustment, a notice stating that the
Conversion Rate has been adjusted and setting forth the adjusted
Conversion Rate shall be required, and as soon as practicable after it
is required, such notice shall be provided by the Company to all Holders
in accordance with Section 1.6.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.
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SECTION 11.6. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than exclusively
in cash or (ii) exclusively in cash in an amount that would require any
adjustment pursuant to Section 11.4; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company, or
of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the conveyance, sale, transfer or lease 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;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 9.2, and shall cause
to be provided to all Holders in accordance with Section 1.6, at least 20 days
(or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options 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, rights, options or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, conveyance,
transfer, sale, lease, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such
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reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up. Neither the failure to give such notice
or the notice referred to in the following paragraph nor any defect therein
shall affect the legality or validity of the proceedings described in clauses
(a) through (d) of this Section 11.6. If at the time the Trustee shall not be
the Conversion Agent, a copy of such notice shall also forthwith be filed by the
Company with the Trustee.
The Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section 9.2,
and shall cause to be provided to all Holders in accordance with Section 1.6,
notice of any tender offer by the Company or any Subsidiary for all or any
portion of the Common Stock at or about the time that such notice of tender
offer is provided to the public generally.
SECTION 11.7. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all Outstanding Securities.
SECTION 11.8. Taxes on Conversions.
Except as provided in the next sentence, the Company will pay any
and all taxes and duties that may be payable in respect of the issue or delivery
of shares of Common Stock on conversion of Securities pursuant hereto. The
Company shall not, however, be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issue and delivery of shares
of Common Stock in a name other than that of the Holder of the Security or
Securities to be converted, and no such issue or delivery shall be made unless
and until the Person requesting such issue has paid to the Company the amount of
any such tax or duty, or has established to the satisfaction of the Company that
such tax or duty has been paid.
SECTION 11.9. Covenant as to Common Stock.
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The Company agrees that all shares of Common Stock which may be
delivered upon conversion of Securities, upon such delivery, will be newly
issued shares and will have been duly authorized and validly issued and will be
fully paid and nonassessable and, except as provided in Section 11.8, the
Company will pay all taxes, liens and charges with respect to the issue thereof.
SECTION 11.10. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee or its agent to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 3.9.
SECTION 11.11. Provision in Case of Consolidation, Merger or Sale of Assets.
In case of any consolidation or merger of the Company with or into
any other Person, any merger of another Person with or into the Company (other
than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any conveyance, sale, transfer or lease of all or substantially all of the
assets of the Company, 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 providing that the Holder of
each Security then Outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in Section 11.1, to
convert such Security only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer or lease by a holder of the number of shares of Common Stock of the
Company into which such Security might have been converted immediately prior to
such consolidation, merger, conveyance, sale, transfer or lease, assuming such
holder of Common Stock of the Company (i) is not a Person with which the Company
consolidated or merged with or into or which merged into or with the Company or
to which such conveyance, sale, transfer or lease was made, as the case may be
("Constituent Person"), or an Affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable
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upon such consolidation, merger, conveyance, sale, transfer or lease (provided
that if the kind or amount of securities, cash and other property receivable
upon such consolidation, merger, conveyance, sale, transfer, or lease is not the
same for each share of Common Stock of the Company held immediately prior to
such consolidation, merger, conveyance, sale, transfer or lease by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 11.11 the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, sale, transfer
or lease by the holders of 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 adjustments which, for
events subsequent to the effective date of such supplemental indenture, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article. The above provisions of this Section 11.11 shall similarly apply
to successive consolidations, mergers, conveyances, sales, transfers or leases.
Notice of the execution of such a supplemental indenture shall be given by the
Company to the Holder of each Security as provided in Section 1.6 promptly upon
such execution.
Neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property or cash receivable by Holders of
Securities upon the conversion of their Securities after any such consolidation,
merger, conveyance, transfer, sale or lease or to any such adjustment, but may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, an Officers Certificate or an Opinion of
Counsel with respect thereto, which the Company shall cause to be furnished to
the Trustee upon request.
SECTION 11.12. Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 6.1, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any
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adjustment of the Conversion Rate, or with respect to the nature or extent 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, or
whether a supplemental indenture need be entered into. Neither the Trustee,
subject to the provisions of Section 6.1, nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind or amount) of any
Common Stock, or of any other securities or property or cash, which may at any
time be issued or delivered upon the conversion of any Security; and it or they
do not make any representation with respect thereto. Neither the Trustee,
subject to the provisions of Section 6.1, nor any Conversion Agent shall be
responsible for any failure of the Company to make or calculate any cash payment
or to issue, transfer or deliver any shares of Common Stock or share
certificates or other securities or property or cash upon the surrender of any
Security for the purpose of conversion; and the Trustee, subject to the
provisions of Section 6.1, and any Conversion Agent shall not be responsible for
any failure of the Company to comply with any of the covenants of the Company
contained in this Article.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
SECTION 12.1. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security,
by his acceptance thereof, likewise covenants and agrees, that, to the extent
and in the manner hereinafter set forth in this Article (subject to the
provisions of Article Four), the indebtedness represented by the Securities and
the payment of the principal of (and premium, if any) and interest on, and any
payment of the Repurchase Price with respect to, each and all of the Securities
are hereby expressly made subordinate and subject in right of payment to the
prior payment in full of all Senior Debt.
SECTION 12.2. No Payments in Certain Circumstances; Payment Over of Proceeds
Upon Dissolution, Etc.
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No payment on account of principal of, premium, if any, or
interest on, or redemption or repurchase of, the Securities or any coupons
appertaining thereto shall be made if, at the time of such payment or
immediately after giving effect thereto: (i) a default in the payment of
principal, premium, if any, or interest or other amounts due on any Senior Debt,
including any default under any redemption or repurchase obligation, occurs and
is continuing (or, in the case of Senior Debt 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 Debt),
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 Designated
Senior Debt occurs and is continuing that then permits holders of such
Designated Senior Debt to accelerate its maturity and the Trustee receives a
notice of the default (a "Payment Blockage Notice") from a Person who may give
it pursuant to Sections 12.5 and 12.6 hereof. Notwithstanding the foregoing, the
Company may make, and the Trustee may receive and shall apply, any payment in
respect of the Securities (for principal, premium, if any, or interest or
repurchase) if such payment was made prior to the occurrence of any of the
contingencies specified in clauses (i) and (ii) above.
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 effectiveness of the immediately prior Payment Blockage
Notice, and (B) all scheduled payments of principal, premium, if any, and
interest on the Securities 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 Securities upon the earlier of: (i) the date upon which the
default is cured or waived, or (ii) in the case of a default referred to in
clause (ii) of the second preceding paragraph, 179 days pass after notice is
received if the maturity of such Designated Senior Debt has not been
accelerated, unless this Article otherwise
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prohibits the payment or distribution at the time of such payment or
distribution.
Upon (i) any acceleration of the principal amount due on the
Securities or (ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any dissolution, winding up or total or partial liquidation or reorganization of
the Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, premium, if any, sinking
fund and interest or other amounts due or to become due upon all Senior Debt
shall first be paid in full, or payment thereof provided for in money or money's
worth in accordance with its terms, before any payment is made on account of the
principal of, premium, if any, or interest on, or repurchase of, the
indebtedness evidenced by the Securities or any coupon appertaining thereto, and
upon any such dissolution or winding up or liquidation or reorganization any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Securities
or any coupons appertaining thereto or the Trustee under this Indenture would be
entitled, except for the provisions hereof, shall 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 Securities or any
coupons appertaining thereto or by the Trustee under this Indenture if received
by them or it, as the case may be, directly to the holders of Senior Debt (pro
rata to each such holder on the basis of the respective amounts of Senior Debt
held by such holder) or their representatives, to the extent necessary to pay
all Senior Debt in full, in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt, before
any payment or distribution is made to the Holders of the Securities or any
coupons appertaining thereto or to the Trustee under this Indenture.
In the event that, contrary to the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or the Holders of the
Securities before all Senior Debt is paid in full or provision made for such
payment, in accordance with its terms, such payment or distribution shall be
paid over or delivered to, the holders
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of such Senior Debt or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Debt have been issued, as their respective
interests may appear, for application to the payment of all Senior Debt
remaining unpaid to the extent necessary to pay all such Senior Debt in full in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Debt.
Subject to the payment in full of all Senior Debt, the Holders of
the Securities and any coupons (together with the holders of any other
indebtedness of the Company which is subordinated in right of payment to the
payment in full of all Senior Debt, which is not subordinated in right of
payment to the Securities and which by its terms grants such right of
subrogation to the holders thereof) shall be subrogated to the rights of the
holders of Senior Debt to receive payments or distribution of assets of the
Company made on the Senior Debt until the principal of, premium, if any, and
interest on, or amounts payable upon repurchase of, the Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or distributions
to the holders of Senior Debt of any cash, property or securities to which the
Holders of the Securities and any coupons appertaining thereto or the Trustee
would be entitled except for the provisions of this Article, and no payment over
pursuant to the provisions of this Article to the holders of Senior Debt by the
Holders of the Securities or any coupon or the Trustee, shall, as between the
Company, its creditors other than the holders of Senior Debt, and the Holders of
Securities and coupons, be deemed to be a payment by the Company to the holders
of or on account of Senior Debt, it being understood that the provisions of this
Article are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities and coupons, on the one hand, and the
holders of Senior Debt, on the other hand.
SECTION 12.3. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
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SECTION 12.4. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt 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 of any Senior
Debt, or by any non-compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Debt, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Debt, or otherwise amend or supplement in any manner Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
SECTION 12.5. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article 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 to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee, agent or representative
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of
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Section 6.1, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 12.5 prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest on
any Security), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within two
Business Days prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee, agent or
representative therefor) to establish that such notice has been given by a
holder of Senior Debt (or a trustee, agent or representative therefor). In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt 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, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 12.6. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 6.1, and
the Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered
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to the Trustee or to the Holders of Securities, for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the holders
of the Senior Debt and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 12.7. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such holders if it shall
in good faith mistakenly pay over or distribute to Holders of Securities or to
the Company or to any other Person cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article or otherwise.
With respect to the holders of Senior Debt, the Trustee undertakes to perform or
to observe only such of its covenants or obligations as are specifically set
forth in this Article Twelve, and no implied covenants or obligations with
respect to holders of Senior Debt shall be read into this Indenture against the
Trustee.
SECTION 12.8. Reliance by Holders of Senior Debt on Subordination Provisions.
Each Holder by accepting a Security acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Debt, whether such
Senior Debt was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Debt and such holder of Senior Debt shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.
SECTION 12.9. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article with respect to any Senior Debt which may
at any time be held by it, to the same extent as any other holder of Senior
Debt,
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and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7.
SECTION 12.10. Article Applicable to Paying Agents.
In case 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 in such case (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 Section 12.9 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 12.11. Certain Conversions and Repurchases Deemed Payment.
For the purposes of this Article only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance with
Article Eleven or upon the repurchase of Securities in accordance with Article
Thirteen shall not be deemed to constitute a payment or distribution on account
of the principal of or premium or interest on Securities or on account of the
purchase or other acquisition of Securities, and (2) the payment, issuance or
delivery of cash, property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section, the term "junior
securities" means (a) shares of any stock of any class of the Company and any
cash, property or securities into which the Securities are convertible pursuant
to Article Eleven and (b) securities of the Company which are subordinated in
right of payment to all Senior Debt 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 Securities are so subordinated as provided in this
Article. Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Company, its
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creditors other than holders of Senior Debt and the Holders of the Securities,
the right, which is absolute and unconditional, of the Holder of any Security to
convert such Security in accordance with Article Eleven or to exchange such
Security for Common Stock in accordance with Article Thirteen if the Company
elects to satisfy the obligations under Article Thirteen by the delivery of
Common Stock.
ARTICLE THIRTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 13.1. Right to Require Repurchase.
In the event that a Change in Control (as hereinafter defined)
shall occur, then each Holder shall have the right, at the Holder's option, but
subject to the provisions of Section 13.2, to require the Company to repurchase,
and upon the exercise of such right the Company shall repurchase, all of such
Holder's Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to U.S.$5,000 or any greater integral
multiple of U.S.$1,000, on the date (the "Repurchase Date") that is 45 days
after the date of the Company Notice (as defined in Section 13.3) at a purchase
price equal to 100% of the principal amount of the Securities to be repurchased
plus interest accrued to the Repurchase Date (the "Repurchase Price"); provided,
however, that installments of interest on Securities whose Stated Maturity is on
or prior to the Repurchase Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the
relevant Record Date according to their terms and the provisions of Section 3.7.
Such right to require the repurchase of the Securities shall not continue after
a discharge of the Company from its obligations with respect to the Securities
in accordance with Article Four, unless a Change in Control shall have occurred
prior to such discharge. At the option of the Company, the Repurchase Price may
be paid in cash or, subject to the fulfillment by the Company of the conditions
set forth Section 13.2, by delivery of shares of Common Stock having a fair
market value equal to the Repurchase Price. Whenever in this Indenture
(including Sections 2.2, 3.1, 5.1(1) and 5.8) there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the
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Repurchase Price payable in respect of such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Indenture shall not be
construed as excluding the Repurchase Price in those provisions of this
Indenture when such express mention is not made; provided, however, that for the
purposes of Article Twelve such reference shall be deemed to include reference
to the Repurchase Price only to the extent the Repurchase Price is payable in
cash.
SECTION 13.2. Conditions to the Company's Election to Pay the Repurchase Price
in Common Stock.
The Company may elect to pay the Repurchase Price by delivery of shares
of Common Stock pursuant to Section 13.1 if and only if the following conditions
shall have been satisfied:
(a) The shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the Repurchase Date of not
less than the Repurchase Price. For purposes of Section 13.1 and this Section
13.2, the fair market value of shares of Common Stock shall be determined by the
Company and shall be equal to 95% of the average of the Closing Price Per Share
for the five consecutive Trading Days immediately preceding and including the
third Trading Day prior to the Repurchase Date;
(b) As to each Holder, the Repurchase Price shall be paid only in
cash in the event any shares of Common Stock to be issued upon repurchase of
Securities hereunder (i) require registration under any federal securities law
before such shares may be freely transferrable without being subject to any
transfer restrictions under the Securities Act upon repurchase and if such
registration is not completed or does not become effective prior to the
Repurchase Date, and/or (ii) require registration with or approval of any
governmental authority under any state law or any other federal law before such
shares may be validly issued or delivered upon repurchase and if such
registration is not completed or does not become effective or such approval is
not obtained prior to the Repurchase Date;
(c) Payment of the Repurchase Price may not be made in Common
Stock unless such stock is, or shall have
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been, approved for listing on the New York Stock Exchange or listed or quoted on
a national securities exchange or quotation system, in either case, prior to the
Repurchase Date; and
(d) All shares of Common Stock which may be issued upon repurchase
of Securities will be issued out of the Company's authorized but unissued Common
Stock and, will upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 13.2 are not
satisfied in accordance with the terms thereof, the Repurchase Price shall be
paid by the Company only in cash.
SECTION 13.3. Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for
redemption all of the Outstanding Securities, on or before the 30th day after
the occurrence of a Change in Control, the Company or, at the request and
expense of the Company on or before the 30th day after such occurrence, the
Trustee, shall give to all Holders of Securities, in the manner provided in
Section 1.6, notice (the "Company Notice") of the occurrence of the Change of
Control and of the repurchase right set forth herein arising as a result
thereof. The Company shall also deliver a copy of such notice of a repurchase
right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and whether the Repurchase Price shall
be paid by the Company in cash or by delivery of shares of Common Stock,
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right, and the place or places where such
Securities, are to be surrendered for payment of the Repurchase Price
and accrued interest, if any,
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(5) that on the Repurchase Date the Repurchase Price, and accrued
interest, if any, will become due and payable upon each such Security
designated by the Holder to be repurchased, and that interest thereon
shall cease to accrue on and after said date,
(6) the Conversion Rate then in effect, the date on which the
right to convert the principal amount of the Securities to be
repurchased will terminate and the place or places where such Securities
may be surrendered for conversion,
(7) the place or places that the Notice of Election of Holder To
Require Repurchase as provided in Section 2.2 shall be delivered, and
the form of such Notice, and
(8) the Cusip number or numbers of such Securities.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this
Article Thirteen are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee on or before the 30th day after the date of the Company Notice (i)
written notice of the Holder's exercise of such right, which notice shall set
forth the name of the Holder, the principal amount of the Securities to be
repurchased (and, if any Security is to repurchased in part, the serial number
thereof, the portion of the principal amount thereof to be repurchased and the
name of the Person in which the portion thereof to remain Outstanding after such
repurchase is to be registered) and a statement that an election to exercise the
repurchase right is being made thereby, and, in the event that the Repurchase
Price shall be paid in shares of Common Stock, the name or names (with
addresses) in which the certificate or certificates for shares of Common Stock
shall be issued, and (ii) the Securities with respect to which the repurchase
right is being exercised. Such written notice shall be
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irrevocable, except that the right of the Holder to convert the Securities with
respect to which the repurchase right is being exercised shall continue until
the close of business on the Repurchase Date.
(c) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid to
the Trustee the Repurchase Price in cash or shares of Common Stock, as provided
above, for payment to the Holder on the Repurchase Date or, if shares of Common
Stock are to be paid, as promptly after the Repurchase Date as practicable,
together with accrued and unpaid interest to the Repurchase Date payable with
respect to the Securities as to which the purchase right has been exercised;
provided, however, that installments of interest that mature on or prior to the
Repurchase Date shall be payable in cash to the Holders of such Securities, or
one or more Predecessor Securities, registered as such at the close of business
on the relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for
repurchase shall not be so paid on the Repurchase Date, the principal amount of
such Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate of 5.00% per annum, and each Security shall remain convertible into
Common Stock until the principal of such Security (or portion thereof, as the
case may be) shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the
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Repurchase Date and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
repurchase shall be deemed to have become on the Repurchase Date the holder or
holders of record of the shares represented thereby; provided, however, that any
surrender for repurchase on a date when the stock transfer books of the Company
shall be closed shall constitute the Person or Persons in whose name or names
the certificate or certificates for such shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding day on which such stock transfer books are open. No payment or
adjustment shall be made for dividends or distributions on any Common Stock
issued upon repurchase of any Security declared prior to the Repurchase Date.
(g) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same Holder
and the Repurchase Price shall be payable in shares of Common Stock, the number
of full shares which shall be issuable upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Securities so repurchased.
Instead of any fractional share of Common Stock which would otherwise be
issuable on the repurchase of any Security or Securities, the Company will
deliver to the applicable Holder its check for the current market value of such
fractional share. The current market value of a fraction of a share is
determined by multiplying the current market price of a full share by the
fraction, and rounding the result to the nearest cent. For purposes of this
Section, the current market price of a share of Common Stock is the Closing
Price Per Share of the Common Stock on the Trading Day immediately preceding the
Repurchase Date.
(h) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock in a name other than that of the Holder of the
Securities being repurchased, and no such issuance or delivery shall be made
unless and until
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the Person requesting such issuance or delivery has paid to the Company the
amount of any such tax or duty or has established, to the satisfaction of the
Company, that such tax or duty has been paid.
(i) All Securities delivered for repurchase shall be delivered to
the Trustee to be canceled at the direction of the Trustee, which shall dispose
of the same as provided in Section 3.9.
SECTION 13.4. Certain Definitions.
For purposes of this Article Thirteen,
(a) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3, as in effect on the date of the original execution of this
Indenture, promulgated by the Commission pursuant to the Exchange Act;
(b) a "Change in Control" shall be deemed to have occurred at the
time, after the original issuance of the Securities, of:
(i) the acquisition by any person of beneficial ownership,
directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of
shares of capital stock of the Company entitling such
person to exercise 50% or more of the total voting power of
all shares of capital stock of the Company entitled to vote
generally in the elections of directors (any shares of
voting stock of which such person or group is the
beneficial owner that are not then outstanding being deemed
outstanding for purposes of calculating such percentage),
other than any such acquisition by the Company, any
Subsidiary of the Company or any employee benefit plan of
the Company existing on the date of this Indenture; or
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(ii) any consolidation or merger of the Company with or into any
other person, or any merger of another person with or into
the Company(other than (a) any such transaction (x) which
does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common
Stock and (y) pursuant to which holders of Common Stock
immediately prior to such transaction have the entitlement
to exercise, directly or indirectly, 50% or more of the
total voting power of all shares of capital stock entitled
to vote generally in the election of directors of the
continuing or surviving person immediately after such
transaction and (b) any merger which is effected solely to
change the jurisdiction of incorporation of the Company and
results in a reclassification, conversion or exchange of
outstanding shares of Common Stock into solely shares of
common stock); or
(iii) any conveyance, transfer, sale, lease or similar
disposition of all or substantially all of the Company's
assets to another person;
provided, however, that a Change in Control shall not be deemed to have occurred
if the Closing Price Per Share on any five Trading Days within the period of 10
consecutive Trading Days ending immediately after the later of the date of the
Change in Control or the date of the public announcement of the Change in
Control (in the case of a Change in Control under Clause (i) above) or the
period of 10 consecutive Trading Days ending immediately prior to the date of
the Change in Control (in the case of a Change in Control under Clause (ii)
above) shall equal or exceed 105% of the Conversion Price of the Securities in
effect on each such Trading Day;
(c) the term "Conversion Price" shall equal U.S.$1,000 divided by
the Conversion Rate; and
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(d) for purposes of Section 13.4(b)(i), the term "person" shall
include any syndicate or group which would be deemed to be a "person" under
Section 13(d)(3) of the Exchange Act, as in effect on the date of the original
execution of this Indenture.
ARTICLE FOURTEEN
HOLDERS LISTS AND REPORTS
BY TRUSTEE AND COMPANY; NON-RECOURSE
SECTION 14.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after the Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities as of such Regular
Record Date, and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 14.2. Preservation of Information.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 14.1 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 14.1 upon receipt of a new list so furnished.
(b) After this Indenture has been qualified under the Trust
Indenture Act, the rights of Holders to
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communicate with other Holders with respect to their rights under this Indenture
or under the Securities, and the corresponding rights and duties of the Trustee,
shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
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 made pursuant to
the Trust Indenture Act.
SECTION 14.3. No Recourse Against Others.
An incorporator or any past, present or future director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. Such waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 14.4. Reports by Trustee.
(a) After this Indenture has been qualified under the Trust
Indenture Act, the Trustee shall transmit to Holders such reports 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. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
sixty days after each July 15 following the date of this Indenture, deliver to
Holders a brief report, dated as of such July 15, which complies with the
provisions of such Section 313(a).
(b) After this Indenture has been qualified under the Trust
Indenture Act, a copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will promptly notify the Trustee when the Securities are listed on any
stock exchange.
SECTION 14.5. Reports by Company.
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After this Indenture has been qualified under the Trust Indenture
Act, the Company shall file with the Trustee and the Commission, and transmit to
Holders, 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.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt thereof shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
---------------------
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, all as of the day and year first above written.
COR THERAPEUTICS, INC.
By /s/ PETER S. RODDY
------------------------------------
Name: Peter S. Roddy
Title: Vice President, Finance
FIRSTAR BANK, N.A., Trustee
By /s/ FRANK P. LESLIE
------------------------------------
Name: Frank P. Leslie
Title: Vice President
<PAGE> 1
Exhibit 10.1
COR THERAPEUTICS, INC.
5.00% CONVERTIBLE SUBORDINATED NOTES DUE MARCH 1, 2007
------------------
PURCHASE AGREEMENT
February 17, 2000
Goldman, Sachs & Co.,
Chase H&Q, A Division of Chase Securities Inc.,
CIBC World Markets Corp.,
FleetBoston Robertson Stephens Inc.,
Warburg Dillon Read LLC,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
COR Therapeutics, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$250,000,000 principal amount of the Convertible Subordinated Notes specified
above, convertible into common stock, par value $0.001 ("Stock"), of the Company
(the "Firm Securities") and, at the election of the Purchasers, up to an
aggregate of $50,000,000 additional aggregate principal amount of such Notes
(the "Optional Securities"). The Firm Securities and the Optional Securities
which the Purchasers elect to purchase pursuant to Section 2 hereof are herein
collectively called the "Securities".
The Purchasers and other holders (including subsequent transferees) of
Securities in registered form without coupons will be entitled to the benefits
of the registration rights agreement, to be dated as of the First Time of
Delivery (as defined in Section 4) (the "Registration Rights Agreement"), by and
among the Company and the Purchasers, in the form attached hereto as Exhibit A.
Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein a shelf registration statement (the
"Registration Statement") pursuant to Rule 415 under the Securities Act of 1933,
as amended (the "Securities Act"), relating to the resale of the Securities and
shares of Stock initially issuable upon conversion of the Securities by holders
thereof, and to use its reasonable efforts to cause such shelf registration
statement to be declared effective as provided therein.
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
<PAGE> 2
(a) (i) An offering circular, dated February 17, 2000 (the
"Offering Circular"), has been prepared in connection with the offering
of the Securities and the shares of Stock issuable upon conversion
thereof. Any reference to the Offering Circular shall be deemed to refer
to and include the Company's most recent Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 and Quarterly Report on Form
10-Q for the quarter ended September 30, 1999, which are attached to and
made a part of the Offering Circular, and all subsequent documents filed
by the Company with the Commission pursuant to Section 13(a), 13(c) or
15(d) of the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on or prior to the date of the Offering Circular,
and any reference to the Offering Circular, as amended or supplemented,
as of any specified date, shall be deemed to include (i) any documents
filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of
the Exchange Act after the date of the Offering Circular and prior to
such specified date and (ii) any Additional Issuer Information (as
defined in Section 5(f)) furnished by the Company prior to the
completion of the distribution of the Securities; and all documents
filed under the Exchange Act and so deemed to be included the Offering
Circular or any amendment or supplement thereto are hereinafter called
the "Exchange Act Reports". The Offering Circular and any amendments or
supplements thereto did not and will not, as of their respective dates,
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by a Purchaser
through Goldman, Sachs & Co. expressly for use therein;
(ii) The Exchange Act Reports, when they were or are filed
with the Commission, conformed or will conform in all material respects
to the applicable requirements of the Exchange Act and the applicable
rules and regulations of the Commission thereunder, and the Exchange Act
Reports did not and will not, as of their respective dates, contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(iii) The information provided by the Company pursuant to
Section 5(f) will not, at the date thereof, contain any untrue statement
of a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(b) The Company has not sustained since the date of the latest
audited financial statements included in the Offering Circular any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering Circular;
and, since the respective dates as of which information is given in the
Offering Circular, there has not been any decrease in the capital stock
or increase in long-term debt in excess of $1 million of the Company or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
2
<PAGE> 3
operations of the Company, otherwise than as set forth or contemplated
in the Offering Circular;
(c) The Company has good and marketable title to all material
personal property owned by it, free and clear of all liens, encumbrances
and defects except such as are described in the Offering Circular or
such as do not interfere with the use made and proposed to be made of
such property by the Company; and any real property and buildings held
under lease by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company; the Company owns no real property;
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own or lease its
properties and conduct its business as described in the Offering
Circular, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; the Company has no subsidiaries;
(e) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; the shares of Stock initially issuable
upon conversion of the Securities have been duly and validly authorized
and reserved for issuance and, when issued and delivered in accordance
with the provisions of the Securities and the Indenture (as defined in
Section I(f)), will be duly and validly issued, fully paid and
non-assessable and will conform to the description of the Stock
contained in the Offering Circular;
(f) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company enforceable in accordance
with their terms and entitled to the benefits provided by the indenture
to be dated as of February 24, 2000 (the "Indenture") between the
Company and Firstar Bank, as Trustee (the "Trustee"), under which they
are to be issued, which will be substantially in the form previously
delivered to you; the Indenture has been duly authorized and, when
executed and delivered by the Company and the Trustee, the Indenture
will constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Securities and the Indenture will conform to the
descriptions thereof in the Offering Circular and will be in
substantially the form previously delivered to you;
(g) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated thereunder,
3
<PAGE> 4
including, without limitation, Regulations G, T, U, and X of the Board
of Governors of the Federal Reserve System;
(h) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might reasonably have been expected to cause or
result in stabilization or manipulation of the price of any security of
the Company in connection with the offering of the Securities;
(i) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the
Registration Rights Agreement, the Indenture and this Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Company or, except
as to any violations which would not have a Material Adverse Effect (as
defined below), any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Registration Rights Agreement or the
Indenture, except (i) as required pursuant to the Registration Rights
Agreement, (ii) for the approval of the Stock issuable upon conversion
of the Securities for quotation on the Nasdaq National Market, and,
(iii) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Purchasers;
(j) The Company is not in violation of its Certificate of
Incorporation or By-laws or in default in the performance or observance
of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, material lease or
other material agreement or instrument to which it is a party or by
which it or any of its properties may be bound;
(k) The statements set forth in the Offering Circular under the
captions "Description of the Notes" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, and under the caption "Underwriting", insofar
as they purport to describe the provisions of the documents referred to
therein, accurately and fairly present in all material respects such
matters and documents (to the same extent as would be required if the
Offering Circular were a prospectus included in a Registration Statement
of the Company on Form S-1 under the Securities Act);
(l) Other than as set forth in the Offering Circular, there are
no legal or governmental proceedings pending to which the Company is a
party or of which any property of the Company is the subject which, if
determined adversely to the Company, would individually or in the
aggregate have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company or on the
ability of the Company to consummate the
4
<PAGE> 5
transactions contemplated herein (a "Material Adverse Effect"); and, to
the Company's knowledge, no such proceedings are threatened by
governmental authorities or by others;
(m) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are
listed on a national securities exchange registered under Section 6 of
the Exchange Act or quoted in a U.S. automated inter-dealer quotation
system;
(n) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(o) The Company is not, and after giving effect to the offering
and sale of the Securities, will not be, an "investment company", as
such term is defined in the United States Investment Company Act of
1940, as amended (the "Investment Company Act");
(p) Neither the Company, nor any person acting on its behalf has
offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the
Securities Act (except that no representation or warranty is made with
respect to the Purchasers or any persons acting on their behalf);
(q) Within the preceding six months, neither the Company nor any
other person acting on behalf of the Company has offered or sold to any
person any Securities, or any securities of the same or a similar class
as the Securities, other than Securities offered or sold to the
Purchasers hereunder. The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Securities Act) of any Securities or any substantially similar security
issued by the Company, within six months subsequent to the date on which
the distribution of the Securities has been completed (as notified to
the Company by Goldman, Sachs & Co.), is made under restrictions and
other circumstances reasonably designed not to affect the status of the
offer and sale of the Securities in the United States and to U.S.
persons contemplated by this Agreement as transactions exempt from the
registration provisions of the Securities Act (except that no
representation or warranty is made with respect to the Purchasers or any
persons acting on their behalf);
(r) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Purchasers, or in connection with the
initial resale of the Securities by the Purchasers in accordance with
this Agreement, to register the Securities under the Securities Act or
to qualify an indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act");
(s) The Securities have been designated PORTAL eligible
securities in accordance with the rules and regulations of the National
Association of Securities Dealers, Inc.;
(t) The Company has all requisite corporate power to enter into
this Agreement and the Registration Rights Agreement. This Agreement has
been and, as of the First Time of Delivery (as defined below), the
Registration Rights Agreement will have been, duly authorized, executed
and delivered by the Company and upon such execution by the Company
(assuming the due authorization, execution and delivery of such
agreements by the
5
<PAGE> 6
other parties thereto) this Agreement and the Registration Rights
Agreement will constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with the terms
hereof or thereof, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles, and except as the enforcement of indemnification and
contribution provisions hereof and thereof may be limited by applicable
law;
(u) Except as disclosed in the Offering Circular, there are no
persons with registration rights or other similar rights to have any
securities of the Company (other than the Securities and the shares of
Stock issuable upon conversion thereof) registered under any Securities
Act registration statement;
(v) None of the holders of outstanding shares of capital stock of
the Company and no other person has or will have any preemptive or other
rights to purchase, subscribe for or otherwise acquire (i) the shares of
Stock to be issued upon conversion of the Securities or any rights to
such shares (other than those granted by the holders of the Securities)
or (ii) as a result of or in connection with the transactions
contemplated by the Indenture, this Agreement or the Registration Rights
Agreement, any other capital stock of the Company or rights thereto;
(w) The Company's directors and executive officers, in each case
as listed on Exhibit B-1, have entered into a written agreement with the
Company in the form of Exhibit B hereto (each such agreement, a "Lock-up
Agreement"), and executed originals of each Lock-up Agreement have been
delivered to you;
(x) To the Company's knowledge, Ernst & Young LLP, who have
certified certain financial statements of the Company, are independent
public accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder;
(y) The Company has reviewed its operations and its interfaces
with third-party systems to evaluate the extent to which the business or
operations of the Company will be affected by the Year 2000 Problem. As
a result of such review, the Company represents and warrants that the
disclosure in the Offering Circular relating to the Year 2000 Problem is
accurate and complies in all material respects with the rules and
regulations under the Securities Act (to the same extent as would be
required if the Offering Circular were a prospectus included in a
Registration Statement of the Company on Form S-1 under the Securities
Act). The "Year 2000 Problem" as used herein means any significant risk
that computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1, 2000;
(z) (i) The Company owns, or possesses adequate rights to use,
all material trademarks, service marks, trade names, trademark
registrations, service mark registrations, domain names and copyrights
necessary for the conduct of its business and, except as set
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forth in the Offering Circular, has not received any notice of any claim
of conflict with any such rights of others except as would not have a
Material Adverse Effect; and (ii) to the Company's knowledge, the
Company has not infringed and is not infringing any trademarks, service
marks, trade names, trademark registrations, service mark registrations,
domain names or copyrights, which infringement could reasonably be
expected to result in any Material Adverse Effect;
(aa) (i) The Company owns or possesses adequate rights to use,
all material patents necessary for the conduct of its business; (ii) to
the Company's knowledge, no valid United States patent is or would be
infringed by the activities of the Company, except as would not have a
Material Adverse Effect; (iii) except as set forth in the Offering
Circular, there are no actions, suits or judicial proceedings pending
relating to patents or proprietary information to which the Company is a
party or of which any property of the Company is subject, and, to the
knowledge of the Company, no actions, suits or judicial proceedings are
threatened in writing by governmental authorities or others, in each
case except as would not result in any Material Adverse Effect; and (iv)
except as set forth in the Offering Circular or as would not result in
any Material Adverse Effect, the Company has not been notified in
writing that the Company is infringing or otherwise violating the
patents or other intellectual property of others and is not aware of any
rights of third parties to any of the Company's material patent
applications, license patents or licenses that in any case could affect
materially the use thereof by the Company;
(bb) The Company carries, or is covered by, insurance as is
customary for companies similarly situated and engaged in similar
businesses in similar industries;
(cc) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be expected
to have a Material Adverse Effect; and
(dd) The Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of
toxic substances and protection of health or the environment
("Environmental Laws") which are applicable to its business except for
failure to comply which would not have a Material Adverse Effect. The
Company has received no written notice from any governmental authority
or third party of an asserted claim under Environmental Laws, which
claim is required to be disclosed in the Offering Circular. To its
knowledge, the Company has not conducted any activity which would
require it to make material capital expenditures to comply with
Environmental Laws. No property which is owned, leased or occupied by
the Company has been designated a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. ss. 9601, et seq.), or otherwise designated as a
contaminated site (which designation as a contaminated site would be
expected to be material to the Company) under applicable state or local
law.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 96.5% of the principal amount thereof, plus accrued interest, if any,
from February 24, 2000 to the First Time of Delivery hereunder, the principal
amount of Firm Securities set forth opposite the name of such Purchaser in
Schedule I hereto, and
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<PAGE> 8
(b) in the event and to the extent that you shall exercise the election to
purchase Optional Securities as provided below, the Company agrees to issue and
sell to each of the Purchasers, and each of the Purchasers agrees, severally and
not jointly, to purchase from the Company, at the same purchase price set forth
in clause (a) of this Section 2, the aggregate principal amount of the Optional
Securities as to which such election shall have been exercised (to be adjusted
by you so as to eliminate denominations of less than U.S.$1,000) determined by
multiplying such aggregate principal amount of Optional Securities by a
fraction, the numerator of which is the maximum aggregate principal amount of
Optional Securities which such Purchaser is entitled to purchase as set forth
opposite the name of such Purchaser in Schedule I hereto and the denominator of
which is the maximum aggregate principal amount of Optional Securities which all
of the Purchasers are entitled to purchase hereunder.
The Company hereby grants to the Purchasers the right to purchase at
their election up to $50,000,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (a) of the first paragraph
of this Section 2, for the sole purpose of covering sales of Securities in
excess of the number of Firm Securities. Any such election to purchase Optional
Securities may be exercised by written notice from you to the Company, given
within a period of 30 calendar days after the date of this Agreement, setting
forth the aggregate principal amount of Optional Securities to be purchased and
the date on which such Optional Securities are to be delivered, as determined by
you but in no event earlier than the First Time of Delivery or, unless you and
the Company otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Securities Act in transactions meeting the
requirements of Rule 144A;
(b) It is an institution that is an "accredited investor" within the
meaning of Rule 501 under the Securities Act; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Securities Act.
4. (a) The Securities will be represented by one or more definitive
global Securities in book-entry form which will be deposited by or on behalf of
the Company with The Depository Trust Company ("DTC") or its designated
custodian. The Company will deliver the Securities to the Purchasers, against
payment by the Purchasers of the purchase price therefor by wire transfer to the
Company of Federal (same day) funds, by causing DTC to credit the Securities to
the account of the Purchasers at DTC. The Company will cause the certificates
representing the Securities to be made available to the Purchasers for checking
at least twenty-four hours prior to the Time of Delivery (as defined below) at
the office of DTC or its designated custodian (the "Designated Office"). The
time and date of such delivery and payment shall be, with respect to Firm
Securities, 7:00 a.m., San
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Francisco time, on February 24, 2000 or such other time and date as the
Purchasers and the Company may agree upon in writing and, with respect to the
Optional Securities, 7:00 a.m. San Francisco time, on the date specified by the
Purchasers in the written notice given by the Purchasers of the Purchasers'
election to purchase such Optional Securities, or such other time and date as
the Purchasers and the Company may agree upon in writing. Such time and date for
delivery of the Firm Securities is herein called the "First Time of Delivery",
such time and date for delivery of the Optional Securities, if not the First
Time of Delivery, is herein called the "Second Time of Delivery", and each such
time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7(j) hereof, will be delivered at such time and
date at the offices of Cooley Godward LLP, 3000 El Camino Real, Palo Alto,
California 94306 (the "Closing Location"), and the Securities will be delivered
at the Designated Office, all at the Time of Delivery. A meeting will be held at
the Closing Location at 2:00 p.m., San Francisco time, on the New York Business
Day next preceding the Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
reasonably disapproved by you promptly after reasonable notice thereof; and to
furnish you with copies thereof;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under the securities laws of
such U.S. jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such U.S. jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process or taxation in any jurisdiction;
(c) To furnish the Purchasers with four copies of the Offering Circular
and each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report in the Offering Circular, and
any amendment or supplement containing amendments to the financial statements
covered by such report, signed by the accountants, and additional copies thereof
in such quantities as you may from time to time reasonably request, and if, at
any time prior to the expiration of nine months after the date of the Offering
Circular, any event shall have occurred as a result of which the Offering
Circular as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Offering Circular is delivered, not misleading, or, if for any other
reason it shall be necessary or desirable during such same period to amend or
supplement the Offering Circular, to notify you and upon your request to prepare
and furnish without charge to each Purchaser and to any
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<PAGE> 10
dealer in securities as many copies as you may from time to time reasonably
request of an amended Offering Circular or a supplement to the Offering Circular
which will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date of the Offering Circular
and continuing until the date 90 days after the date of the Offering Circular,
not to offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Company that are substantially similar to the
Securities or the Stock, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to receive,
Stock or any such substantially similar securities other than (i) pursuant to
employee stock option plans and employee stock purchase plans existing on, or
upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement, or upon conversion of the
Securities, (ii) as consideration for acquisitions of businesses, (iii) pursuant
to equipment or lease or facilities financing activities entered into in the
ordinary course of business, or (iv) to a strategic partner of the Company in
conjunction with an agreement involving a technical, manufacturing and/or
marketing collaboration occurring after the date of the Offering Circular,
provided that each recipient of shares pursuant to these clauses (ii) through
(iv) agrees that all such shares remain subject to restrictions substantially
similar to those contained in this subsection; and that the Company will use
reasonable efforts to cause each person who has entered into a Lock-up Agreement
to comply therewith, will not grant any waivers or consents to non-compliance
therewith and will enforce its rights under each such agreement, in each case
unless and to the extent that it shall have obtained your prior consent;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and
prospective purchasers of securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Securities Act;
(g) To use its reasonable efforts to cause the Securities to be eligible
for the PORTAL trading system of the National Association of Securities Dealers,
Inc.;
(h) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), consolidated summary financial information of the Company
and its subsidiaries for such quarter in reasonable detail;
(i) During a period of five years from the date of the Offering
Circular, provided any of the Securities are then outstanding, to furnish to you
copies of all reports or other communications (financial or other) furnished to
stockholders of the Company, and to deliver to you (i) as soon as they
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<PAGE> 11
are available, copies of any reports and financial statements furnished to or
filed with the Commission or any securities exchange on which the Securities or
any class of securities of the Company is listed, provided that any reports,
financial statements or other communications that are available by EDGAR need
not be furnished; and (ii) such additional information concerning the business
and financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission);
(j) During the period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them;
(k) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds";
(l) To reserve and keep available at all times, free of preemptive
rights, shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Stock upon conversion of the Securities; and
(m) To use its reasonable efforts to list, subject to notice of
issuance, the shares of Stock issuable upon conversion of the Securities on the
Nasdaq National Market.
6. The Company covenants and agrees with the several Purchasers that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
issue of the Securities and the shares of Stock issuable upon conversion of the
Securities and all other expenses in connection with the preparation, printing
and filing of the Offering Circular and any amendments and supplements thereto
and the mailing and delivering of copies thereof to the Purchasers and dealers;
(ii) the cost of printing or producing the Blue Sky and Legal Investment
Memoranda, if any, in connection with the offering, purchase, sale and delivery
of the Securities; (iii) all expenses in connection with the qualification of
the Securities and the shares of Stock issuable upon conversion of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Purchasers in connection with such qualification and in connection with the Blue
Sky and legal investment surveys; (iv) any fees charged by securities rating
services for rating the Securities; (v) the cost of preparing the Securities;
(vi) the fees and expenses of the Trustee and any agent of the Trustee and the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; (vii) any cost incurred in connection with the
designation of the Securities for trading in PORTAL and the listing of the
shares of Stock issuable upon conversion of the Securities on the Nasdaq
National Market; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Purchasers will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
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7. The obligations of the Purchasers hereunder, as to the Securities to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) Sullivan & Cromwell, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated such Time of Delivery, with
respect to such matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(b) Cooley Godward LLP, counsel for the Company, and Patrick Broderick,
Senior Vice President and General Counsel of the Company, shall have furnished
to you their written opinions, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
In the case of the opinion of Cooley Godward LLP:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with full corporate power and authority to own or lease its properties
and to conduct its business as described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and nonassessable; and the shares of Stock initially issuable
upon conversion of the Securities have been duly and validly authorized
and reserved for issuance and, when issued and delivered in accordance
with the provisions of the Securities and the Indenture, will be duly
and validly issued and fully paid and non-assessable, and will conform
to the description of the Stock contained in the Offering Circular under
the caption "Description of Capital Stock";
(iii) To such counsel's knowledge, the Company is duly qualified
to do business as a foreign corporation and is in good standing as a
foreign corporation authorized to do business in the State of
California;
(iv) To such counsel's knowledge and other than as set forth in
the Offering Circular, there are no legal or governmental proceedings
pending to which the Company is a party or of which any property of the
Company is subject that would be required to be described in the
Offering Circular, to the same extent as would be required if the
Offering Circular were a prospectus included in a Registration Statement
of the Company on Form S-1 under the Securities Act;
(v) This Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company;
(vi) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms and entitled to the benefits provided by the Indenture, subject,
as
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to enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Securities and the Indenture
conform to the descriptions thereof contained in the Offering Circular
under the caption "Description of the Notes" (such counsel being
entitled to rely on the opinion of Sullivan & Cromwell as to matters of
New York law);
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Trustee, constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (such counsel being entitled to rely on the
opinion of Sullivan & Cromwell as to matters of New York law);
(viii) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture,
the Registration Rights Agreement and this Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
listed by the Company as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1998, nor will such actions
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or, to such
counsel's knowledge, any rule or regulation of any governmental agency
or body having jurisdiction over the Company or any of its properties
(except for the securities or Blue Sky laws of the various states as to
which such counsel need not express any opinion) or, to such counsel's
knowledge, any order of any court entered against the Company;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body is required for
the offer and sale of the Securities or the consummation by the Company
of the transactions contemplated by this Agreement, the Registration
Rights Agreement or the Indenture, except such as may be required under
the Securities Act and blue sky laws of the various states in connection
with registration, pursuant to the Registration Rights Agreement, of the
Securities and the shares of Stock issuable upon conversion of the
Securities and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Purchasers;
(x) The statements set forth in the Offering Circular under the
captions "Description of the Notes" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, and under the captions "Certain United States
Federal Income Tax Consequences", insofar as they purport to describe
the provisions of the laws and documents referred to therein, fairly
present in all material respects such legal matters and documents (to
the same extent as would be required if the Offering Circular were a
prospectus included in a Registration Statement of the Company on Form
S-1 under the Securities Act);
(xi) No registration of the Securities or the shares of Stock
issued upon conversion of the Securities under the Securities Act, and
no qualification of an indenture under the Trust
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Indenture Act with respect to the Securities, is required for the offer
and sale by the Company and the offer and initial resale of the
Securities by the Purchasers in the manner contemplated by this
Agreement assuming (i) the accuracy of, and compliance with, the
Purchasers' representations and agreements contained in Section 3 of the
Purchase Agreement, (ii) the accuracy of the representations of the
Company set forth in Sections 1(m), 1(n), 1(p) and 1(q) of the Purchase
Agreement and (iii) the Securities are sold pursuant to the Offering
Circular;
(xii) The Company is not an "investment company", as such term is
defined in the Investment Company Act;
(xiii) To such counsel's knowledge, the Company is licensed to
use, or owns, each patent application and patent listed on Exhibit 2 to
its opinion (such exhibit to be consistent with the draft exhibit
previously furnished to Sullivan & Cromwell) (the "Patent Portfolio");
(xiv) To such counsel's knowledge, except as otherwise described
in Exhibit 2, no third party has any rights to the patent applications
and patents listed in the Patent Portfolio for the manufacture, use or
sale of Integrelin;
(xv) The Company's United States patent applications listed in
the Patent Portfolio have been prepared and filed in the United States
Patent and Trademark Office (the "USPTO") in a form and with
accompanying papers that are acceptable to the USPTO for the purposes of
according each such application a filing date and serial number, and of
placing each such application in condition for eventual examination on
the merits as to patentability. For each such United States application,
an Official Filing Receipt has been received from the USPTO. As to each
of such applications, such counsel is not aware of any material defect
of form in preparation or filing; and all United States patent
applications in the Patent Portfolio have been issued as United States
patents.
(xvi) The statements contained in the Offering Circular under the
caption "Risk Factors--If we are unable to protect our patents and
proprietary rights we may not be able to compete successfully" and in
the Form 10-K attached to the Offering Circular under the caption
"Patents, Proprietary Rights and Licenses" as they pertain to the Patent
Portfolio, insofar as such statements constitute matters of law, are a
fair and accurate summary of the matters set forth therein, to the
extent required under the Act and the applicable Rules and Regulations;
(xvii) To such counsel's knowledge, other than as set forth in
the Offering Circular, the Company has received no notice of any
infringement of, conflict with or misappropriation by a third party of
any claim for which patent applications have been filed with respect to
the Patent Portfolio or notice of any unresolved infringement of, or
conflict with or proceedings against or misappropriation by the Company
of any patents, trade secrets, trademarks, trade names, copyrights or
other proprietary rights of a third party, which, either individually or
in the aggregate, is material to the Company;
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(xviii) To such counsel's knowledge, the Company or its licensor
is the sole assignee of record for each patent application and patent
listed in the Patent Portfolio. Except as otherwise noted in the Patent
Portfolio, for each of the United States patent applications and patents
listed in the Patent Portfolio, the assignments by the named inventors
have been submitted to the USPTO and those assignments have been
recorded in the Patent Office title records; and
(xix) To such counsel's knowledge, as to each of the Company's
foreign patent applications listed in the Patent Portfolio, the
applications have either (a) except as noted in the Patent Portfolio,
been submitted to patent firms in the respective foreign countries with
instructions to file the applications in the patent offices of those
countries naming the Company as the applicant of record, or (b) as to
certain Patent Cooperation Treaty applications, been submitted directly
to the relevant receiving office naming the Company as the applicant of
record. To such counsel's knowledge and except as noted in the Patent
Portfolio, as to each of such applications, the Company has not received
notice from any foreign filing authority of any material defect of form
in preparation or filing that the Company has not cured within the
relevant cure period;
Subject to the final sentence of this paragraph, such counsel
shall also state that they have no reason to believe that the Offering
Circular and any further amendments or supplements thereto made by the
Company prior to such Time of Delivery (other than the financial
statements, including supporting schedules and other financial data
derived from accounting records and included therein, as to which such
counsel need express no opinion) contained as of its date or contains as
of such Time of Delivery an untrue statement of a material fact or
omitted or omits, as the case may be, to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Such counsel will be required to
provide the statement described in this paragraph only if counsel for
the Purchasers is concurrently providing a similar statement to the
Purchasers pursuant to Section 7(a).
The opinion of Cooley Godward LLP described in this Section 7(b)
shall be rendered to you at the request of the Company and shall so
state therein. In providing the statement with respect to the matters
covered in the last paragraph of Section 7(b), Cooley Godward LLP may
state that its statement and belief are based upon its participation in
the preparation, together with the Purchasers, Purchaser's counsel and
the Company's independent accountants, of the Offering Circular and any
amendments and supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified;
In the case of the opinion of Patrick Broderick:
(i) The Exchange Reports (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form
in all material respects with the requirements of the Exchange Act, and
the rules and regulations of the Commission thereunder; and such counsel
has no reason to believe that any of such documents, when they were so
filed, contained an
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untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading;
(c) On the date of the Offering Circular prior to the execution of this
Agreement and also at such Time of Delivery, Ernst & Young LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex I hereto;
(d) (i) The Company shall not have sustained since the date of the
latest audited financial statements included in the Offering Circular any loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Circular, and (ii) since the respective dates as of
which information is given in the Offering Circular there shall not have been
any change in the capital stock or long-term debt of the Company or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in the
Offering Circular, the effect of which, in any such case described in clause (i)
or (ii), is in your judgment so material and adverse as to make it impracticable
or inadvisable to proceed with the offering or the delivery of the Securities on
the terms and in the manner contemplated in this Agreement and in the Offering
Circular;
(e) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities;
(f) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the Nasdaq National Market; (ii)
a suspension or material limitation in trading in the Company's securities on
the Nasdaq National Market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Offering Circular;
(g) The Securities shall have been designated for trading on PORTAL;
(h) Each Lock-up Agreement shall have been duly executed and delivered
to the Company and you, and there shall have occurred no breach of any Lock-up
Agreement;
(i) The shares of Stock issuable upon conversion of the Securities shall
have been duly listed, subject to notice of issuance, on the Nasdaq National
Market; and
16
<PAGE> 17
(j) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any preliminary offering circular or
the Offering Circular, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact necessary to make the statements therein not misleading, and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by such
Purchaser in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary offering
circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through Goldman, Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary offering circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any preliminary offering circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Purchaser through
Goldman, Sachs & Co. expressly for use therein; and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its
17
<PAGE> 18
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Purchasers on the other from the offering
of the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Purchasers on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Purchasers, in each case
as set forth in the Offering Circular. The relative fault 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 Company on the one hand or the Purchasers
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
18
<PAGE> 19
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act; and the obligations of the
Purchasers under this Section 8 shall be in addition to any liability which the
respective Purchasers may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
19
<PAGE> 20
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Goldman, Sachs & Co. on behalf of you as the
Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representatives in care of Goldman, Sachs &
Co., 32 Old Slip, 21st Floor, New York, New York 10005, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: General Counsel; provided, however, that any notice to a
Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
20
<PAGE> 21
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
COR THERAPEUTICS, INC.
By: /s/ PETER S. RODDY
------------------------------------
Name: Peter S. Roddy
Title: Vice President, Finance
Accepted as of the date hereof:
Goldman, Sachs & Co.,
Chase H&Q, A Division of Chase Securities Inc.,
CIBC World Markets Corp.,
FleetBoston Robertson Stephens Inc.,
Warburg Dillon Read LLC
By: /s/ GOLDMAN, SACHS & CO.
--------------------------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
21
<PAGE> 22
SCHEDULE I
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
OPTIONAL SECURITIES
PRINCIPAL AMOUNT OF TO BE PURCHASED IF
FIRM SECURITIES TO MAXIMUM OPTION
PURCHASER BE PURCHASED EXERCISED
<S> <C> <C>
Goldman, Sachs & Co........................................ $150,000,000 $ 30,000,000
Chase H&Q, A Division of Chase Securities Inc. ............ 25,000,000 5,000,000
CIBC World Markets Corp. .................................. 25,000,000 5,000,000
FleetBoston Robertson Stephens, Inc. ...................... 27,500,000 5,500,000
Warburg Dillon Read LLC .................................. 22,500,000 4,500,000
Total.................................... $250,000,000 $ 50,000,000
</TABLE>
<PAGE> 23
ANNEX I
Pursuant to Section 7(c) of the Purchase Agreement, the accountants
shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
financial statement schedules audited by them and included in the
Offering Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements where
applicable) in the audited consolidated financial statements for such
five fiscal years;
(iv) On the basis of limited procedures not constituting an audit
in accordance with generally accepted auditing standards, consisting of
a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Offering Circular,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Offering Circular are not in conformity
with generally accepted accounting principles applied on the
basis substantially consistent with the basis for the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
in the Offering Circular;
(C) the unaudited financial statements which were not
included in the Offering Circular but from which were derived any
unaudited condensed financial statements
<PAGE> 24
referred to in clause (A) and any unaudited income statement data
and balance sheet items included in the Offering Circular and
referred to in clause (B) were not determined on a basis
substantially consistent with the basis for the audited
consolidated financial statements included in the Offering
Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to
form in all material respects with the applicable accounting
requirements or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights and
pursuant to the Company's employee stock purchase plan, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Offering Circular) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared
with amounts shown in the latest balance sheet included in the
Offering Circular except in each case for changes, increases or
decreases which the Offering Circular discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified
date referred to in clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified
by the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period
of corresponding length specified by the Representatives, except
in each case for decreases or increases which the Offering
Circular discloses have occurred or may occur or which are
described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures, inspection
of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Offering Circular, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
I-2
<PAGE> 25
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
A-1
<PAGE> 26
EXHIBIT B
COR THERAPEUTICS, INC.
LOCK-UP AGREEMENT
DATED AS OF FEBRUARY 15, 2000
Goldman, Sachs & Co.,
Chase H&Q, A Division of Chase Securities Inc.,
CIBC World Markets Corp.,
FleetBoston Robertson Stephens Inc.,
Warburg Dillon Read LLC,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, NY 10004.
Re: COR Therapeutics, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives"), propose to enter into a Purchase Agreement on behalf of the
several Purchasers named in Schedule I to such agreement (collectively, the
"Purchasers"), with COR Therapeutics, Inc., a Delaware corporation (the
"Company"), providing for an offering of Convertible Subordinated Notes (the
"Notes") of the Company that will be convertible into shares of the Common Stock
of the Company (the "Common Stock").
In consideration of the agreement by the Purchasers to offer and sell
the Notes, and of other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees that,
during the period beginning from the date of the final Offering Circular
covering the offering of the Notes and continuing to and including the date 90
days after the date of such final Offering Circular (the "Lock-Up Period"), the
undersigned will not offer, sell, contract to sell, pledge, grant any option to
purchase, make any short sale or otherwise dispose of, or exercise any
registration rights with respect to, any shares of Common Stock of the Company,
or any options or warrants to purchase any shares of Common Stock of the
Company, or any securities convertible into, exchangeable for or that represent
the right to receive shares of Common Stock of the Company, whether now owned or
hereinafter acquired, owned directly by the undersigned (including holding as a
custodian) or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the Securities and Exchange Commission (the
"SEC") (collectively the "Undersigned's Shares").
B-1
<PAGE> 27
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned's Shares even if such Shares would be disposed of
by someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the Undersigned's Shares or with respect to any security
that includes, relates to, or derives any significant part of its value from
such Shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be bound in writing by the restrictions set forth herein, and
provided further that any such transfer shall not involve a disposition for
value, (iii) with the prior written consent of Goldman, Sachs & Co. on behalf of
the Purchasers or, (iv) after the first 60 days of the Lock-Up Period, the
undersigned may transfer up to ten percent (10%) of the Undersigned's Shares
without any restrictions pursuant to this Lock-Up Agreement. For purposes of
this Lock-Up Agreement, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin. The undersigned now
has, and, except as contemplated by clause (i), (ii), (iii) or (iv) above, for
the duration of this Lock-Up Agreement will have, good and marketable title to
the Undersigned's Shares, free and clear of all liens, encumbrances, and claims
whatsoever. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of the Undersigned's Shares except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Purchasers are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
Very truly yours,
----------------------------------------
Exact Name of Shareholder
----------------------------------------
Authorized Signature
----------------------------------------
Title
B-2
<PAGE> 28
EXHIBIT B-1
List of person to sign
Lock-Up Agreements:
VAUGHN M. KAILIAN
CHARLES J. HOMCY
SHAUN R. COUGHLIN
JAMES T. DOLUISIO
JERRY T. JACKSON
ERNEST MARIO
ROBERT MOMSEN
LLOYD HOLLINGSWORTH SMITH JR.
MARK PERRIN
LEE RAUCH
PATRICK BRODERICK
B-3
<PAGE> 1
EXHIBIT 10.2
COR THERAPEUTICS, INC.
5.00% CONVERTIBLE SUBORDINATED NOTES DUE MARCH 1, 2007
REGISTRATION RIGHTS AGREEMENT
February 24, 2000
Goldman, Sachs & Co.,
Chase H&Q, A Division of Chase Securities Inc.,
CIBC World Markets Corp.,
FleetBoston Robertson Stephens Inc.,
Warburg Dillon Read LLC,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
COR Therapeutics, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to you (the "Purchasers") upon the terms set forth in a
purchase agreement dated February 17, 2000 (the "Purchase Agreement"), between
the Purchasers and the Company, its 5.00% Convertible Subordinated Notes due
March 1, 2007 (the "Securities"). As an inducement to the Purchasers to enter
into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchasers thereunder, the Company agrees with the
Purchasers, (i) for the benefit of the Purchasers and (ii) for the benefit of
the Holders (as defined below) from time to time of the Registrable Securities
(as defined below), including the Purchasers, as follows:
1. Definitions. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Purchase Agreement or the Offering
Circular, each dated February 17, 2000, in respect of the Securities. As used in
this Agreement, the following capitalized defined terms shall have the following
meanings:
"Act" or "Securities Act" means the United States Securities Act of
1933, as amended.
1
<PAGE> 2
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, "control"
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Closing Date" means the First Time of Delivery as defined in the
Purchase Agreement.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.0001 per share, of
the Company, and any securities of the Company or any successor which may be
issuable upon conversion of the Securities pursuant to Article Eleven of the
Indenture.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in Section 2(b) hereof.
"Electing Holder" means any Holder of Registrable Securities that has
returned a properly completed and signed Notice and Questionnaire to the Company
in accordance with Section 3(b) hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Holder" means any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" means the Indenture, dated as of February 24, 2000, between
the Company and Firstar Bank, N.A., as Trustee, as amended and supplemented from
time to time in accordance with its terms.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, as set forth in Section 6 hereof.
"Person" means an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Shelf 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 under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities.
"Registrable Security" means any Security and any share of Common Stock
issuable upon conversion or repurchase thereof except any such Security or share
of Common Stock which (i) has been effectively registered under the Securities
Act and sold in a manner contemplated by the Shelf
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<PAGE> 3
Registration Statement, (ii) has been transferred in compliance with Rule 144
under the Securities Act (or any successor provision thereto) or is transferable
pursuant to paragraph (k) of such Rule 144 (or any successor provision thereto)
("Rule 144(k)"), or (iii) has otherwise been transferred and a new Security or
share of Common Stock not subject to transfer restrictions under the Securities
Act has been delivered by or on behalf of the Company in accordance with Section
3.5(b) of the Indenture.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a shelf registration statement of
the Company pursuant to the provisions of Section 2 hereof filed with the
Commission which covers some or all of the Registrable Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. Shelf Registration.
(a) The Company shall, no later than 90 calendar days following the
Closing Date, file with the Commission a Shelf Registration Statement relating
to the offer and sale of the Registrable Securities by the Holders from time to
time in accordance with the methods of distribution elected by such Holders and
set forth in such Shelf Registration Statement and, thereafter, shall use its
reasonable efforts to cause such Shelf Registration Statement to be declared
effective under the Act within 180 calendar days following the Closing Date;
provided, however, that the Company may, upon written notice to all the Holders,
postpone having the Shelf Registration Statement declared effective for a
reasonable period not to exceed 90 days if the Company possesses material
non-public information, the disclosure of which would have a material adverse
effect on the Company and its subsidiaries taken as a whole; provided, further,
however, that no Holder shall be entitled to have the Registrable Securities
held by it covered by such Shelf Registration unless such Holder is an Electing
Holder.
(b) The Company shall use its reasonable efforts:
(i) To keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus forming part thereof to be
usable by Holders until the earliest of (1) the sale of all Registrable
Securities registered under the Shelf Registration Statement; (2) the
expiration of the period referred to in Rule 144(k) with respect to all
Registrable Securities held by Persons that are not Affiliates of the
Company; and (3) two years from the date (the "Effective Date") such
Shelf Registration Statement is declared effective (such period being
called the "Effectiveness Period"); and
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(ii) After the Shelf Registration Statement is declared effective
by the Commission, upon the request of an Electing Holder, to take
action reasonably necessary to register the sale of any Registrable
Securities of such Electing Holder and to identify such Electing Holder
as a selling securityholder.
The Company shall be deemed not to have used its reasonable efforts to keep the
Shelf Registration Statement effective during the requisite period if the
Company voluntarily takes any action that would result in Holders of Registrable
Securities covered thereby not being able to offer and sell any such Registrable
Securities during that period, unless such action is required by applicable law
and the Company thereafter promptly complies with the requirements of paragraph
3(k) below.
(c) The Company may suspend the use of the Prospectus for a period not
to exceed 45 days in any 90-day period or an aggregate of 90 days in any 365-day
period if the Board of Directors of the Company shall have determined in good
faith that because of valid business reasons (not including avoidance of the
Company's obligations hereunder), including the acquisition or divestiture of
assets, pending corporate developments and similar events, it is in the best
interests of the Company to suspend such use, and prior to suspending such use
the Company provides the Holders with written notice of such suspension, which
notice need not specify the nature of the event giving rise to such suspension.
(d) Without limiting the remedies available to the Electing Holders
under Section 7 hereof, the Company acknowledges that any failure by the Company
to comply with its obligations under Section 2(a) hereof may result in material
irreparable injury to the Purchasers or the Electing Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the
Purchasers or any Electing Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Section 2(a) hereof.
3. Registration Procedures. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Company shall prepare and file with the Commission the Shelf
Registration Statement on the appropriate form under the Act (x) which form
shall be selected by the Company, (y) which form shall be available for the sale
of the Registrable Securities by the Electing Holders and (z) which Shelf
Registration Statement and any amendment thereto and the Prospectus forming part
thereof and any amendment or supplement thereto (and each other document
incorporated therein by reference in each case) shall comply as to form in all
material respects with the Act and the Exchange Act and the respective rules and
regulations thereunder and shall include (or incorporate by reference) all
financial statements required by the Commission to be filed therewith, and shall
use its reasonable efforts to cause such Shelf Registration Statement to become
effective and remain effective in accordance with Section 2 hereof.
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(b) (1) The Company shall mail the Notice and Questionnaire to the
Holders of Registrable Securities not less than 30 calendar days prior
to the time the Company intends in good faith to have the Shelf
Registration Statement declared effective. Any Person that acquires any
Registrable Securities from an Electing Holder in compliance with the
applicable provisions of the Securities (excluding any Registrable
Securities that were not identified in the Notice and Questionnaire
delivered by such Electing Holder) will be entitled to have such
Registrable Securities included in the Shelf Registration Statement so
long as such transferee provides the Company with an updated Notice and
Questionnaire prior to the Questionnaire Deadline (as defined below).
Subject to Section 3(b)(2) hereof, no Holder of Registrable Securities
shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement as of the Effective Date, and no Holder of
Registrable Securities shall be entitled to use the Prospectus forming a
part thereof for offers and resales of Registrable Securities at any
time, unless such Holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth
therein (the "Questionnaire Deadline"), such response deadline to be on
a date not less than 30 calendar days after the date of mailing of the
Notice and Questionnaire by the Company.
(2) After the Effective Date of the Shelf Registration Statement,
the Company shall, upon the request of any Holder of Registrable
Securities that is not then an Electing Holder, as promptly as
reasonably practicable, send a Notice and Questionnaire to such Holder.
The Company shall not be required to take any action to name such Holder
as a selling securityholder in the Shelf Registration Statement until
such Holder has returned a completed and signed Notice and Questionnaire
to the Company. Following its receipt of such Notice and Questionnaire,
the Company will reasonably promptly include the Registrable Securities
covered thereby in the Shelf Registration Statement (if not previously
included).
(3) If such complete Notice and Questionnaire is received by the
Company before 10 days prior to the Effective Date, such Holder shall be
entitled to have its Registrable Securities included in the Shelf
Registration Statement at the Effective Date. If the Company receives
such complete Notice and Questionnaire after the 10th day prior to the
Effective Date, the Registrable Securities covered by the Notice and
Questionnaire will be included in the Shelf Registration Statement as
promptly as reasonably practicable after receipt of such Notice and
Questionnaire.
(4) In the event that the Company receives such complete Notice
and Questionnaire after the Shelf Registration Statement has been
declared effective, the Company will, as promptly as reasonably
practicable following receipt of the complete Notice and Questionnaire,
file any amendments to the Shelf Registration Statement or supplements
related to the Prospectus as are necessary to permit such Holder to
deliver the Prospectus to purchasers of the Registrable Securities. The
Company shall use reasonable efforts to cause such post-effective
amendment to the Shelf Registration Statement to be declared effective
within 45 days of the filing of such post-effective amendment. The
Company may take reasonable steps to aggregate the addition of
Registrable Securities of more than one
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<PAGE> 6
Holder for purposes of filing amendments to the Shelf Registration
Statement or supplements to the Prospectus so as to reduce the need for
multiple amendments or supplements, but the Company shall not utilize
this provision to delay any filing requested by any of the Purchasers.
(c) The Company shall furnish to the Holders, prior to the filing
thereof with the Commission, a copy of any Shelf Registration Statement, and
each amendment thereof and each amendment or supplement, if any, to the
Prospectus included therein and shall use reasonable efforts to reflect in each
such document, when so filed with the Commission, such comments as the Holders
reasonably may propose.
(d) The Company shall take such action as may be necessary so that (i)
any Shelf Registration Statement and any amendment thereto and any Prospectus
forming part thereof and any amendment or supplement thereto (and each report or
other document incorporated therein by reference in each case) complies in all
material respects with the Securities Act and the Exchange Act and the
respective rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective, 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 (iii) any Prospectus forming part of any Shelf Registration Statement, and
any amendment or supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements, in the light of the circumstances under which they were
made, not misleading.
(e) (i) The Company shall advise the Purchasers, the Electing Holders
and the Managing Underwriter or Underwriters promptly and, if requested
by the Purchasers or any Electing Holder, confirm such advice in
writing:
(1) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective in each case making a public announcement thereof
by release made to Reuters Economic Services and Bloomberg
Business News;
(2) when the Company receives any request by the Commission
for amendments or supplements to the Shelf Registration Statement
or the Prospectus included therein or for additional information;
(3) when the Commission issues any stop order suspending
effectiveness of the Shelf Registration Statement or initiates any
proceedings for that purpose;
(4) when the Company receives any notification with respect
to the suspension of the qualification of the securities included
therein for sale in any jurisdiction or the initiation of any
proceeding for such purpose; and
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<PAGE> 7
(ii) The Company shall, as promptly as reasonably practicable,
advise the Purchasers, the Electing Holders and each Managing
Underwriter, if any, of the happening of any event that requires the
making of any changes to the Shelf Registration Statement or the
Prospectus so that, as of such date, the Shelf Registration Statement
and the Prospectus do not contain an untrue statement of a material fact
and do not omit to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been
made).
(f) The Company shall use reasonable efforts to prevent the issuance,
and if issued to obtain the withdrawal, of any order suspending the
effectiveness of any Shelf Registration Statement at the earliest possible time.
(g) The Company shall furnish to each Electing Holder, counsel for the
Purchasers, each Purchaser and each Managing Underwriter, if any, with respect
to a Shelf Registration Statement, without charge, at least one copy of such
Shelf Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Electing Holder so requests in
writing, all exhibits (including those incorporated by reference).
(h) The Company shall, during the Effectiveness Period, deliver to each
Electing Holder and each Managing Underwriter, if any, with respect to a Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Electing Holder may
reasonably request; and the Company consents (except during the continuance of
any event described in Section 3(e)(ii)) to the use of the Prospectus or any
amendment or supplement thereto by each of the Electing Holders in connection
with the offering and sale of the Registrable Securities covered by the
Prospectus and any amendment or supplement thereto during the Effectiveness
Period.
(i) Prior to any offering of Registrable Securities pursuant to any
Shelf Registration Statement, the Company shall register or qualify or cooperate
with the Purchasers and their counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such Electing Holders
reasonably request in writing and do any and all other acts or things necessary
or advisable to enable the offer and sale in such jurisdictions of the
Registrable Securities covered by such Shelf Registration Statement; provided,
however, that in no event shall the Company be obligated to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to so qualify but for this Section 3(i), (ii)
file any general consent to service of process or taxation in any jurisdiction
where it is not as of the date hereof then so subject or (iii) subject itself to
taxation in any jurisdiction if it is not so subject.
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<PAGE> 8
(j) Unless any Registrable Securities shall be in book-entry only form,
the Company shall cooperate with the Electing Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to any Shelf Registration Statement free of any restrictive
legends and in such permitted denominations and registered in such names as
Electing Holders may request in connection with the sale of Registrable
Securities pursuant to such Shelf Registration Statement.
(k) Upon the occurrence of any event contemplated by paragraph 3(e)(ii)
above, the Company shall promptly prepare a post-effective amendment to any
Shelf Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as thereafter delivered
to purchasers of the Registrable Securities included therein, the Prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Company
notifies the Electing Holders of the occurrence of any event contemplated by
paragraph 3(e)(ii) above, the Electing Holders shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made.
(l) Not later than the effective date of any Shelf Registration
Statement hereunder, the Company shall provide a CUSIP number for the Securities
registered under such Shelf Registration Statement.
(m) The Company shall use reasonable efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to their security holders or otherwise provide in accordance with
Section 11(a) of the Securities Act as soon as practicable after the effective
date of the applicable Shelf Registration Statement an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act.
(n) The Company shall cause the Indenture and the Securities to be
qualified under the Trust Indenture Act in a timely manner; and in connection
with such qualification, the Company shall cooperate with the Trustee under the
Indenture and the Holders (as defined in the Indenture) to effect such changes
to the Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the Trust Indenture Act; and the Company shall
execute and use all reasonable efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such Indenture to
be so qualified in a timely manner.
(o) In the event of an underwritten offering as set forth in Section 6
herein, the Company shall, if requested, promptly include or incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriter or Underwriters
reasonably request to be included therein and to which the Company does not
reasonably object and shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after it is
notified of the matters to be included or incorporated in such Prospectus
supplement or post-effective amendment.
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<PAGE> 9
(p) The Company shall enter into such customary agreements (including
underwriting agreements in customary form) to take all other appropriate actions
in order to expedite or facilitate the registration or the disposition of the
Registrable Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures substantially identical to those set forth in Section 5 (or such
other provisions and procedures acceptable to the Managing Underwriters, if any)
with respect to all parties to be indemnified pursuant to Section 5.
(q) The Company shall:
(i) make reasonably available for inspection by one or more
representative of the Electing Holders designated in writing by the
Holders of a majority of the Registrable Securities to be registered
thereunder, any Underwriter participating in any disposition pursuant to
such Shelf Registration Statement, and any attorney, accountant or other
agent retained by such representative or any such Underwriter all
relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors and employees to make
reasonably available for inspection all relevant information reasonably
requested by such representative or any such Underwriter, attorney,
accountant or agent in connection with any such Shelf Registration
Statement, in each case, as is customary for similar due diligence
examinations; provided, however, that any information that is designated
in writing by the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by such
representative, any Holders or any such Underwriter, attorney,
accountant or agent, unless such disclosure is made in connection with a
court proceeding or required by law, or such information becomes
available to the public generally or through a third party without an
accompanying obligation of confidentiality;
(iii) make such representations and warranties to the Electing
Holders and the Underwriters, if any, in form, substance and scope as
are customarily made by the Company to underwriters in primary
underwritten offerings and covering matters including, but not limited
to, those set forth in the Purchase Agreement;
(iv) 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) addressed to each Electing Holder and the
Underwriters, if any, covering such matters as are customarily covered
in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by such Electing Holders and Underwriters
(it being agreed that the matters to be covered by such opinion or
written statement by such counsel delivered in connection with such
opinions shall include in customary form, without limitation, as of the
date of the opinion and as of the effective date of the Shelf
Registration Statement or most recent post-effective amendment thereto,
as the case may be, the absence from such Shelf Registration Statement
and the prospectus included therein, as then amended or supplemented,
including the documents incorporated by reference therein, of an untrue
statement of a
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<PAGE> 10
material fact or the omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading);
(v) use its reasonable efforts to obtain "cold comfort" letters
and updates thereof from the independent public accountants of the
Company (and, if necessary, any other independent public accountants of
any subsidiary of the Company or of any business acquired by the Company
for which financial statements and financial data are, or are required
to be, included in the Shelf Registration Statement), addressed to each
Electing Holder and the Underwriters, if any, in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with primary underwritten offerings;
(vi) deliver such documents and certificates as may be reasonably
requested by any such Electing Holders and the Managing Underwriters, if
any, including those to evidence compliance with Section 3(d) and with
any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company.
The foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of
this Section 3(p) shall be performed at each closing under any
underwritten offering to the extent required thereunder (including at
any closing relating to the exercise by underwriters of their
over-allotment options, if any).
(r) The Company will use its reasonable efforts to cause the Stock
issuable upon conversion of the Securities to be admitted for quotation on the
Nasdaq National Market or other stock exchange or trading system on which the
Stock primarily trades on or prior to the effective date of any Shelf
Registration Statement hereunder.
(s) In the event that any broker-dealer registered under the Exchange
Act shall be an "Affiliate" (as defined in Rule 2720(b)(i) of the Rules of
Conduct of the National Association of Securities Dealers, Inc. (the "NASD") (or
any successor or analogous provision thereto)) of the Company or has a "Conflict
of Interest" (as defined in Rule 2720(b)(7) of the Rules of Conduct of the NASD
(or any successor an analogous provision thereto)) and such broker-dealer shall
underwrite, participate as a member of an underwriting syndicate or selling
group or "assist in the distribution" (within the meaning of such rule) of any
Registrable Securities, whether as a holder of such Registrable Securities or as
an underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, assist such broker-dealer (at the expense of such
broker-dealer) in complying with the requirements of such rule, including,
without limitation, by (A) engaging a "qualified independent underwriter" (as
defined in such rule) to participate in the preparation of the registration
statement relating to such Registrable Securities, to exercise usual standards
of due diligence in respect thereto and to recommend the public offering price
of such Registrable Securities, (B) indemnifying such qualified independent
underwriter to the extent of the indemnification of Underwriters provided in
Section 5 hereof, and (C) providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with the requirements
of the Rules of Conduct of the NASD.
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(t) The Company shall use reasonable efforts to take all other steps
necessary to effect the registration, offering and sale of the Registrable
Securities covered by the Shelf Registration Statement contemplated hereby.
(u) The Company may require each Electing Holder with respect to a Shelf
Registration Statement to furnish to the Company such information regarding the
Electing Holder and the distribution of Registrable Securities held by such
Electing Holder as may be required by applicable law or regulation for inclusion
in such Shelf Registration Statement and the Company may exclude from such
registration the Registrable Securities of any Electing Holder that fails to
furnish such information within a reasonable time after receiving such request.
4. Registration Expenses. Except as otherwise provided in Section 6, the
Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 hereof and shall bear or
reimburse the Electing Holders for the reasonable fees and disbursements of a
single counsel selected by a plurality of all Electing Holders who own an
aggregate of not less than 25% of the Registrable Securities covered by the
Shelf Registration Statement to act as counsel therefor in connection therewith.
Each Electing Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Electing
Holder's Registrable Securities pursuant to the Shelf Registration Statement.
5. Indemnification and Contribution.
(a) In connection with any Shelf Registration Statement, the Company
shall indemnify and hold harmless each Electing Holder, each Underwriter who
participates in an offering of Registrable Securities, each person, if any, who
controls any of such parties within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act and each of their respective directors,
officers, employees, trustees and agents, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, including any amounts paid in settlement of any
investigation, litigation, proceeding or claim, joint or several, as
incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Shelf Registration
Statement (or any amendment thereto) covering Registrable Securities,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, that the Company shall not be liable under
this clause (i) for any settlement of any action effected without its
written consent, which consent shall not be unreasonably withheld; and
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<PAGE> 12
(ii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by the
Electing Holders, such Electing Holder or any Underwriter (except to the
extent otherwise expressly provided in Section 5(c) hereof)), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) of this Section 5(a);
provided that this indemnity shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Electing Holder or any
Underwriter in writing expressly for use in the Shelf Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto). Any amounts advanced by the Company to an indemnified party pursuant
to this Section 5 as a result of such losses shall be returned to the Company if
it shall be finally determined by such a court in a judgment not subject to
appeal or final review that such indemnified party was not entitled to
indemnification by the Company.
(b) Each Electing Holder shall agree, severally and not jointly, to
indemnify and hold harmless the Company, each Underwriter who participates in an
offering of Registrable Securities and the other Electing Holders and each of
their respective directors, officers (including each officer of the Company who
signed the Shelf Registration Statement), employees, trustees and agents and
each Person, if any, who controls the Company, any Underwriter or any other
Electing Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all loss, liability,
claim, damage and expense whatsoever described in the indemnity contained in
Section 5(a)(i) and (ii) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Shelf Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Electing Holder expressly
for use in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto); provided, however, that, no
such Electing Holder shall be liable for any claims hereunder in excess of the
amount of net proceeds received by such Electing Holder from the sale of
Registrable Securities pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, enclosing a copy of all papers served on such indemnified
party, but failure to so notify an indemnifying party shall not relieve it of
any liability which it may have to the indemnified party otherwise than on
account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action. If an indemnifying party so
elects within a reasonable time after receipt of such notice, such indemnifying
party, jointly with any other indemnifying party, may assume the defense of such
action with counsel chosen by it and approved by the indemnified party or
parties defendant in such action, provided that if any such indemnified party
reasonably
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determines that there may be legal defenses available to such indemnified party
which are different from or in addition to those available to such indemnifying
party or that representation of such indemnifying party and any indemnified
party by the same counsel would present a conflict of interest, then such
indemnifying party or parties shall not be entitled to assume such defense. If
an indemnifying party is not entitled to assume the defense of such action as a
result of the proviso to the preceding sentence, counsel for such indemnifying
party shall be entitled to conduct the defense of such indemnifying party and
counsel for each indemnified party or parties shall be entitled to conduct the
defense of such indemnified party or parties. If an indemnifying party assumes
the defense of an action in accordance with and as permitted by the provisions
of this paragraph, such indemnifying party shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. In no event shall the indemnifying party or parties
be liable for the fees and expenses of more than one counsel (in addition to any
local counsel) separate from its own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provision provided for in this Section 5 is
for any reason held to be unavailable to an indemnified party although
applicable in accordance with its terms, then each indemnifying party shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity agreement incurred by such indemnified
party, as incurred; provided that 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 that was not guilty of such
fraudulent misrepresentation. Each such indemnifying party shall contribute to
such aggregate losses, liabilities, claims, damages and expenses of such
indemnified party of the nature contemplated by such indemnity agreement in such
proportion as shall be appropriate to reflect the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, with respect to the statements or omissions which resulted in such loss,
liability, claim, damage or expense, or action in respect thereof, as well as
any other relevant equitable considerations. The relative fault of an
indemnifying party, on the one hand, and of an indemnified party, 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 such
indemnifying party, on the one hand, or by or on behalf of such indemnified
party, on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Purchasers and the Holders of the Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this Section
5(d) were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 5(d), each director, officer,
employee, trustee, agent and Person, if any, who controls a Purchaser or Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Purchaser or
Holder, as the case may be, and each director, officer, employee, trustee and
agent of the Company, and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to
13
<PAGE> 14
contribution as the Company. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its written
consent, which consent shall not be unreasonably withheld.
(e) The Company may require, as a condition to including any Registrable
Securities in any Registration Statement filed and to entering into any
underwriting agreement with respect thereto, that the Company shall have
received an undertaking reasonably satisfactory to it from the holder of such
Registrable Securities and from each Underwriter named in any such underwriting
agreement, severally and not jointly, to comply with the provisions of
paragraphs (a) through (d) of this Section 5.
The indemnity and contribution provisions contained in this Section 5
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 Managing Underwriters, if any, any Electing Holder or any Person controlling
any Electing Holder, or by or on behalf of the Company, its officers or
directors or any Person controlling the Company and (iii) any sale of
Registrable Securities pursuant to the Shelf Registration Statement.
6. Underwritten Offering. The Electing Holders who desire to do so may
sell Registrable Securities in an underwritten offering upon request to the
Company. In any such underwritten offering, the investment banker or bankers and
manager or managers that will administer the offering will be selected by, and
the underwriting arrangements with respect thereto will be approved by the
Holders of a majority of the Registrable Securities to be included in such
offering; provided, however, that (i) such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company and
(ii) the Company shall not be obligated to arrange for more than one
underwritten offering during the Effectiveness Period. No Holder may participate
in any underwritten offering contemplated hereby unless such Holder (a) agrees
to sell such Holder's Registrable Securities in accordance with any approved
underwriting arrangements, (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements and (c) at least 20% of the outstanding Registrable
Securities are included in such underwritten offering. The Holders participating
in any underwritten offering shall be responsible for any expenses customarily
borne by selling securityholders, including underwriting discounts and
commissions and fees and expenses of counsel to the selling securityholders and
shall reimburse the Company for the fees and disbursements of their counsel,
their independent public accountants and any printing expenses incurred in
connection with such underwritten offerings. Notwithstanding the foregoing or
the provisions of Section 3(o) hereof, upon receipt of a request from the
Managing Underwriter or a representative of Holders of a majority of the
Registrable Securities outstanding to prepare and file an amendment or
supplement to the Shelf Registration Statement and Prospectus in connection with
an underwritten offering, the Company may delay the filing of any such amendment
or supplement for up to 90 days if the Company in good faith has a valid
business reason for such delay.
7. Liquidated Damages
14
<PAGE> 15
(a) Pursuant to Section 2(a) hereof, the Company may, upon written
notice to all the Holders, postpone having the Shelf Registration Statement
declared effective for a reasonable period not to exceed 90 days if the Company
possesses material non-public information, the disclosure of which would have a
material adverse effect on the Company and its subsidiaries taken as a whole.
Notwithstanding any such postponement, if (i) on or prior to the 90th day
following the Closing Date, a Shelf Registration Statement has not been filed
with the Commission or (ii) on or prior to the 180th day following the Closing
Date, such Shelf Registration Statement is not declared effective by the
Commission (each, a "Registration Default"), the Company shall be required to
pay liquidated damages ("Liquidated Damages"), from and including the day
following such Registration Default until such Shelf Registration Statement is
either so filed or so filed and subsequently declared effective, as applicable,
or, if earlier, the end of the Effectiveness Period, at a rate per annum equal
to an additional one-quarter of one percent (0.25%) of the principal amount of
Registrable Securities, to and including the 90th day following such
Registration Default and one-half of one percent (0.5%) thereof from and after
the 91st day following such Registration Default.
(b) In the event that the Shelf Registration Statement ceases to be
effective (or the Holders of Registrable Securities are otherwise prevented or
restricted by the Company from effecting sales pursuant thereto) (an "Effective
Failure") for more than 45 days, whether or not consecutive, in any 90-day
period, or 90 days, whether or not consecutive, during any 12-month period, then
the Company shall pay Liquidated Damages at a rate per annum equal to an
additional one-half of one percent (0.5%) from the 46th day of the applicable
90-day period or the 91st day of the applicable 12-month period, as the case may
be, that such Shelf Registration Statement ceases to be effective (or the
Holders of Registrable Securities are otherwise prevented or restricted by the
Company from effecting sales pursuant thereto) until the earlier of (i) the time
the Shelf Registration Statement again becomes effective or the Holders of
Registrable Securities are again able to make sales under the Shelf Registration
Statement or (2) the time the Effectiveness Period expires. For the purpose of
determining an Effective Failure, days on which the Company has been obligated
to pay Liquidated Damages in accordance with the foregoing in respect of a prior
Effective Failure within the applicable 90-day or 12-month period, as the case
may be, shall not be included.
(c) In the event the Company fails to file a post-effective amendment to
the Shelf Registration Statement, or the post-effective amendment is not
declared effective, within the periods required by Section 3(b)(4), the Company
shall pay Liquidated Damages at a rate per annum equal to an additional one-half
of one percent (0.5%) from and including the date of such Registration Default
until such time as such Registration Default is cured.
(d) Any amounts to be paid as Liquidated Damages pursuant to paragraphs
(a), (b) or (c) of this Section shall be paid semi-annually in arrears, with the
first semi-annual payment due on the first Interest Payment Date (as defined in
the Indenture), as applicable, following the date of such Registration Default.
Such Liquidated Damages will accrue (1) in respect of the Securities at the
rates set forth in paragraphs (a), (b) or (c) of this Section, as applicable, on
the principal amount of the Securities and (2) in respect of the Common Stock
issued upon conversion of the Securities,
15
<PAGE> 16
at the rates set forth in paragraphs (a), (b) or (c) of this Section, as
applicable, applied to the Conversion Price (as defined in the Indenture) at
that time.
(e) Except as provided in Section 2(d), the Liquidated Damages as set
forth in this Section 7 shall be the exclusive monetary remedy available to the
Holders of Registrable Securities for such Registration Default or Effective
Failure. In no event shall the Company be required to pay Liquidated Damages in
excess of the applicable maximum amount of one-half of one percent (0.5%) set
forth above, regardless of whether one or multiple Registration Defaults exist.
8. Miscellaneous.
(a) Other Registration Rights. The Company may have granted and may in
the future grant registration rights that would permit any Person that is a
third party the right to piggy-back on any Shelf Registration Statement,
provided that if the Managing Underwriter, if any, of such offering notifies the
Electing Holders that the total amount of securities which they and the holders
of such piggy-back rights intend to include in any Shelf Registration Statement
is so large as to materially adversely affect the success of such offering
(including the price at which such securities can be sold), then only the
amount, the number or kind of securities to be offered for the account of
holders of such piggy-back rights will be reduced to the extent necessary to
reduce the total amount of securities to be included in such offering to the
amount, number or kind recommended by the Managing Underwriter prior to any
reduction in the amount of Registrable Securities to be included.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, qualified, 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
Goldman, Sachs & Co.
(c) No Inconsistent Agreements. The Company has not entered into, and on
or after the date of this Agreement will not enter into, any agreement which is
inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
8(d);
(2) if to the Purchasers, initially at the address set forth in
the Purchase Agreement; and
16
<PAGE> 17
(3) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been duly given when
received.
The Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties and the
Holders, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders of Registrable Securities. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of
Registrable Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(f) 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 an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
provisions relating to conflicts of laws.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
17
<PAGE> 18
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
COR THERAPEUTICS, INC.
By: /s/ PETER S. RODDY
------------------------------------
Name: Peter S. Roddy
Title: Vice President, Finance
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
Goldman, Sachs & Co.,
Chase H&Q, A Division of Chase Securities Inc.,
CIBC World Markets Corp.,
FleetBoston Robertson Stephens Inc.,
Warburg Dillon Read LLC,
By: /s/ GOLDMAN, SACHS & CO.
-----------------------------------
(Goldman, Sachs & Co.)
18
<PAGE> 19
Appendix A
COR THERAPEUTICS, INC.
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE]
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in the COR Therapeutics, Inc.
(the "Company") 5.00% Convertible Subordinated Notes due March 1, 2007 (the
"Notes") are held. The Notes are identified by CUSIP No. 217753AA0.
In accordance with the terms of the Registration Rights Agreement, dated
as of February 17, 2000, between the Company and the Purchasers named therein
(the "Registration Rights Agreement"), the Company is in the process of
registering the Notes and the shares of common stock, par value $.0001 per share
(together, the "Securities"), issuable upon conversion thereof, under the
Securities Act of 1933, as amended, for resale by the beneficial owners thereof.
In order to have their Securities included in the registration statement, the
beneficial owners, INCLUDING BENEFICIAL OWNERS RESIDENT OUTSIDE THE UNITED
STATES, must complete and return the enclosed Notice of Registration Statement
and Selling Securityholder Questionnaire (the "Notice and Questionnaire").
It is important that beneficial owners of the Securities receive a copy
of the enclosed materials as soon as possible as their rights to have the
Securities included in the registration statement depend upon their returning
the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy
of the enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact:
COR Therapeutics, Inc.
256 East Grand Avenue
South San Francisco, California 94080
Attention: Corporate Counsel
Telephone: (650) 246-7315
Fax: (650) 244-9208.
A-1
<PAGE> 20
NOTICE OF REGISTRATION STATEMENT
AND SELLING SECURITYHOLDER QUESTIONNAIRE
A-2
<PAGE> 21
COR Therapeutics, Inc.
Notice of Registration Statement
and
Selling Securityholder Questionnaire
(Date)
COR Therapeutics, Inc. (the "Company") has filed or intends shortly to
file with the United States Securities and Exchange Commission (the
"Commission") a preliminary registration statement on Form S-3 (the "Shelf
Registration Statement") for the registration and resale under the United States
Securities Act of 1933, as amended (the "Securities Act"), of the Company's
5.00% Convertible Subordinated Notes due March 1, 2007 (CUSIP No. 21753AA0) (the
"Notes"), and Common Stock issuable upon conversion thereof, in accordance with
the terms of the Registration Rights Agreement, dated as of February 24, 2000
(the "Registration Rights Agreement"), between the Company and the purchasers
named therein (the "Purchasers"). A copy of the Registration Rights Agreement
has been sent to each of the Purchasers. All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Registration
Rights Agreement.
In order to have Registrable Securities included in the Shelf
Registration Statement (or a supplement or amendment thereto), this Notice of
Registration Statement and Selling Securityholder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the Company at the
address set forth herein for receipt ON OR BEFORE [insert date that is 30 days
from the Notice date] (the "Questionnaire Deadline"). Unless the Company
otherwise consents, beneficial owners of the Registrable Securities who do not
complete, execute and return this Notice and Questionnaire by such date (i) will
not be named as selling securityholders in the Shelf Registration Statement (or
a supplement or amendment thereto) and related Prospectus and (ii) may not sell
their Registrable Securities pursuant thereto. Beneficial owners of Registrable
Securities not who have returned a Notice and Questionnaire by the Questionnaire
Deadline may, however, receive another Notice and Questionnaire from the Company
upon request. Following its receipt of a completed and signed Notice and
Questionnaire, the Company will include the Registrable Securities covered
thereby in the Shelf Registration Statement subject to restrictions on the
timing and number of supplements to the Shelf Registration Statement provided in
the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
The term "Registrable Securities" is defined in the Registration Rights
Agreement to mean all or any portion of the Notes issued under the Trust
Indenture and the Common Stock issuable upon
A-3
<PAGE> 22
conversion of such Notes, provided, however, that a security ceases to be a
Registrable Security when it is no longer a Restricted Security.
The term "Restricted Security" is defined in the Registration Rights
Agreement to mean any Note or Common Stock issuable upon conversion thereof
except any such Note or Common Stock which (i) has been registered pursuant to
an effective registration statement under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
Rule 144 (or any successor provision thereto) or (iii) has otherwise been
transferred and a new Note or share of Common Stock not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf of the
Company in accordance with the Indenture.
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3)
(unless otherwise specified under Item 3). The undersigned, by signing and
returning this Notice and Questionnaire, agrees to be bound with respect to such
Registrable Securities by the terms and conditions of this Notice and
Questionnaire and the Registration Rights Agreement, including, without
limitation, Section 5 of the Registration Rights Agreement, as if the
undersigned Selling Securityholder were an original party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Company and the Trustee the Notice of Transfer (completed and signed) set
forth in Exhibit 1 attached to this Notice and Questionnaire and hereby
undertakes to do so.
The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
A-4
<PAGE> 23
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
------------------------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as in (a)
above) of Registrable Securities Listed in (3) Below:
------------------------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not the
same as (b) above) Through Which Registrable Securities Listed in
(3) Below are Held:
------------------------------------------------------------------------
(2) Address for Notices to Selling Securityholder:
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
Telephone:
--------------------------------------------------------------
Fax:
--------------------------------------------------------------------
Contact:
----------------------------------------------------------------
(3) Beneficial Ownership of Registrable Securities:
Except as set forth below, the undesigned Selling Securityholder does
not beneficially own any Notes or Common Stock previously issued upon
conversion, repurchase or redemption of any Note.
Principal amount of Notes beneficially owned:
--------------------------
Number of shares of Common Stock beneficially owned and issued to date
upon conversion, repurchase or redemption of Notes (if any):
------------
Principal amount of Notes which the undersigned wishes to be included in
the Shelf Registration Statement:
---------------------------------------
Number of shares of Common Stock (if any) issued upon conversion,
repurchase or redemption of Registrable Securities which are to be
included in the Shelf Registration Statement:
A-5
<PAGE> 24
------------------------------------------------------------------------
(4) Other shares of Common Stock or other Notes of the Company owned by the
Selling Securityholder:
-------------------------------------------------
Except as set forth below, and under item (3) above, the undersigned
Selling Securityholder is not the beneficial or registered owner of any
shares of Common Stock or any other securities of the Company.
State any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any of
its affiliates, officers, director or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during
the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item
(3) only as follows (if at all): Such Registrable Securities may be sold
from time to time directly by the undersigned Selling Securityholder or,
alternatively, through underwriters, broker-dealers or agents. Such
Registrable Securities may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated prices. Such
sales may be effected in transactions (which may involve crosses or
block transactions) (i) on any national securities exchanges or U.S.
inter-dealer quotation system of a registered national securities
association on which the Registrable Securities may be listed or quoted
at the time of sale, (ii) in the over-the-counter market, (iii) in
transactions otherwise than on such exchanges or services or in the
over-the-counter market, or (iv) through the writing of options. In
connection with sales of the Registrable Securities or otherwise, the
Selling Securityholder may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the
Registrable Securities in the course of hedging the positions they
assume. The Selling Securityholders may also sell Registrable Securities
short and deliver Registrable Securities to close out such short
positions, or loan or pledge Registrable Securities to broker-dealers
that in turn may sell such securities.
State any exceptions here:
A-6
<PAGE> 25
Note: In no event may such method(s) of distribution take the form of an
underwritten offering of the Registrable Securities without the prior agreement
of the Company.
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
prospectus delivery and other provisions of the Securities Act and Exchange Act
and the respective rules and regulations thereunder, particularly Regulation M.
In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the date on
which such information is provided to the Company, the Selling Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Registration Rights
Agreement.
A-7
<PAGE> 26
By signing below, the Selling Securityholder consents to the
disclosure of the information contained herein in its answers to Items (1)
through (6) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling Securityholder
understands that such information will be relied upon by the Company in
connection with the preparation of the Shelf Registration Statement and related
Prospectus.
In accordance with the Selling Securityholder's obligation under
the Registration Rights Agreement to provide such information as may be required
by law for inclusion in the Shelf Registration Statement, the Selling
Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Registration Rights Agreement
shall be made in writing by hand delivery, first-class mail, or air courier
guaranteeing overnight delivery as follows:
To the Company:
COR Therapeutics, Inc.
256 East Grand Avenue
South San Francisco, California 94080
Attention: General Counsel
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
--------------------------------------------------------
-----------------------------------------
Selling Securityholder
(Print/type full legal name of beneficial
owner of Registrable Securities)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
A-8
<PAGE> 27
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE
FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY AT:
COR Therapeutics, Inc.
256 East Grand Avenue
South San Francisco, California 94080
Attention: General Counsel
A-9
<PAGE> 28
EXHIBIT 1
to Appendix A
NOTICE TO TRANSFER PURSUANT TO REGISTRATION STATEMENT
Firstar Bank, N.A.
101 E. 5th Street
12th Floor Corporate Trust
St. Paul, MN 55101
COR Therapeutics, Inc.
256 East Grand Avenue
South San Francisco, California 94080
Attention: General Counsel
Re: 5.00% Convertible Subordinated Notes
due March 1, 2007 (the "Notes")
Dear Sirs:
Please be advised that has transferred $
aggregate principal amount of the above-referenced Notes or shares of the
Company's Common Stock, issued on conversion, repurchase or redemption of Notes,
pursuant to the Registration Statement Form S-3 (File No. 333- ) filed
by the Company.
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Notes
or Common Stock is named as a selling securityholder in the Prospectus dated or
in amendments or supplements thereto, and that the aggregate principal amount of
the Notes or number of Common Stock transferred are [a portion of] the Notes or
Common Stock listed in such Prospectus as amended or supplemented opposite such
owner's name.
A-10
<PAGE> 29
Dated: Very truly yours,
------------------------------
------------------------------------
(Name)
By:
---------------------------------
(Authorized Signature)
A-11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED BALANCE SHEETS, CONDENSED STATEMENTS OF OPERATIONS, AND CONDENSED
STATEMENTS OF CASH FLOWS INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD
ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS AND THE NOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 145,099
<SECURITIES> 193,737
<RECEIVABLES> 9,184
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 380,392
<PP&E> 25,934
<DEPRECIATION> (21,159)
<TOTAL-ASSETS> 395,583
<CURRENT-LIABILITIES> 52,921
<BONDS> 300,000
0
0
<COMMON> 3
<OTHER-SE> 40,078
<TOTAL-LIABILITY-AND-EQUITY> 395,583
<SALES> 0
<TOTAL-REVENUES> 17,896
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 28,541
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,688
<INCOME-PRETAX> (9,941)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,941)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,941)
<EPS-BASIC> (.38)<F1>
<EPS-DILUTED> (.38)
<FN>
<F1>For Purposes of this Exhibit, Primary means Basic.
</FN>
</TABLE>
